N.Y. Insurance Law § 4317: Rating of individual and small group health insurance contracts

§ 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.

(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) (A) 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 having one hundred or fewer employees

or members exclusive of spouses and dependents. For a contract 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. (B) Subparagraph A

of this paragraph shall not apply to either the renewal of a contract

issued to a group or the issuance, between January first, two thousand

sixteen and December thirty-first, two thousand sixteen, of a contract,

and any renewal thereof, to a group, provided that the following three

requirements are met: (I) the group had been issued a contract that was

in effect on July first, two thousand fifteen; (II) the group had member

employers, who, on or after July first, two thousand fifteen, have

between fifty-one and one hundred employees, exclusive of spouses and

dependents; and (III) the group is either: (i) comprised entirely of one

or more municipal corporations or districts (as such terms are defined

in section one hundred nineteen-n of the general municipal law); or (ii)

comprised entirely of nonpublic schools providing education in any grade

from pre-kindergarten through twelfth grade.

* NB Effective until December 28, 2028

* (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 one hundred 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.

* NB Effective December 28, 2028

(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 may

provide stop loss, catastrophic or reinsurance coverage to small groups

which, if they purchased insurance, would be subject to this section.

Provided, however, the provisions of this paragraph shall not apply to:

(A) the renewal of stop loss, catastrophic or reinsurance coverage

issued and in effect on January first, two thousand fifteen to small

groups covering between fifty-one and one hundred employees or members

of the group; and (B) the issuance between January first, two thousand

sixteen, and December thirty-first, two thousand sixteen, of stop loss,

catastrophic or reinsurance coverage, and any renewal thereof, to a

small group covering between fifty-one and one hundred employees or

members of the group, provided that such group had stop loss,

catastrophic or reinsurance coverage issued and in effect on January

first, two thousand fifteen.

* NB Effective until December 28, 2028

* (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.

* NB Effective December 28, 2028

(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.