Bill Text: NY S00648 | 2009-2010 | General Assembly | Introduced
Bill Title: Provides for the creation of a new program for health insurance for individuals and groups of fifty or fewer employers or members; provides for open enrollment and community rating; provides for a technical advisory committee; permits a pooling process for high cost claims/persons; permits reinsurance; provides for shifting individuals on direct pay to the small group market; permits the use of other stop loss funds.
Spectrum: Partisan Bill (Republican 6-0)
Status: (Introduced - Dead) 2010-01-06 - REFERRED TO INSURANCE [S00648 Detail]
Download: New_York-2009-S00648-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 648 2009-2010 Regular Sessions I N S E N A T E January 12, 2009 ___________ Introduced by Sens. LARKIN, SEWARD, LEIBELL, MAZIARZ, VOLKER -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to the rating of individ- ual and small group health insurance policies and contracts and several stop loss funds; and to repeal the closing paragraph of subsection (c) of section 3233 of the insurance law relating to convening the technical advisory committee periodically to evaluate the impact of the standardized direct payment enrollee contracts offered pursuant to sections 4321 and 4322 of such law on the individ- ual health insurance market THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Subsections (a) and (b) of section 3231 of the insurance 2 law, subsection (a) as amended by chapter 661 of the laws of 1997 and 3 subsection (b) as amended by chapter 557 of the laws of 2002, are 4 amended to read as follows: 5 (a) No individual health insurance policy and no group health insur- 6 ance policy covering [between two and] A GROUP OF fifty OR FEWER employ- 7 ees or members of the group exclusive of spouses and dependents, herein- 8 after referred to as a small group, providing hospital and/or medical 9 benefits, including medicare supplemental insurance, shall be issued in 10 this state unless such policy is community rated and, notwithstanding 11 any other provisions of law, the underwriting of such policy involves no 12 more than the imposition of a pre-existing condition limitation as 13 permitted by this article. Any individual, and dependents of such indi- 14 vidual, and any small group, including all employees or group members 15 and dependents of employees or members, applying for individual health 16 insurance coverage, including medicare supplemental coverage, or small 17 group health insurance coverage, including medicare supplemental insur- 18 ance, must be accepted at all times throughout the year for any hospital EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03019-02-9 S. 648 2 1 and/or medical coverage offered by the insurer to individuals or small 2 groups in this state. Once accepted for coverage, an individual or small 3 group cannot be terminated by the insurer due to claims experience. 4 Termination of an individual or small group shall be based only on one 5 or more of the reasons set forth in subsection (g) of section three 6 thousand two hundred sixteen or subsection (p) of section three thousand 7 two hundred twenty-one of this article. Group hospital and/or medical 8 coverage, including medicare supplemental insurance, obtained through an 9 out-of-state trust covering a group of fifty or fewer employees or 10 participating persons who are residents of this state must be community 11 rated regardless of the situs of delivery of the policy. Notwithstanding 12 any other provisions of law, the underwriting of such policy may involve 13 no more than the imposition of a pre-existing condition limitation as 14 permitted by this article, and once accepted for coverage, an individual 15 or small group cannot be terminated due to claims experience. Termi- 16 nation of an individual or small group shall be based only on one or 17 more of the reasons set forth in subsection (p) of section three thou- 18 sand two hundred twenty-one of this article. For the purposes of this 19 section, "community rated" means a rating methodology in which the 20 premium for all persons covered by a policy or contract form is the same 21 based on the experience of the entire pool of risks covered by that 22 policy or contract form without regard to age, sex, health status or 23 occupation. 24 (b) Nothing herein shall prohibit the use of premium rate structures 25 to establish different premium rates for individuals as opposed to fami- 26 ly units [or separate community rates for individuals as opposed to 27 small groups. If an insurer is required to issue a contract to individ- 28 ual proprietors pursuant to subsection (i) of this section, such policy 29 shall be subject to subsection (a) of this section]. 