2013 New York Consolidated Laws
ISC - Insurance
Article 43 - (4301 - 4328) NON-PROFIT MEDICAL AND DENTAL INDEMNITY, OR HEALTH AND HOSPITAL SERVICE CORPORATIONS
4317 - Rating of individual and small group health insurance contracts.


NY Ins L § 4317 (2012) What's This?
 
    §  4317.  Rating  of  individual  and  small  group  health  insurance
  contracts.  (a) (1) No individual health insurance contract and no group
  health insurance contract covering between one and  fifty  employees  or
  members  of  the  group,  or  between  one  and one hundred employees or
  members of the group for policies issued or renewed on or after  January
  first,  two  thousand  sixteen  exclusive  of  spouses  and  dependents,
  including contracts for which the premiums are paid by a remitting agent
  for a group,  hereinafter  referred  to  as  a  small  group,  providing
  hospital   and/or  medical  benefits,  including  Medicare  supplemental
  insurance, shall be  issued  in  this  state  unless  such  contract  is
  community  rated  and,  notwithstanding any other provisions of law, the
  underwriting of such contract involves no more than the imposition of  a
  pre-existing   condition  limitation  if  otherwise  permitted  by  this
  article. (2) Any individual, and dependents of such individual, and  any
  small  group, including all employees or group members and dependents of
  employees or members, applying for  individual  or  small  group  health
  insurance  coverage  including  Medicare supplemental insurance, but not
  including coverage issued  on  or  after  January  first,  two  thousand
  fourteen  specified  in  subsection  (l)  of section four thousand three
  hundred four, and section four thousand three  hundred  twenty-eight  of
  this  chapter, must be accepted at all times throughout the year for any
  hospital  and/or  medical  coverage  offered  by  the   corporation   to
  individuals  or  small  groups  in  this  state.  (3)  Once accepted for
  coverage, an individual or small  group  cannot  be  terminated  by  the
  insurer   due   to   claims  experience.  Termination  of  coverage  for
  individuals or small groups may be based only on  one  or  more  of  the
  reasons  set  forth  in  subsection  (c)  of section four thousand three
  hundred four or subsection (j) of section four  thousand  three  hundred
  five  of  this article. (4) For the purposes of this section, "community
  rated" means a rating methodology in which the premium for  all  persons
  covered  by  a  policy  or  contract  form  is  the  same,  based on the
  experience of the entire pool of  risks  of  all  individuals  or  small
  groups  covered  by  the  corporation without regard to age, sex, health
  status, tobacco usage or occupation excluding those individuals of small
  groups  covered  by  Medicare  supplemental  insurance.   For   medicare
  supplemental  insurance  coverage,  "community  rated"  means  a  rating
  methodology in which the premiums for all persons covered by a policy or
  contract form is the same based on the experience of the entire pool  of
  risks  covered  by  that  policy or contract form without regard to age,
  sex, health status, tobacco usage  or  occupation.  Catastrophic  health
  insurance contracts issued pursuant to section 1302(e) of the affordable
  care  act,  42  U.S.C.  §  18022(e),  shall  be classified in a distinct
  community rating pool.
    (b) (1) The superintendent may set standard premium tiers and standard
  rating relativities between tiers applicable to all contracts subject to
  this section. The superintendent may  also  set  a  standard  relativity
  applicable to child-only contracts issued pursuant to section 1302(f) of
  the  affordable  care  act,  42  U.S.C.  §  18022(f). The relativity for
  child-only contracts must be actuarially justifiable using the aggregate
  experience of  corporations  to  prevent  the  charging  of  unjustified
  premiums.   The   superintendent  may  adjust  such  premium  tiers  and
  relativities  periodically  based  upon  the  aggregate  experience   of
  corporations  issuing  contract  forms  subject  to  this section. (2) A
  corporation shall establish separate community rates for individuals  as
  opposed  to  small  groups.  (3) If a corporation is required to issue a
  contract to individual proprietors pursuant to subsection  (f)  of  this
  section,   such  contract  shall  be  subject  to  the  requirements  of
  subsection (a) of this section.

