N.Y. Insurance Law § 4327: Stop loss funds for standardized health insurance contracts issued to qualifying small employers and qualifying individuals

§ 4327. Stop loss funds for standardized health insurance contracts

issued to qualifying small employers and qualifying individuals. (a) The

superintendent shall establish a fund from which health maintenance

organizations, corporations or insurers may receive reimbursement, to

the extent of funds available therefor, for claims paid by such health

maintenance organizations, corporations or insurers for members covered

under qualifying group health insurance contracts issued pursuant to

section four thousand three hundred twenty-six of this article. This

fund shall be known as the "small employer stop loss fund".

(b) Health maintenance organizations, corporations or insurers shall

be eligible to receive reimbursement for ninety percent of claims paid

between five thousand and seventy-five thousand dollars in a calendar

year for any member covered under a standardized contract issued

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

article. Claims paid for members covered under qualifying group health

insurance contracts shall be reimbursable from the small employer stop

loss fund. 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 such standardized contracts.

(c) The superintendent shall promulgate regulations that set forth

procedures for the operation of the small employer stop loss fund and

distribution of monies therefrom.

(d) The superintendent may adjust the level of stop loss coverage

specified in subsection (b) of this section.

(e) Claims shall be reported and funds shall be distributed from the

small employer stop loss fund 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 covered 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.

(f) Each health maintenance organization, corporation or insurer shall

submit a request for reimbursement from the stop loss fund on forms

prescribed by the superintendent. The requests for reimbursement shall

be submitted no later than April first following the end of the calendar

year for which the reimbursement requests are being made. The

superintendent may require health maintenance organizations,

corporations or insurers to submit such claims data in connection with

the reimbursement requests as he deems necessary to enable him to

distribute monies and oversee the operation of the small employer stop

loss fund. The superintendent may require that such data be submitted on

a per member, aggregate and/or categorical basis.

(g) For the stop loss fund, the superintendent shall calculate the

total claims reimbursement amount for all health maintenance

organizations, corporations or insurers for the calendar year for which

claims are being reported.

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

a calendar year exceeds funds available for distribution for claims paid

during that same calendar year, the superintendent shall provide for the

pro-rata distribution of the available funds. Each health maintenance

organization, corporation or insurer shall be eligible to receive only

such proportionate amount of the available funds as the individual

health maintenance organization's, corporation's or insurer's total

eligible claims paid bears to the total eligible claims paid by all

health maintenance organizations, corporations or insurers.

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

by all health maintenance organizations, corporations or insurers during

a calendar year exceeds the total amount requested for reimbursement by

all health maintenance organizations, corporations or insurers during

that same calendar year, any excess funds shall be carried forward and

made available for distribution in the next calendar year. Such excess

funds shall be in addition to the monies appropriated for the stop loss

fund in the next calendar year.

(h) 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 small

employer stop loss fund. Such data shall be furnished in a form

prescribed by the superintendent. Each health maintenance organization,

corporation or insurer shall provide the superintendent with monthly

reports of the total enrollment under the qualifying group health

insurance contracts issued pursuant to section four thousand three

hundred twenty-six of this article. The reports shall be in a form

prescribed by the superintendent.

(i) The superintendent shall separately estimate the per member annual

cost of total claims reimbursement from each stop loss fund for

qualifying group health insurance contracts based upon available data

and appropriate actuarial assumptions. Upon request, each health

maintenance organization, corporation or insurer shall furnish to the

superintendent claims experience data for use in such estimations.

(j) The superintendent shall determine total eligible enrollment under

qualifying group health insurance contracts. The total eligible

enrollment shall be determined by dividing the total funds available for

distribution from the small employer stop loss fund by the estimated per

member annual cost of total claims reimbursement from the small employer

stop loss fund.

(k) The superintendent shall suspend the enrollment of new employers

under qualifying group health insurance contracts if the superintendent

determines that the total enrollment reported by all health maintenance

organizations, corporations or insurers under such contracts exceeds the

total eligible enrollment, thereby resulting in anticipated annual

expenditures from the small employer stop loss fund in excess of the

total funds available for distribution from such stop loss fund.

(l) The superintendent shall provide the health maintenance

organizations, corporations or insurers with notification of any

enrollment suspensions as soon as practicable after receipt of all

enrollment data.

(m) If at any point during a suspension of enrollment of new

qualifying small employers, the superintendent determines that funds are

sufficient to provide for the addition of new enrollments, the

superintendent shall be authorized to reactivate new enrollments and to

notify all health maintenance organizations, corporations or insurers

that enrollment of new employers may again commence.

(m-1) In the event that the superintendent suspends the enrollment of

new individuals for qualifying group health insurance contracts, the

superintendent shall ensure that small employers seeking to enroll in a

qualified group health insurance contract pursuant to section

forty-three hundred twenty-six of this article are provided information

on and directed to coverage options available through the health benefit

exchange established by this state.

(n) The suspension of issuance of qualifying group health insurance

contracts to new qualifying small employers shall not preclude the

addition of new employees of an employer already covered under such a

contract or new dependents of employees already covered under such

contracts.

(o) The premiums for qualifying group health insurance contracts must

factor in the availability of reimbursement from the small employer stop

loss fund.

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

administer the stop loss funds established by this section. The

superintendent shall establish guidelines for the submission of

proposals by organizations for the purposes of administering the funds.

The superintendent shall make a determination whether to approve,

disapprove or recommend modification to the proposal of an applicant to

administer the funds. An organization approved to administer the funds

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 funds, including 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

the assembly ways and means committee. An organization approved to

administer the funds 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

stop loss coverage funds. An organization approved to administer the

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

orderly transition of services to another approved organization or to

the superintendent.

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

administration of the small employer 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 funds

established by this section.

(r) The superintendent may access funding from the small employer stop

loss fund for the purposes of developing and implementing public

education, outreach and facilitated enrollment strategies targeted to

small employers without health insurance. The superintendent may

contract with marketing organizations to perform or provide assistance

with such education, outreach, and enrollment strategies. The

superintendent shall determine the amount of funding available for the

purposes of this subsection which in no event shall exceed eight percent

of the annual funding amounts for the small employer stop loss fund.

(s) Brooklyn healthworks pilot program and upstate healthworks pilot

program. Commencing on July first, two thousand six, the superintendent

shall access funding from the small employer stop loss fund for the

purpose of support and expansion of the existing pilot program Brooklyn

healthworks approved by the superintendent and for the establishment and

operation of a pilot program to be located in upstate New York. For the

purpose of this subsection, in no event shall the amount of funding

available exceed two percent of the annual funding amount for the small

employer stop loss fund.