30 S 2. Subsections (a) and (b) of section 4317 of the insurance law, 31 subsection (a) as amended by chapter 661 of the laws of 1997 and 32 subsection (b) as amended by chapter 557 of the laws of 2002, are 33 amended to read as follows: 34 (a) No individual health insurance contract and no group health insur- 35 ance contract covering [between two and] A GROUP OF fifty OR FEWER 36 employees or members of the group exclusive of spouses and dependents, 37 including contracts for which the premiums are paid by a remitting agent 38 for a group, hereinafter referred to as a small group, providing hospi- 39 tal and/or medical benefits, including Medicare supplemental insurance, 40 shall be issued in this state unless such contract is community rated 41 and, notwithstanding any other provisions of law, the underwriting of 42 such contract involves no more than the imposition of a pre-existing 43 condition limitation as permitted by this article. Any individual, and 44 dependents of such individual, and any small group, including all 45 employees or group members and dependents of employees or members, 46 applying for individual or small group health insurance coverage must be 47 accepted at all times throughout the year for any hospital and/or 48 medical coverage, including Medicare supplemental insurance, offered by 49 the corporation to individuals or small groups in this state. Once 50 accepted for coverage, an individual or small group cannot be terminated 51 by the insurer due to claims experience. Termination of coverage for 52 individuals or small groups may be based only on one or more of the 53 reasons set forth in subsection (c) of section four thousand three 54 hundred four or subsection (j) of section four thousand three hundred 55 five of this article. For the purposes of this section, "community 56 rated" means a rating methodology in which the premium for all persons S. 648 3 1 covered by a policy or contract form is the same, based on the experi- 2 ence of the entire pool of risks covered by that policy or contract form 3 without regard to age, sex, health status or occupation. 4 (b) Nothing herein shall prohibit the use of premium rate structures 5 to establish different premium rates for individuals as opposed to fami- 6 ly units [or separate community rates for individuals as opposed to 7 small groups. If a corporation is required to issue a contract to indi- 8 vidual proprietors pursuant to subsection (f) of this section, such 9 contract shall be subject to the requirements of subsection (a) of this 10 section]. 11 S 3. The closing paragraph of subsection (c) of section 3233 of the 12 insurance law is REPEALED and two new subsections (d) and (e) are added 13 to read as follows: 14 (D) (1) NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER OR ANY OTHER 15 PROVISION OF LAW, ON OR BEFORE OCTOBER FIRST, TWO THOUSAND ELEVEN, THE 16 SUPERINTENDENT SHALL PROMULGATE REGULATIONS TO ENSURE AN ORDERLY IMPLE- 17 MENTATION AND ONGOING OPERATION OF THE OPEN ENROLLMENT AND COMMUNITY 18 RATING REQUIRED BY SECTIONS THREE THOUSAND TWO HUNDRED THIRTY-ONE AND 19 FOUR THOUSAND THREE HUNDRED SEVENTEEN OF THIS CHAPTER, AS AMENDED BY THE 20 CHAPTER OF THE LAWS OF TWO THOUSAND NINE THAT ADDED THIS SUBSECTION, 21 INCLUDING PROVISIONS DESIGNED TO ENCOURAGE INSURERS TO REMAIN IN OR 22 ENTER THE SMALL GROUP HEALTH INSURANCE MARKET. SUCH REGULATIONS SHALL 23 APPLY TO ALL INSURERS AND HEALTH MAINTENANCE ORGANIZATIONS SUBJECT TO 24 COMMUNITY RATING. SUCH REGULATIONS SHALL BE DESIGNED TO PROMOTE AN 25 INSURANCE MARKETPLACE WHERE PREMIUMS DO NOT UNDULY FLUCTUATE, INSURERS 26 AND HEALTH MAINTENANCE ORGANIZATIONS ARE REASONABLY PROTECTED AGAINST 27 UNEXPECTED, SIGNIFICANT SHIFTS IN THE NUMBER OF PERSONS INSURED, AND 28 OTHER MARKET STABILITY FEATURES DEEMED APPROPRIATE BY THE SUPERINTEN- 29 DENT. SUCH REGULATIONS SHALL NOT REQUIRE ANY INSURER OR HEALTH MAINTE- 30 NANCE ORGANIZATION SUBJECT TO THIS SECTION, OR ANY SUBSIDIARY OR 31 CONTROLLED PERSON OF A HOLDING COMPANY OF SUCH INSURER OR HEALTH MAINTE- 32 NANCE ORGANIZATION, TO ENTER, CONTINUE TO CONDUCT OR WITHDRAW FROM ANY 33 LINE OF BUSINESS AS A CONDITION OF ENTERING, CONTINUING IN OR WITHDRAW- 34 ING FROM ANY OTHER LINE OF BUSINESS. 35 (2) PRIOR TO ADOPTING SUCH REGULATIONS, THE SUPERINTENDENT SHALL 36 CONVENE A TECHNICAL ADVISORY COMMITTEE, ON OR BEFORE FEBRUARY FIRST, TWO 37 THOUSAND TEN, TO PROVIDE ADVICE AND RECOMMENDATIONS TO THE SUPERINTEN- 38 DENT ON ISSUES INCLUDING, BUT NOT LIMITED TO, VOLUNTARY REINSURANCE, 39 POOLING, RISK SHARING, THE ESTABLISHMENT OF A HIGH RISK OR HIGH COST 40 MEDICAL CONDITIONS POOL, THE MODERATION OF INITIAL COMMUNITY RATES AS 41 COMPARED TO PRIOR RATES, OR PREMIUM STABILIZATION METHODS. THE TECHNICAL 42 ADVISORY COMMITTEE SHALL BE COMPRISED OF NINE MEMBERS, ONE OF WHOM SHALL 43 BE THE SUPERINTENDENT OR HIS OR HER DESIGNEE. THE SUPERINTENDENT OR HIS 44 OR HER DESIGNEE SHALL CHAIR THE COMMITTEE AND SHALL APPOINT TWO OTHER 45 MEMBERS TO THE COMMITTEE. THE TEMPORARY PRESIDENT OF THE SENATE AND THE 46 SPEAKER OF THE ASSEMBLY SHALL EACH APPOINT THREE MEMBERS TO THE COMMIT- 47 TEE. THE APPOINTEES SHALL BE REPRESENTATIVES OF COMMERCIAL HEALTH 48 INSURERS, NOT-FOR-PROFIT HEALTH INSURERS, HEALTH MAINTENANCE ORGANIZA- 49 TIONS AND PURCHASERS OF INSURANCE AND SHALL BE NAMED NO LATER THAN JANU- 50 ARY FIRST, TWO THOUSAND TEN. IN ADDITION, THE SUPERINTENDENT MAY OBTAIN 51 THE SERVICES OF AN ACTUARY WITH EXPERIENCE RELATING TO PREMIUM RATES AND 52 MARKET STABILIZATION FOR SMALL GROUP HEALTH INSURANCE. 