    (c) (1) The superintendent shall permit the use of separate  community
  rates  for  reasonable  geographic  regions, which may, in a given case,
  include  a  single  county.  The  regions  shall  be  approved  by   the
  superintendent  as part of the rate filing. The superintendent shall not
  require  the  inclusion  of  any  specific geographic regions within the
  proposed community rated regions selected by the corporation in its rate
  filing so long as the corporation's  proposed  regions  do  not  contain
  configurations  designed to avoid or segregate particular areas within a
  county covered by the corporation's community rates.  (2)  Beginning  on
  January first, two thousand fourteen, for every contract subject to this
  section  that  provides  physician  services,  medical, major medical or
  similar comprehensive-type coverage, except  for  Medicare  supplemental
  insurance,  corporations  shall  use standardized regions established by
  the superintendent.
    (d) (1) This section shall also apply to a contract issued to a  group
  defined   in  subsection  (c)  of  section  four  thousand  two  hundred
  thirty-five of this chapter, including but not limited to an association
  or trust of  employers,  if  the  group  includes  one  or  more  member
  employers  or other member groups which have fifty or fewer employees or
  members exclusive of spouses and dependents.  For  contracts  issued  or
  renewed  on  or after January first, two thousand fourteen, if the group
  includes one or more member small group employers eligible for  coverage
  subject  to this section, then such member employers shall be classified
  as small groups for rating purposes and the remaining members  shall  be
  rated  consistent  with  the  rating  rules applicable to such remaining
  members pursuant to paragraph two of this subsection.
    (2) If a contract is issued to a group defined in  subsection  (c)  of
  section  four thousand two hundred thirty-five of this chapter including
  association groups, that includes one or more individual  or  individual
  proprietor  members,  then  for  rating  purposes  the corporation shall
  include such members in its individual pool  of  risks  in  establishing
  premium rates for such members.
    (3)  A  corporation  shall  provide  specific  claims  experience to a
  municipal corporation, as defined in  subsection  (f)  of  section  four
  thousand  seven  hundred two of this chapter, covered by the corporation
  under a community rated contract when the municipal corporation requests
  its claims experience for purposes of forming  or  joining  a  municipal
  cooperative   health   benefit   plan   certified  pursuant  to  article
  forty-seven of this chapter. Notwithstanding the  foregoing  provisions,
  no  corporation  shall  be  required  to  provide more than three years'
  claims experience to a municipal corporation making this request.
    (e) (1) Notwithstanding  any  other  provision  of  this  chapter,  no
  insurer,  subsidiary  of  an  insurer, or controlled person of a holding
  company system may act as an administrator or claims  paying  agent,  as
  opposed  to  an  insurer,  on  behalf  of  small  groups  which, if they
  purchased insurance, would be  subject  to  this  section.  No  insurer,
  subsidiary  of an insurer, or controlled person of a holding company may
  provide stop loss, catastrophic or reinsurance coverage to small  groups
  which, if they purchased insurance, would be subject to this section.
    (2)  This  subsection shall not apply to coverage insuring a plan that
  was in effect on  or  before  December  thirty-first,  nineteen  hundred
  ninety-one  and  was  issued  to  a  group  that  includes  member small
  employers or other member small groups, including  but  not  limited  to
  association  groups,  provided  that  (A) acceptance of additional small
  member employers (or other member groups comprised  of  fifty  or  fewer
  employees  or  members,  exclusive  of  spouses and dependents) into the
  group on or after June first, nineteen  hundred  ninety-two  and  before
  April  first,  nineteen  hundred  ninety-four  does not exceed an amount

