N.Y. Insurance Law § 4322-a: Fund for standardized individual enrollee direct payment contracts which provide out-of-plan benefits

§ 4322-a. Fund for standardized individual enrollee direct payment

contracts which provide out-of-plan benefits. (a) The superintendent

shall establish a fund from which health maintenance organizations may

receive reimbursement, to the extent of funds available therefor, for

claims paid by such health maintenance organizations for members covered

under standardized individual enrollee direct payment contracts which

provide out-of-plan benefits issued pursuant to section four thousand

three hundred twenty-two of this article. The fund established by the

superintendent pursuant to this section shall be known as "the direct

payment out-of-plan stop loss fund". Commencing in calendar year two

thousand, health maintenance organizations shall be eligible to receive

reimbursement from the direct payment out-of-plan stop loss fund for

ninety percent of claims paid between twenty thousand and one hundred

thousand dollars in a calendar year for any member covered under a

contract issued pursuant to section four thousand three hundred

twenty-two of this article. For the purposes of this section, claims

shall include health care claims paid by a health maintenance

organization on behalf of a covered member pursuant to contracts issued

pursuant to section four thousand three hundred twenty-two of this

article.

(b) The superintendent shall promulgate regulations that set forth

procedures for the operation of the direct payment out-of-plan stop loss

fund and the distribution of monies therefrom.

(c) Claims shall be reported and funds shall be distributed on a

calendar year basis. Claims shall be eligible for reimbursement only for

the calendar year in which the claims are paid. Once claims paid on

behalf of a member reach or exceed one hundred thousand dollars in a

given calendar year, no further claims paid on behalf of such member in

that calendar year shall be eligible for reimbursement.

(d) Each health maintenance organization shall submit a request for

reimbursement from the stop loss fund on a form prescribed by the

superintendent. Such request for reimbursement shall be submitted no

later than April first following the end of the calendar year for which

the reimbursement request is being made. The superintendent may require

health maintenance organizations to submit such claims data in

connection with the reimbursement request as he deems necessary to

enable him to distribute monies and oversee the operation of the direct

payment out-of-plan stop loss fund. The superintendent may require that

such data be submitted on a per member, aggregate and/or categorical

basis.

(e) The superintendent shall calculate the total claims reimbursement

amount for all health maintenance organizations for the calendar year

for which claims are being reported.

(1) In the event that the total amount requested for reimbursement by

all health maintenance organizations for a calendar year exceeds funds

available for distribution for claims paid by all health maintenance

organizations during that same calendar year, the superintendent shall

provide for the pro-rata distribution of the available funds. Each

health maintenance organization shall be eligible to receive only such

proportionate amount of the available funds as the individual health

maintenance organization's total eligible claims bears to the total

eligible claims paid by all health maintenance organizations.

(2) In the event that (A) funds available for distribution for claims

paid by all health maintenance organizations during a calendar year

exceeds the total amount requested for reimbursement by all health

maintenance organizations during that same calendar year, and (B) the

total amount requested for reimbursement by all health maintenance

organizations from the direct payment stop loss fund exceeds the amount

available for distribution from such fund, then any excess funds shall

be reallocated for distribution to the direct payment stop loss fund.

Otherwise, such excess funds shall be carried forward and shall not

affect the monies appropriated for the direct payment out-of-plan stop

loss fund in the next calendar year.

(f) Upon the request of the superintendent, each health maintenance

organization shall be required to furnish such data as the

superintendent deems necessary to oversee the operation of the direct

payment out-of-plan stop loss fund. Such data shall be furnished in a

form prescribed by the superintendent.

(g) The superintendent may obtain the services of an organization to

administer the direct payment out-of-plan stop loss fund. The

superintendent shall establish guidelines for the submission of

proposals by organizations for the purposes of administering the fund.

The superintendent shall make a determination whether to approve,

disapprove or recommend modification to the proposal of an applicant to

administer the fund. An organization approved to administer the fund

shall submit reports to the superintendent in such form and at times as

may be required by the superintendent in order to facilitate evaluation

and ensure orderly operation of the fund, including, but not limited to,

an annual report of the affairs and operations of the fund, such report

to be delivered to the superintendent and to the chairs of the senate

finance committee and assembly ways and means committee. An organization

approved to administer the fund shall maintain records in a form

prescribed by the superintendent and which shall be available for

inspection by or at the request of the superintendent. The

superintendent shall determine the amount of compensation to be

allocated to an approved organization as payment for fund

administration. Compensation shall be payable from the direct payment

out-of-plan stop loss fund. An organization approved to administer the

fund may be removed by the superintendent and must cooperate in the

orderly transition of services to another approved organization or to

the superintendent.

(h) If the superintendent deems it appropriate for the proper

administration of the direct payment out-of-plan stop loss fund, the

administrator of the fund, on behalf of and with the prior approval of

the superintendent, shall be authorized to purchase stop loss insurance

and/or reinsurance from an insurance company licensed to write such type

of insurance in this state. Such stop loss insurance and/or reinsurance

may be purchased to the extent of funds available therefor within such

funds which are available for purposes of the stop loss fund.