New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter XIV - Individual And Small Group Health Insurance › Part 360 - Rules To Assure An Orderly Implementation And Ongoing Operation Of Open Enrollment And Community Rating Of Individual And Small Group Health Insurance › Section 360.9 - Prohibition on insurers providing administrative services or stop-loss, catastrophic or reinsurance coverages to self-insured arrangements, including small groups and association groups

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Except as permitted by subdivision (c) of
				this section, no insurer, subsidiary of an insurer, or controlled person of a
				holding company (as defined in article 15 of the Insurance Law), may act as an
				administrator or claims paying agent, as opposed to an insurer, on behalf of
				any small group or association group in any case where, if the group had
				purchased hospital or medical/surgical insurance coverage, the policy issued
				would be subject to the provisions of section 3231 or
				4317  of the Insurance Law.
(b) Except as permitted by subdivision (c) of
				this section, no insurer, subsidiary of an insurer, or controlled person of a
				holding company (as defined in article 15 of the Insurance Law), may provide
				stop-loss, catastrophic or reinsurance coverage for any small group or
				association group in any case where if the group had purchased hospital or
				medical/surgical insurance coverage, the policy issued would be subject to the
				provisions of section 3231 or
				4317  of the Insurance Law. Stop-loss,
				catastrophic or reinsurance coverage is defined as arrangements where the
				employer or group pays claims or expenses from its own funds to or on behalf of
				a covered person, but the employer or group purchases insured coverage of any
				kind from an insurer in which the insurer pays claims (or reimburses the
				employer or group for claims) of over a specified amount, or when all claims
				combined exceed a specified amount, or any similar arrangement. Nothing in this
				section is intended to prohibit an insurer which has issued insured,
				community-rated coverage to a small group or individual in accordance with the
				provisions of chapter 501 of the Laws of 1992, from purchasing reinsurance from
				a reinsurer, so long as such reinsurance does not affect the premium rate of
				the individual or small group which incurred the claims which caused the
				reinsurer to make payments to the ceding insurer pursuant to the reinsurance
				policy.
(c) Notwithstanding
				subdivision (a) or (b) of this section, certain administrative service
				arrangements and stop-loss, catastrophic or reinsurance coverages insuring a
				plan which were in effect on or before December 31, 1991 may temporarily
				continue beyond April 1, 1993 but only if all of the following conditions are
				met:
(1) The arrangement or coverage involves
				an association group as defined in section
				360.2(a) 
				of this Part. Administrative services arrangements and stop-loss, catastrophic
				or reinsurance coverages involving individuals or small groups not part of an
				association group may not be continued beyond April 1, 1993.
(2) The effective date of the administrative
				service arrangement or the coverage insuring a plan offered under the
				arrangement must have been on or before December 31, 1991.
(3) The acceptance of additional employers or
				other member groups comprised of 50 or fewer employees or members (exclusive of
				spouses and dependents) into the association group between June 1, 1992 and
				April 1, 1994 must be limited to 10 percent per year as compared to the total
				number of persons covered under the association group as of June 1, 1992. This
				limitation shall not apply in the event that an association group is in
				compliance with paragraphs (4), (5) and (6) of this subdivision, and so
				notifies the superintendent.
If these growth limitations are exceeded, an insurer may no
				  longer continue to provide administrative services or stop-loss, catastrophic
				  or reinsurance coverage to that association group. Nothing herein shall be
				  deemed to limit the addition of employer groups or other member groups with
				  more than 50 employees or members (exclusive of spouses and dependents).
(4) After April 1, 1994, the
				association group must accept all member employers or member groups into its
				health plan without any underwriting other than a preexisting condition waiting
				period consistent with those permitted by this Part. An insurer may apply to
				the superintendent for an extension or extensions of time beyond April 1, 1994
				to meet this requirement. An extension will only be granted if the
				superintendent determines that a significant financial hardship to the group
				would result without the extension. Any such extension or extensions may not
				extend beyond April 1, 1996 and the 10 percent annual growth limitation
				described in paragraph (3) of this subdivision shall be reduced to five percent
				per year during any extension or extensions.
(5) After April 1, 1994, the cost for
				participation charged to member employers or member groups shall be the same
				for all persons covered through the association group, without regard to age,
				sex, health status or occupation. An insurer may apply to the superintendent
				for an extension or extensions of time beyond April 1, 1994 to meet this
				requirement. An extension will only be granted if the superintendent determines
				that a significant financial hardship to the group would result without the
				extension. Any such extension or extensions may not extend beyond April 1, 1996
				and the 10 percent annual growth limitation described in paragraph (3) of this
				subdivision shall be reduced to five percent per year during any extension or
				extensions.
(6) An individual's or
				member employer or other member group's coverage cannot be terminated due to
				claims experience.
(7) The types of
				categories of employers or groups eligible to join the association group are
				not altered or expanded after June 1, 1992.
(8) The insurer has registered with the
				superintendent the names of such association groups, including the total number
				of persons covered as of June 1, 1992, on or before April 1, 1993. The insurer
				must also report annually to the department to demonstrate continued compliance
				with all of the requirements of this section.
(9) To register with the superintendent the
				names of association groups pursuant to paragraph (8) of this subdivision, a
				letter must be sent to the Health and Life Policy Bureau of the Insurance
				Department on or before April 1, 1993. For each association group to be
				registered the letter shall list:
(i) the
				name and address of each group which meets the requirements of subdivision (c)
				of this section;
(ii) the name,
				title and business telephone number of the primary person at the group
				responsible for working with the insurer;
(iii) the total number of persons (excluding
				spouses and dependents) covered by the group as of June 1, 1992;
(iv) a description of the type of group as a
				multiple employer welfare arrangement (MEWA) as defined in the Federal Employee
				Retirement Income Security Act (ERISA), any other multiple employer
				arrangements which are not MEWAs (such as collectively bargained plans), or
				which are not subject to ERISA such as governmental plans or church
				plans;
(v) whether the insurer
				provides administrative services only, provides stop-loss, catastrophic or
				reinsurance coverage, or both; and
(vi) the effective date of the health
				benefits coverage for covered employees offered by the group pursuant to the
				administrative services only and/or stop-loss, catastrophic or reinsurance
				arrangement with the insurer.
An insurer may not provide or continue to provide
				  administrative services or stop-loss catastrophic or reinsurance coverage
				  unless all of these conditions are met and continue to be met.