  equal to ten percent per year of the total  number  of  persons  covered
  under  the  group  as  of  June  first, nineteen hundred ninety-two, but
  nothing in this subparagraph shall limit the addition of  larger  member
  employers;  (B) (i) after April first, nineteen hundred ninety-four, the
  group thereafter accepts member small employers and member small  groups
  without  underwriting  by any more than the imposition of a pre-existing
  condition limitation as permitted by  this  article  and  the  cost  for
  participation  in  the  group  for all persons covered shall be the same
  based on the experience of the entire pool of risks  covered  under  the
  entire  group,  without regard to age, sex, health status or occupation;
  and; (ii) once accepted for  coverage,  an  individual  or  small  group
  cannot  be  terminated due to claims experience; (C) the corporation has
  registered the names of such  groups,  including  the  total  number  of
  persons  covered as of June first, nineteen hundred ninety-two, with the
  superintendent, in a form prescribed by the superintendent, on or before
  April first, nineteen hundred ninety-three  and  shall  report  annually
  thereafter  until such groups comply with the provisions of subparagraph
  (B) of this paragraph; and (D) the types or categories of  employers  or
  groups  eligible  to  join  the  association are not altered or expanded
  after June first, nineteen hundred ninety-two.
    (3) A corporation may apply to the superintendent for an extension  or
  extensions  of  time beyond April first, nineteen hundred ninety-four in
  which to implement the provisions of this subsection as they  relate  to
  groups  registered  with the superintendent pursuant to subparagraph (C)
  of paragraph two of this subsection; any such  extension  or  extensions
  may  not exceed two years in aggregate duration, and the ten percent per
  year limitation of subparagraph (A) of paragraph two of this  subsection
  shall  be reduced to five percent per year during the period of any such
  extension  or  extensions.  Any  application  for  an  extension   shall
  demonstrate  that  a  significant financial hardship to such group would
  result from such implementation.
    (f)(1) If the corporation issues  coverage  to  an  association  group
  (including  chambers  of  commerce),  as  defined in subparagraph (K) of
  paragraph one of subsection (c) of section  four  thousand  two  hundred
  thirty-five  of  this chapter, then the corporation shall issue the same
  coverage to individual proprietors who  purchase  coverage  through  the
  association  group  as  the  corporation  issues to groups that purchase
  coverage through  the  association  group;  provided,  however,  that  a
  corporation  that,  on the effective date of this subsection, is issuing
  coverage to individual proprietors not  connected  with  an  association
  group, may continue to issue such coverage provided that the coverage is
  otherwise  in  accordance  with this subsection and all other applicable
  provisions of law.
    (2)  For  coverage  purchased  pursuant  to  this  subsection  through
  December  thirty-first,  two  thousand  thirteen, individual proprietors
  shall be classified in their own  community  rating  category,  provided
  however,  up  to  and  including  December  thirty-first,  two  thousand
  thirteen,  the  premium  rate  established  for  individual  proprietors
  purchased  pursuant  to  paragraph  one  of this subsection shall not be
  greater than one hundred fifteen percent of the rate established for the
  same coverage issued to groups. Coverage purchased or  renewed  pursuant
  to  this  subsection  on  or  after January first, two thousand fourteen
  shall be classified in the individual rating category.
    (3) The corporation may require members of the association  purchasing
  health  insurance to verify that all employees electing health insurance
  are legitimate employees of the employers, as  documented  on  New  York
  state tax form NYS-45-ATT-MN or comparable documentation. In order to be
  eligible  to  purchase  health insurance pursuant to this subsection and

  obtain the same group insurance products as are  offered  to  groups,  a
  sole employee of a corporation or a sole proprietor of an unincorporated
  business  or entity must (A) work at least twenty hours per week, (B) if
  purchasing the coverage through an association group, be a member of the
  association  for  at least sixty days prior to the effective date of the
  insurance  contract,  and  (C)  present  a   copy   of   the   following
  documentation  to  the  corporation  or  health plan administrator on an
  annual basis:
    (i) NYS  tax  form  45-ATT,  or  comparable  documentation  of  active
  employee status;
    (ii)  for  an unincorporated business, the prior year's federal income
  tax Schedule C for an incorporated business subject to Subchapter S with
  a sole employee, federal income tax Schedule E  for  other  incorporated
  businesses with a sole employee, a W-2 annual wage statement, or federal
  tax form 1099 with federal income tax Schedule F; or
    (iii)  for  a business in business for less than one year, a cancelled
  business check, a certificate of  doing  business,  or  appropriate  tax
  documentation; and
    (iv)  such  other  documentation  as may be reasonably required by the
  insurer as approved by the superintendent to verify  eligibility  of  an
  individual to purchase health insurance pursuant to this subsection.
    (4)  Notwithstanding  the  provisions  of  item  (I)  of clause (i) of
  subparagraph (K) of paragraph one of  subsection  (c)  of  section  four
  thousand  two  hundred thirty-five of this chapter, for purposes of this
  section, an association group shall include chambers  of  commerce  with
  less   than   two   hundred   members  and  which  are  501C3  or  501C6
  organizations.

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