New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter XIV - Individual And Small Group Health Insurance › Part 365 - Paid Family Leave Covid- 19 Risk Adjustment Mechanism › Section 365.0 - Introduction

Current through Register Vol. 46, No. 28, July 10, 2024
Pursuant to chapter 25 of the Laws of 2020, the
				  superintendent is required to create, in consultation with the director of the
				  State Insurance Fund and the chair of the Workers' Compensation Board of the
				  State, a risk adjustment pool to stabilize the market and protect insurers from
				  disproportionate adverse risks associated with claims for disability benefits
				  and family leave benefits paid pursuant to that chapter. The superintendent, in
				  consultation with the director of the State Insurance Fund and the chair of the
				  Workers' Compensation Board, has determined that claims for disability benefits
				  and family leave benefits paid pursuant to chapter 25 of the Laws of 2020
				  (COVID-19 claims), represent risk that was not factored into pricing policies
				  covering disability or family leave benefits and thus present adverse risk
				  disproportionate to the premium charged. The superintendent also has determined
				  that in calendar year 2020, certain insurers are anticipated to have COVID-19
				  claims experience relative to surplus such that immediate relief will be
				  necessary to stabilize the impact of those claims. Therefore, this Part
				  establishes a mechanism by which 100 percent of COVID-19 claims paid will be
				  recouped over a period of time to be determined by the superintendent pursuant
				  to the provisions of this Part. This shall be accomplished by the pooling of a
				  portion of the premium associated with providing family leave benefits, which
				  will then be redistributed to insurers, including the State Insurance Fund,
				  proportionately, based on the actual COVID-19 claims experience. Each insurer,
				  including the State Insurance Fund, participating in the mechanism will be
				  entitled to payment from the pool until it has received an amount equal to 100
				  percent of the actual COVID-19 claims paid. Further, the mechanism will provide
				  insurers that experience COVID-19 claims reaching a threshold level of greater
				  than 20 percent of the company's surplus with the option to obtain immediate
				  relief payments that shall be used solely for the purpose of paying COVID-19
				  claims. Such relief payments shall be subject to an interest charge that shall
				  be paid in full by the insurer receiving the relief. Such interest charge shall
				  not be reimbursed via the redistribution contemplated above. Finally, the
				  superintendent, in consultation with the director of the State Insurance Fund
				  and the chair of the Workers' Compensation Board, has determined that
				  contributions into the pool to fund the relief payments during plan year 2020
				  shall, to the extent possible, be provided by the State Insurance Fund. To the
				  extent that the State Insurance Fund is unable to make contributions necessary
				  to cover the entire amount needed in relief, other insurers participating in
				  the disability benefits and family leave benefits insurance market may be
				  called upon to contribute to the pool with the guarantee that such
				  contributions shall be repaid in full with interest. The following sections set
				  forth the operation of this mechanism. To the extent consistent with this Part
				  the terms defined in Part 363 of this Title shall have the same meaning when
				  used in this Part.