53 (3) (A) SUCH REGULATIONS MAY INCLUDE REINSURANCE OR A POOLING PROCESS 54 INVOLVING INSURER CONTRIBUTIONS TO, OR RECEIPTS FROM, A FUND WHICH SHALL 55 BE DESIGNED TO SHARE THE RISK OF OR EQUALIZE HIGH COST CLAIMS, CLAIMS OF 56 HIGH COST PERSONS, COST VARIATIONS AMONG INSURERS AND HEALTH MAINTENANCE S. 648 4 1 ORGANIZATIONS BASED UPON DEMOGRAPHIC FACTORS OF THE PERSONS INSURED 2 WHICH CORRELATE WITH SUCH COST VARIATIONS DESIGNED TO PROTECT INSURERS 3 FROM DISPROPORTIONATE ADVERSE RISKS OF OFFERING COVERAGE TO ALL APPLI- 4 CANTS; PROVIDED THAT SUCH REGULATIONS SHALL RELATE ONLY TO RISK SHARING 5 AMONG INSURERS AND HEALTH MAINTENANCE ORGANIZATIONS AND SHALL NOT CREATE 6 DIFFERENCES IN COMMUNITY RATES CHARGED BY A SINGLE INSURER BECAUSE A 7 SMALL GROUP'S COVERAGE HAS BEEN REINSURED OR POOLED, AND NEITHER THE 8 SMALL EMPLOYER NOR THE EMPLOYEE SHALL HAVE REASON TO KNOW THAT THEIR 9 COVERAGE HAS BEEN REINSURED OR POOLED PURSUANT TO SUCH REGULATIONS. 10 (B) SUCH REGULATIONS MAY SPECIFY THE AGGREGATE TOTAL CONTRIBUTIONS BY 11 HEALTH MAINTENANCE ORGANIZATIONS AND INSURERS BASED UPON SPECIFIED 12 MEDICAL CONDITIONS, WHICH MAY BE INCREASED BY THE AGGREGATE TOTAL AMOUNT 13 OF SAVINGS RESULTING FROM DECREASED CONTRIBUTIONS CALCULATED PURSUANT TO 14 REGULATIONS BASED UPON DEMOGRAPHIC FACTORS. 15 (C) SUCH REGULATIONS MAY INCLUDE A REINSURANCE OR A POOLING PROCESS 16 INVOLVING INSURER AND HEALTH MAINTENANCE ORGANIZATION CONTRIBUTIONS TO, 17 OR RECEIPTS FROM, A FUND WHICH SHALL BE DESIGNED TO SHARE THE RISK OF OR 18 EQUALIZE HIGH COST CLAIMS OR THE CLAIMS OF HIGH COST PERSONS; PROVIDED 19 THAT SUCH REGULATIONS SHALL RELATE ONLY TO RISK SHARING AMONG INSURERS 20 AND HEALTH MAINTENANCE ORGANIZATIONS AND SHALL NOT CREATE DIFFERENCES IN 21 COMMUNITY RATES CHARGED BY A SINGLE INSURER OR HEALTH MAINTENANCE ORGAN- 22 IZATION BECAUSE A SMALL GROUP'S COVERAGE HAS BEEN REINSURED OR POOLED, 23 AND NEITHER THE INDIVIDUAL NOR THE SMALL EMPLOYER NOR THE EMPLOYEE SHALL 24 HAVE REASON TO KNOW THAT THEIR COVERAGE HAS BEEN REINSURED OR POOLED 25 PURSUANT TO SUCH REGULATIONS. SUCH REGULATIONS MAY ALSO INCLUDE OTHER 26 MECHANISMS DESIGNED TO SHARE RISKS OR PREVENT UNDUE VARIATIONS IN INSUR- 27 ER AND HEALTH MAINTENANCE ORGANIZATION CLAIM COSTS WHICH ARE NOT RELATED 28 TO EXPECTED DIFFERENCES IN INSURER AND HEALTH MAINTENANCE ORGANIZATION 29 COSTS BASED UPON COMPETITION, INNOVATION AND EFFICIENCY OF OPERATION. 30 THE REGULATIONS MAY SEGREGATE ANY REINSURANCE, POOLING OR OTHER PROCESS 31 AMONG VARIOUS GEOGRAPHIC REGIONS OF THE STATE. 32 (D) IN ORDER TO PROMULGATE RULES AND REGULATIONS TO IMPLEMENT THE 33 PROVISIONS OF THIS SUBSECTION IN AN ORDERLY MANNER THAT HELPS TO 34 INCREASE THE AVAILABILITY OF HEALTH INSURANCE TO ALL MEMBERS OF THE 35 SMALL GROUP MARKET, INCLUDING THOSE PERSONS THAT ARE CURRENTLY PLACED IN 36 THE INDIVIDUAL OR DIRECT PAY MARKET, THE TECHNICAL ADVISORY COMMITTEE 37 SHALL MAKE RECOMMENDATIONS TO: 38 (I) FORMULATE, DEVELOP, AND IMPLEMENT A PROGRAM OR METHODOLOGY TO 39 ESTABLISH A HIGH RISK OR HIGH COST MEDICAL CONDITIONS POOL AND SMALL 40 GROUP STOP LOSS FUND TO REIMBURSE NINETY PERCENT OF ALL BONA FIDE CLAIMS 41 ABOVE SEVENTY-FIVE THOUSAND DOLLARS PAID BY HEALTH MAINTENANCE ORGANIZA- 42 TIONS AND INSURERS IN A CALENDAR YEAR FOR ANY MEMBER OR INSURED COVERED 43 IN THE NEW SMALL GROUP MARKET ESTABLISHED PURSUANT TO THE PROVISIONS OF 44 THE CHAPTER OF THE LAWS OF TWO THOUSAND NINE THAT ADDED THIS SUBSECTION. 45 ALL APPROVED CLAIMS PAID ON BEHALF OF MEMBERS OR INSUREDS COVERED IN THE 46 NEW SMALL GROUP MARKET BY HEALTH MAINTENANCE ORGANIZATIONS AND INSURERS 47 THAT ARE ABOVE THE SEVENTY-FIVE THOUSAND DOLLAR THRESHOLD SHALL BE REIM- 48 BURSABLE, AS FUNDS ARE MADE AVAILABLE, FROM THE STOP LOSS FUNDS ESTAB- 49 LISHED PURSUANT TO SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SEVEN OF 50 THIS CHAPTER, THE STOP LOSS FUNDS ESTABLISHED PURSUANT TO SECTIONS FOUR 51 THOUSAND THREE HUNDRED TWENTY-ONE-A AND FOUR THOUSAND THREE HUNDRED 52 TWENTY-TWO-A OF THIS CHAPTER. 53 (II) COORDINATE THE ISSUANCE OF NEW SMALL GROUP POLICIES OR CONTRACTS 54 ISSUED AND RATED PURSUANT TO THIS CHAPTER WITH CONTRACTS ISSUED PURSUANT 55 TO SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SIX OF THIS CHAPTER. S. 648 5 1 (III) DEVELOP A MECHANISM TO SHIFT ALL PERSONS COVERED BY INDIVIDUAL 2 CONTRACTS OR POLICIES PAID ON A DIRECT PAYMENT BASIS ISSUED PURSUANT TO 3 THIS ARTICLE AND SECTIONS FOUR THOUSAND THREE HUNDRED FOUR, FOUR THOU- 4 SAND THREE HUNDRED TWENTY-ONE AND FOUR THOUSAND THREE HUNDRED TWENTY-TWO 5 OF THIS CHAPTER TO THE NEW SMALL GROUP MARKET BY JANUARY FIRST, TWO 6 THOUSAND SEVENTEEN. 