N.Y. Insurance Law § 3233: Stabilization of health insurance markets and premium rates

§ 3233. Stabilization of health insurance markets and premium rates.

(a) Notwithstanding any provision of this chapter or any other chapter,

on or before October first, nineteen hundred ninety-two the

superintendent shall promulgate regulations to assure an orderly

implementation and ongoing operation of the open enrollment and

community rating required by sections thirty-two hundred thirty-one and

forty-three hundred seventeen of this chapter, including provisions

designed to encourage insurers to remain in or enter the small group or

individual health insurance markets. The regulations shall apply to all

insurers and health maintenance organizations subject to community

rating. The regulations shall be designed to promote an insurance

marketplace where premiums do not unduly fluctuate, insurers and health

maintenance organizations are reasonably protected against unexpected

significant shifts in the number of persons insured, and other market

stability features deemed appropriate by the superintendent. Such

regulations shall not require any insurer or health maintenance

organization subject to this section, or any subsidiary or controlled

person of a holding company of such insurer or health maintenance

organization, to enter, continue to conduct, or withdraw from any line

of business as a condition of entering, continuing in, or withdrawing

from any other line of business.

(b) Prior to adopting such regulations the superintendent shall

convene a technical advisory committee to provide advice and

recommendations to the superintendent on issues including, but not

limited to, voluntary reinsurance, pooling, risk sharing, the moderation

of initial community rates as compared to prior rates, or premium

stabilization methods. The technical advisory committee shall be

comprised of nine members, one of whom shall be the superintendent or

his or her designee. The superintendent or his or her designee shall

chair the committee and shall appoint two other members to the

committee. The temporary president of the senate and the speaker of the

assembly shall each appoint three members to the committee. The

appointees shall be representatives of commercial health insurers,

not-for-profit health insurers, health maintenance organizations and

purchasers of insurance and shall be named no later than July fifteenth,

nineteen hundred ninety-two. In addition, the superintendent may obtain

the services of an actuary with experience relating to premium rates and

market stabilization for small group health insurance.

(c) (1) Such regulations shall include reinsurance or a pooling

process involving insurer contributions to, or receipts from, a fund

which shall be designed to share the risk of or equalize high cost

claims, claims of high cost persons, cost variations among insurers and

health maintenance organizations based upon demographic factors of the

persons insured which correlate with such cost variations designed to

protect insurers from disproportionate adverse risks of offering

coverage to all applicants; provided that such regulations shall relate

only to risk sharing among insurers and health maintenance organizations

and shall not create differences in community rates charged by a single

insurer because an individual's or small group's coverage has been

reinsured or pooled, and neither the small employer nor the employee

shall have reason to know that their coverage has been reinsured or

pooled pursuant to such regulations. Such regulations may also include

other mechanisms designed to share risks or prevent undue variations in

insurer claim costs which are not related to expected differences in

insurer costs based upon competition, innovation and efficiency of

operation. The regulations may segregate any reinsurance, pooling or

other process among various geographic regions of the state.

(2) Effective on and after January first, nineteen hundred ninety-six,

health maintenance organizations and insurers shall be required to

contribute only ninety percent of the amounts calculated pursuant to

regulations based upon demographic factors. The required contribution

will be further reduced by an additional twenty-two and one-half percent

on each succeeding January first. The aggregate total contributions by

health maintenance organizations and insurers required pursuant to

regulations based upon specified medical conditions shall be increased

by the aggregate total amount of savings resulting from decreased

contributions calculated pursuant to regulations based upon demographic

factors, provided, however, that the funds received by an insurer or

health maintenance organization pursuant to such regulations be applied

to reduce the premiums of the particular class of contracts issued

pursuant to sections four thousand three hundred twenty-one and four

thousand three hundred twenty-two of this chapter whose subscribers

caused the payments to be received.

(3) On and after January first, two thousand, such regulations shall

include only reinsurance or a pooling process involving insurer and

health maintenance organization contributions to, or receipts from, a

fund which shall be designed to share the risk of or equalize high cost

claims or the claims of high cost persons; provided that such

regulations shall relate only to risk sharing among insurers and health

maintenance organizations and shall not create differences in community

rates charged by a single insurer or health maintenance organization

because an individual's or small group's coverage has been reinsured or

pooled, and neither the small employer nor the employee shall have

reason to know that their coverage has been reinsured or pooled pursuant

to such regulations. Such regulations may also include other mechanisms

designed to share risks or prevent undue variations in insurer and

health maintenance organization claim costs which are not related to

expected differences in insurer and health maintenance organization

costs based upon competition, innovation and efficiency of operation.

The regulations may segregate any reinsurance, pooling or other process

among various geographic regions of the state. Prior to adopting such

regulations the superintendent shall convene a technical advisory

committee to provide advice and recommendations to the superintendent on

issues including, but not limited to, voluntary reinsurance, pooling,

risk sharing, the moderation of initial community rates as compared to

prior rates, or premium stabilization methods. The technical advisory

committee shall be comprised of nine members, one of whom shall be the

superintendent or his or her designee. The superintendent or his or her

designee shall chair the committee and shall appoint two other members

to the committee. The temporary president of the senate and the speaker

of the assembly shall each appoint three members to the committee. The

appointees shall be representatives of not-for-profit and commercial

health insurers, health maintenance organizations, consumers and other

purchasers of insurance and shall be named no later than September

first, nineteen hundred ninety-five.

The superintendent shall also convene the technical advisory committee

periodically to evaluate the impact of the standardized direct payment

enrollee contracts offered pursuant to sections four thousand three

hundred twenty-one and four thousand three hundred twenty-two of this

chapter on the individual health insurance market. In the course of such

evaluation, the superintendent and the technical advisory committee

shall consider: the adequacy of the benefits provided under the

contracts and their effect on the affordability of the contracts;

enrollment levels in the contracts in various regions of the state;

utilization and claims experience of the contract holders; the impact of

non-standardized direct payment enrollee contracts on the individual

market; whether there is a need for an additional standardized direct

payment enrollee contract and recommendations on whether other or

different standardized benefit packages should be offered in the

individual market; other options to enhance the affordability of the

contracts; and such other areas as the technical advisory committee

deems appropriate. After completing such evaluation, but in no event

later than October first, nineteen hundred ninety-six, the technical

advisory committee shall deliver a report to the governor, the speaker

of the assembly and the temporary president of the senate which contains

the results of its evaluation and any findings or recommendations on

enhancing access to and affordability of individual health insurance

products.

(d) Notwithstanding any provision of this chapter or any other

chapter, the superintendent may suspend or terminate, by regulation, the

operation, in whole or in part, of any mechanism established and

operating pursuant to the authority of this section provided that the

superintendent determines that the objectives stated in subsection (a)

of this section are met by the operation of a mechanism or mechanisms

established by the federal government pursuant to section 1343 of the

affordable care act, 42 U.S.C. § 18063. Notwithstanding subsection (b)

of this section, the superintendent may exercise this authority without

convening a technical advisory committee.