Current through Register Vol. 46, No. 39, September 25, 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.