7 (IV) DETERMINE WHETHER OR NOT CONTRACTS ISSUED PURSUANT TO SECTIONS 8 FOUR THOUSAND THREE HUNDRED TWENTY-ONE AND FOUR THOUSAND THREE HUNDRED 9 TWENTY-TWO OF THIS CHAPTER WILL CONTINUE TO BE NEEDED AND ISSUED TO 10 ADEQUATELY SATISFY THE INSURANCE COVERAGE REQUIREMENTS OF ALL SEGMENTS 11 OF THIS STATE'S POPULATION. FURTHER, THE COMMITTEE SHALL MAKE RECOMMEN- 12 DATIONS TO THE GOVERNOR, TEMPORARY PRESIDENT OF THE SENATE AND SPEAKER 13 OF THE ASSEMBLY BY JULY FIRST, TWO THOUSAND TWELVE ON THE ADVISABILITY 14 OF REPEALING SECTIONS FOUR THOUSAND THREE HUNDRED FOUR, FOUR THOUSAND 15 THREE HUNDRED TWENTY-ONE AND FOUR THOUSAND THREE HUNDRED TWENTY-TWO OF 16 THIS CHAPTER AND PROHIBITING THE ISSUANCE OF NEW DIRECT PAY CONTRACTS OR 17 POLICIES TO ANY MEMBERS OR INSUREDS AFTER JANUARY FIRST, TWO THOUSAND 18 THIRTEEN OR PERMITTING ALL INDIVIDUALS THAT HAVE INDIVIDUAL DIRECT PAY 19 CONTRACTS OR POLICIES ISSUED PURSUANT TO THIS ARTICLE AND SECTIONS FOUR 20 THOUSAND THREE HUNDRED FOUR, FOUR THOUSAND THREE HUNDRED TWENTY-ONE AND 21 FOUR THOUSAND THREE HUNDRED TWENTY-TWO OF THIS CHAPTER BEFORE JANUARY 22 FIRST, TWO THOUSAND THIRTEEN TO CONTINUE TO RENEW OR RETAIN SUCH 23 CONTRACTS OR POLICIES AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN. 24 (V) DEVELOP PROGRAMS OR METHODOLOGIES TO ENSURE THAT APPROPRIATE 25 MEDICAL CARE SHALL BE PROVIDED FOR ALL PERSONS PLACED IN A HIGH RISK OR 26 HIGH COST MEDICAL CONDITIONS POOL. SUCH PROGRAM OR METHODOLOGY SHALL 27 ENSURE THAT SUCH PERSONS RECEIVE APPROPRIATE AND COST EFFECTIVE MEDICAL 28 CARE AND THAT THE LEVEL AND UTILIZATION OF BENEFITS PROVIDED FOR UNDER 29 SUCH CONTRACTS OR POLICIES ARE ADEQUATE TO ADDRESS THE SERIOUS OR CHRON- 30 IC MEDICAL CONDITIONS FACED BY SUCH PERSONS. 31 (E)(I) THE ADVISORY COMMITTEE SHALL BE DEEMED TO BE A PUBLIC BODY FOR 32 THE PURPOSES SET FORTH IN THE OPEN MEETINGS LAW, AS SET FORTH IN ARTICLE 33 SEVEN OF THE PUBLIC OFFICERS LAW. ALL COMMITTEE MEETINGS SHALL BE 34 CONDUCTED ONLY AFTER FOURTEEN DAYS PRIOR PUBLIC NOTICE HAS BEEN GIVEN TO 35 THE NEWS MEDIA GENERALLY AND PUBLISHED IN THREE STATEWIDE NEWSPAPERS OF 36 GENERAL CIRCULATION, IN SUCH TRADE, INDUSTRY OR PROFESSIONAL PUBLICA- 37 TIONS AS THE ADVISORY COMMITTEE SHALL DESIGNATE, AND IN THE STATE REGIS- 38 TER. 39 (II) THE ADVISORY COMMITTEE SHALL ISSUE A REPORT THAT CONTAINS ITS 40 FINDINGS AND RECOMMENDATIONS AS PROVIDED FOR PURSUANT TO THIS SUBSECTION 41 TO THE GOVERNOR, TEMPORARY PRESIDENT OF THE SENATE AND SPEAKER OF THE 42 ASSEMBLY BY JANUARY FIRST, TWO THOUSAND ELEVEN. 43 (III) THE SUPERINTENDENT IN PROMULGATING RULES AND REGULATIONS TO 44 IMPLEMENT THE PROVISIONS OF THIS SUBSECTION AND THE SMALL GROUP STOP 45 LOSS FUND, MUST RELY ON THE FINDINGS AND RECOMMENDATIONS CONTAINED IN 46 THE ADVISORY COMMITTEE'S REPORT, UNLESS HE OR SHE FINDS ON THE RECORD 47 THAT SUCH RECOMMENDATIONS WOULD DESTABILIZE THE HEALTH INSURANCE MARKET, 48 INSTIGATE SUBSTANTIAL INCREASES IN PREMIUM RATES OR SUBJECT INSURERS AND 49 HEALTH MAINTENANCE INSURERS TO UNACCEPTABLE LOSS RATIOS OVER THE 50 INITIAL TWO YEAR PERIOD OF TIME. 51 (IV) THE SUPERINTENDENT, IN PROMULGATING RULES AND REGULATIONS TO 52 IMPLEMENT THE PROVISIONS OF THIS SUBSECTION, SHALL CONDUCT AT LEAST 53 THREE SEPARATE PUBLIC HEARINGS (NOTICE WHEREOF SHALL BE GIVEN AS 54 PROVIDED IN ITEM (I) OF THIS SUBPARAGRAPH) IN DIFFERENT PARTS OF THE 55 STATE ACCEPT PUBLIC COMMENT ON THE COMMITTEE'S REPORT AND THE PROPOSED 56 RULEMAKING SUBMITTED BY THE SUPERINTENDENT TO THE STATE REGISTER TO S. 648 6 1 IMPLEMENT THE PROVISIONS OF THIS SUBSECTION, IN ADDITION TO MEETING THE 2 REQUIREMENTS OF THE STATE ADMINISTRATIVE PROCEDURE ACT; PROVIDED THAT 3 THERE NEED BE NO DUPLICATION OF PERFORMANCE IN COMPLYING WITH THE 4 PROVISIONS OF THIS ITEM AND THOSE OF THE STATE ADMINISTRATIVE PROCEDURE 5 ACT. 6 (E) THE PROVISIONS OF THIS ARTICLE AND SECTIONS FOUR THOUSAND THREE 7 HUNDRED FOUR, FOUR THOUSAND THREE HUNDRED TWENTY-ONE AND FOUR THOUSAND 8 THREE HUNDRED TWENTY-TWO OF THIS CHAPTER AND ALL INDIVIDUAL CONTRACTS OR 9 POLICIES PAID ON A DIRECT PAYMENT BASIS ISSUED PURSUANT TO THIS CHAPTER 10 SHALL REMAIN IN EFFECT ON AND AFTER JANUARY FIRST, TWO THOUSAND THIR- 11 TEEN; PROVIDED, HOWEVER, THAT, AFTER JANUARY FIRST, TWO THOUSAND THIR- 12 TEEN, NO ADDITIONAL NEW CONTRACTS OR POLICIES MAY BE ISSUED TO INDIVID- 13 UALS THAT DID NOT SUBSCRIBE TO SUCH CONTRACTS OR POLICIES PRIOR TO 14 DECEMBER THIRTY-FIRST, TWO THOUSAND TWELVE. ALL INDIVIDUAL CONTRACTS OR 15 POLICIES IN FORCE PURSUANT TO THIS ARTICLE, OR SECTIONS FOUR THOUSAND 16 THREE HUNDRED FOUR, FOUR THOUSAND THREE HUNDRED TWENTY-ONE AND FOUR 17 THOUSAND THREE HUNDRED TWENTY-TWO OF THIS CHAPTER AFTER DECEMBER THIR- 18 TY-FIRST, TWO THOUSAND TWELVE SHALL CONTINUE TO BE COMMUNITY RATED WITH 19 OTHER GROUPS OF ONE AS PROVIDED FOR BY SECTIONS THREE THOUSAND TWO 20 HUNDRED THIRTY-ONE AND FOUR THOUSAND THREE HUNDRED SEVENTEEN OF THIS 21 CHAPTER AS SAID SECTIONS THREE THOUSAND TWO HUNDRED THIRTY-ONE AND FOUR 22 THOUSAND THREE HUNDRED SEVENTEEN WERE IN EFFECT PRIOR TO THE EFFECTIVE 23 DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND NINE THAT ADDED THIS 24 SUBSECTION. HOLDERS OF ALL SUCH CONTRACTS OR POLICIES SHALL HAVE THE 25 RIGHT TO RENEW AND CONTINUE THEIR CONTRACTS OR POLICIES UNDER THE SAME 26 TERMS AND CONDITIONS UNTIL JANUARY FIRST, TWO THOUSAND SEVENTEEN. 27 S 4. Subparagraph (O) of paragraph 4 of subsection (j) of section 4301 28 of the insurance law, as added by section 8 of part A of chapter 1 of 29 the laws of 2002, is amended to read as follows: 30 (O) Notwithstanding any other provision of law, the board shall direct 31 that such proceeds of the public asset are disbursed in accordance with 32 direction from the director of the division of the budget and trans- 33 ferred to the credit of the tobacco control and insurance initiatives 34 pool, or its successor to be used for the exclusive purposes provided 35 therein, AND TO THE STOP LOSS FUNDS ESTABLISHED PURSUANT TO SUBSECTION 36 (D) OF SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER 37 AND SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SEVEN OF THIS ARTICLE. 38 S 5. Section 4321-a of the insurance law, as added by chapter 1 of the 39 laws of 1999, paragraph 2 of subsection (e) as amended by chapter 419 of 40 the laws of 2000, is amended to read as follows: 41 S 4321-a. Fund for standardized individual enrollee direct payment 42 contracts. (a) The superintendent shall establish a fund from which 43 health maintenance organizations may receive reimbursement, to the 44 extent of funds available therefor, for claims paid by such health main- 45 tenance organizations for members covered under standardized individual 46 enrollee direct payment contracts issued pursuant to section four thou- 47 sand three hundred twenty-one of this article AND FOR ALL SMALL GROUP 48 POLICES OR CONTRACTS ISSUED AFTER JANUARY FIRST, TWO THOUSAND TWELVE. 49 The fund established by the superintendent pursuant to this section 50 shall be known as the direct payment stop loss fund. Commencing in 51 calendar year two thousand, health maintenance organizations shall be 52 eligible to receive reimbursement from the direct payment stop loss fund 53 for ninety percent of claims paid between twenty thousand and one 54 hundred thousand dollars in a calendar year for any member covered under 55 a contract issued pursuant to section four thousand three hundred twen- 56 ty-one of this article AND FOR ALL SMALL GROUP POLICIES OR CONTRACTS S. 648 7 1 ISSUED AFTER JANUARY FIRST, TWO THOUSAND TWELVE. For the purposes of 2 this section, claims shall include health care claims paid by a health 3 maintenance organization on behalf of a covered member pursuant to such 4 standardized direct payment contracts OR A SMALL GROUP POLICY OR 5 CONTRACT. 6 (b) The superintendent shall promulgate regulations setting forth 7 procedures for the operation of the direct payment stop loss fund AND 8 THE SMALL GROUP STOP LOSS FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF 9 SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER and the 10 distribution of monies therefrom. 11 (c) Claims shall be reported and funds shall be distributed on a 12 calendar year basis. Claims shall be eligible for reimbursement only for 13 the calendar year in which the claims are paid. Once claims paid on 14 behalf of a member reach or exceed one hundred thousand dollars in a 15 given calendar year, no further claims paid on behalf of such member in 16 such calendar year shall be eligible for reimbursement. 17 (d) Each health maintenance organization shall submit a request for 18 reimbursement from the stop loss fund on a form prescribed by the super- 19 intendent. Such request for reimbursement shall be submitted no later 20 than April first following the end of the calendar year for which the 21 reimbursement request is being made. The superintendent may require 22 health maintenance organizations to submit such claims data in 23 connection with the reimbursement request as he OR SHE deems necessary 24 to enable him OR HER to distribute monies and oversee the operation of 25 the direct payment stop loss fund AND THE SMALL GROUP STOP LOSS FUND. 26 The superintendent may require that such data be submitted on a per 27 member, aggregate and/or categorical basis. 28 (e) The superintendent shall calculate the total claims reimbursement 29 amount for all health maintenance organizations for the calendar year 30 for which claims are being reported. 31 (1) In the event that the total amount requested for reimbursement by 32 all health maintenance organizations for a calendar year exceeds funds 33 available for distribution for claims paid by all health maintenance 34 organizations during that same calendar year, the superintendent shall 35 provide for the pro-rata distribution of the available funds. Each 36 health maintenance organization shall be eligible to receive only such 37 proportionate amount of the available funds as the individual health 38 maintenance organization's total eligible claims paid bears to the total 39 eligible claims paid by all health maintenance organizations. 40 (2) In the event that (A) funds available for distribution for claims 41 paid by all health maintenance organizations during a calendar year 42 exceeds the total amount requested for reimbursement by all health main- 43 tenance organizations during that same calendar year, and (B) the total 44 amount requested for reimbursement by all health maintenance organiza- 45 tions from the direct payment out-of-plan stop loss fund exceeds the 46 amount available for distribution from such fund, then any excess funds 47 shall be reallocated for distribution to the direct payment out-of-plan 48 stop loss fund AND THE SMALL GROUP STOP LOSS FUND. Otherwise, such 49 excess funds shall be carried forward and will not affect monies appro- 50 priated for the direct payment stop loss fund in the next calendar year. 51 (f) Upon the request of the superintendent, each health maintenance 52 organization shall be required to furnish such data as the superinten- 53 dent deems necessary to oversee the operation of the direct payment stop 54 loss fund. Such data shall be furnished in a form prescribed by the 55 superintendent. S. 648 8 1 (g) The superintendent may obtain the services of an organization to 2 administer the direct payment stop loss fund. The superintendent shall 3 establish guidelines for the submission of proposals by organizations 4 for the purposes of administering the fund. The superintendent shall 5 make a determination whether to approve, disapprove or recommend modifi- 6 cation to the proposal of an applicant to administer the fund. An organ- 7 ization approved to administer the fund shall submit reports to the 8 superintendent in such form and at times as may be required by the 9 superintendent in order to facilitate evaluation and ensure orderly 10 operation of the fund, including, but not limited to an annual report of 11 the affairs and operations of the fund, such report to be delivered to 12 the superintendent and to the chairs of the senate finance committee and 13 assembly ways and means committee. An organization approved to adminis- 14 ter the fund shall maintain records in a form prescribed by the super- 15 intendent and which shall be available for inspection by or at the 16 request of the superintendent. The superintendent shall determine the 17 amount of compensation to be allocated to an approved organization as 18 payment for fund administration. Compensation shall be payable from the 19 direct payment stop loss fund. An organization approved to administer 20 the fund may be removed by the superintendent and must cooperate in the 21 orderly transition of services to another approved organization or to 22 the superintendent. 23 (h) If the superintendent deems it appropriate for the proper adminis- 24 tration of the direct payment stop loss fund, the administrator of the 25 fund, on behalf of and with the prior approval of the superintendent, 26 shall be authorized to purchase stop loss insurance and/or reinsurance 27 from an insurance company licensed to write such type of insurance in 28 this state. Such stop loss insurance and/or reinsurance may be purchased 29 to the extent of funds available therefor within such funds which are 30 available for purposes of the stop loss fund. 31 (I) AS INDIVIDUALS TRANSFER FROM THE STANDARDIZED INDIVIDUAL ENROLLEE 32 DIRECT PAYMENT CONTRACTS TO THE SMALL GROUP MARKET, AN ACTUARIALLY 33 APPROPRIATE AMOUNT, AS DETERMINED BY THE SUPERINTENDENT, SHALL BE TRANS- 34 FERRED FROM THE DIRECT PAYMENT STOP LOSS FUND TO THE SMALL GROUP STOP 35 LOSS FUND. 36 S 6. Section 4322-a of the insurance law, as added by chapter 1 of the 37 laws of 1999, paragraph 2 of subsection (e) as amended by chapter 419 of 38 the laws of 2000, is amended to read as follows: 39 S 4322-a. Fund for standardized individual enrollee direct payment 40 contracts which provide out-of-plan benefits. (a) The superintendent 41 shall establish a fund from which health maintenance organizations may 42 receive reimbursement, to the extent of funds available therefor, for 43 claims paid by such health maintenance organizations for members covered 44 under standardized individual enrollee direct payment contracts which 45 provide out-of-plan benefits issued pursuant to section four thousand 46 three hundred twenty-two of this article AND FOR ALL SMALL GROUP POLI- 47 CIES OR CONTRACTS ISSUED AFTER JANUARY FIRST, TWO THOUSAND TWELVE. The 48 fund established by the superintendent pursuant to this section shall be 49 known as "the direct payment out-of-plan stop loss fund". Commencing in 50 calendar year two thousand, health maintenance organizations shall be 51 eligible to receive reimbursement from the direct payment out-of-plan 52 stop loss fund for ninety percent of claims paid between twenty thousand 53 and one hundred thousand dollars in a calendar year for any member 54 covered under a contract issued pursuant to section four thousand three 55 hundred twenty-two of this article AND FOR ALL SMALL GROUP POLICIES OR 56 CONTRACTS ISSUED AFTER JANUARY FIRST, TWO THOUSAND TWELVE. For the S. 648 9 1 purposes of this section, claims shall include health care claims paid 2 by a health maintenance organization on behalf of a covered member 3 pursuant to contracts issued pursuant to section four thousand three 4 hundred twenty-two of this article OR A SMALL GROUP POLICY OR CONTRACT. 5 (b) The superintendent shall promulgate regulations that set forth 6 procedures for the operation of the direct payment out-of-plan stop loss 7 fund AND THE SMALL GROUP STOP LOSS FUND ESTABLISHED PURSUANT TO 8 SUBSECTION (D) OF SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF 9 THIS CHAPTER and the distribution of monies therefrom. 10 (c) Claims shall be reported and funds shall be distributed on a 11 calendar year basis. Claims shall be eligible for reimbursement only for 12 the calendar year in which the claims are paid. Once claims paid on 13 behalf of a member reach or exceed one hundred thousand dollars in a 14 given calendar year, no further claims paid on behalf of such member in 15 that calendar year shall be eligible for reimbursement. 16 (d) Each health maintenance organization shall submit a request for 17 reimbursement from the stop loss fund on a form prescribed by the super- 18 intendent. Such request for reimbursement shall be submitted no later 19 than April first following the end of the calendar year for which the 20 reimbursement request is being made. The superintendent may require 21 health maintenance organizations to submit such claims data in 22 connection with the reimbursement request as he OR SHE deems necessary 23 to enable him OR HER to distribute monies and oversee the operation of 24 the direct payment out-of-plan stop loss fund AND THE SMALL GROUP STOP 25 LOSS FUND. The superintendent may require that such data be submitted 26 on a per member, aggregate and/or categorical basis. 27 (e) The superintendent shall calculate the total claims reimbursement 28 amount for all health maintenance organizations for the calendar year 29 for which claims are being reported. 30 (1) In the event that the total amount requested for reimbursement by 31 all health maintenance organizations for a calendar year exceeds funds 32 available for distribution for claims paid by all health maintenance 33 organizations during that same calendar year, the superintendent shall 34 provide for the pro-rata distribution of the available funds. Each 35 health maintenance organization shall be eligible to receive only such 36 proportionate amount of the available funds as the individual health 37 maintenance organization's total eligible claims bears to the total 38 eligible claims paid by all health maintenance organizations. 39 (2) In the event that (A) funds available for distribution for claims 40 paid by all health maintenance organizations during a calendar year 41 exceeds the total amount requested for reimbursement by all health main- 42 tenance organizations during that same calendar year, and (B) the total 43 amount requested for reimbursement by all health maintenance organiza- 44 tions from the direct payment stop loss fund exceeds the amount avail- 45 able for distribution from such fund, then any excess funds shall be 46 reallocated for distribution to the direct payment stop loss fund AND 47 THE SMALL GROUP STOP LOSS FUND. Otherwise, such excess funds shall be 48 carried forward and shall not affect the monies appropriated for the 49 direct payment out-of-plan stop loss fund in the next calendar year. 50 (f) Upon the request of the superintendent, each health maintenance 51 organization shall be required to furnish such data as the superinten- 52 dent deems necessary to oversee the operation of the direct payment 53 out-of-plan stop loss fund. Such data shall be furnished in a form 54 prescribed by the superintendent. 55 (g) The superintendent may obtain the services of an organization to 56 administer the direct payment out-of-plan stop loss fund. The super- S. 648 10 1 intendent shall establish guidelines for the submission of proposals by 2 organizations for the purposes of administering the fund. The super- 3 intendent shall make a determination whether to approve, disapprove or 4 recommend modification to the proposal of an applicant to administer the 5 fund. An organization approved to administer the fund shall submit 6 reports to the superintendent in such form and at times as may be 7 required by the superintendent in order to facilitate evaluation and 8 ensure orderly operation of the fund, including, but not limited to, an 9 annual report of the affairs and operations of the fund, such report to 10 be delivered to the superintendent and to the chairs of the senate 11 finance committee and assembly ways and means committee. An organization 12 approved to administer the fund shall maintain records in a form 13 prescribed by the superintendent and which shall be available for 14 inspection by or at the request of the superintendent. The superinten- 15 dent shall determine the amount of compensation to be allocated to an 16 approved organization as payment for fund administration. Compensation 17 shall be payable from the direct payment out-of-plan stop loss fund. An 18 organization approved to administer the fund may be removed by the 19 superintendent and must cooperate in the orderly transition of services 20 to another approved organization or to the superintendent. 21 (h) If the superintendent deems it appropriate for the proper adminis- 22 tration of the direct payment out-of-plan stop loss fund, the adminis- 23 trator of the fund, on behalf of and with the prior approval of the 24 superintendent, shall be authorized to purchase stop loss insurance 25 and/or reinsurance from an insurance company licensed to write such type 26 of insurance in this state. Such stop loss insurance and/or reinsurance 27 may be purchased to the extent of funds available therefor within such 28 funds which are available for purposes of the stop loss fund. 29 (I) AS INDIVIDUALS TRANSFER FROM THE STANDARDIZED INDIVIDUAL ENROLLEE 30 DIRECT PAYMENT CONTRACTS WHICH PROVIDE OUT-OF-PLAN BENEFITS TO THE SMALL 31 GROUP MARKET, AN ACTUARIALLY APPROPRIATE AMOUNT, AS DETERMINED BY THE 32 SUPERINTENDENT, SHALL BE TRANSFERRED FROM THE DIRECT PAYMENT OUT-OF-PLAN 33 STOP LOSS FUND TO THE SMALL GROUP STOP LOSS FUND. 34 S 7. The section heading and subsections (a), (b), (c), (d), (e), (f), 35 (h), (i), (q) and (r) of section 4327 of the insurance law, as added by 36 chapter 1 of the laws of 1999, subsection (h) as amended by chapter 419 37 of the laws of 2000, are amended to read as follows: 38 Stop loss funds for standardized health insurance contracts issued to 39 qualifying small employers and qualifying individuals AND THE SMALL 40 GROUP MARKET. (a) The superintendent shall establish a fund from which 41 health maintenance organizations, corporations or insurers may receive 42 reimbursement, to the extent of funds available therefor, for claims 43 paid by such health maintenance organizations, corporations or insurers 44 for members covered under qualifying group health insurance contracts 45 issued pursuant to section THREE THOUSAND TWO HUNDRED THIRTY-ONE OF THIS 46 CHAPTER AND SECTIONS FOUR THOUSAND THREE HUNDRED SEVENTEEN AND four 47 thousand three hundred twenty-six of this article. This fund shall be 48 known as the "small employer stop loss fund". The superintendent shall 49 establish a separate and distinct fund from which health maintenance 50 organizations, corporations or insurers may receive reimbursement, to 51 the extent of funds available therefor, for claims paid by such health 52 maintenance organizations, corporations or insurers for members covered 53 under qualifying individual health insurance contracts issued pursuant 54 to section four thousand three hundred twenty-six of this article. This 55 fund shall be known as the "qualifying individual stop loss fund". S. 648 11 1 (b) Commencing on January first, two thousand one, health maintenance 2 organizations, corporations or insurers shall be eligible to receive 3 reimbursement for ninety percent of claims paid between thirty thousand 4 and one hundred thousand dollars in a calendar year for any member 5 covered under a standardized contract issued pursuant to section four 6 thousand three hundred twenty-six of this article OR A CONTRACT OR POLI- 7 CY ISSUED PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED THIRTY-ONE OF 8 THIS CHAPTER OR SECTION FOUR THOUSAND THREE HUNDRED SEVENTEEN OF THIS 9 ARTICLE, PURSUANT TO REGULATIONS PROMULGATED PURSUANT TO SUBSECTION (D) 10 OF SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER. 11 Claims paid for members covered under qualifying group health insurance 12 contracts shall be reimbursable from the small employer stop loss fund. 13 Claims paid for members covered under qualifying individual health 14 insurance contracts shall be reimbursable from the qualifying individual 15 stop loss fund; PROVIDED, HOWEVER, THAT THE SUPERINTENDENT, IN CONSULTA- 16 TION WITH THE DIRECTOR OF THE BUDGET, MAY TRANSFER AN ACTUARIALLY APPRO- 17 PRIATE AMOUNT OF FUNDS FROM THE SMALL EMPLOYER STOP LOSS FUND AND THE 18 QUALIFYING INDIVIDUAL STOP LOSS FUND TO ESTABLISH THE SMALL GROUP STOP 19 LOSS FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION THREE THOU- 20 SAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER. For the purposes of this 21 section, claims shall include health care claims paid by a health main- 22 tenance organization on behalf of a covered member pursuant to such 23 standardized contracts. 24 (c) The superintendent shall promulgate regulations that set forth 25 procedures for the operation of the small employer stop loss fund [and], 26 the qualifying individual stop loss fund, AND THE SMALL GROUP STOP LOSS 27 FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION THREE THOUSAND 28 TWO HUNDRED THIRTY-THREE OF THIS CHAPTER and distribution of monies 29 therefrom. 30 (d) The small employer stop loss fund shall operate separately from 31 the qualifying individual stop loss fund. Except as specified in 32 subsection (b) of this section with respect to calendar year two thou- 33 sand one, the level of stop loss coverage for the qualifying group 34 health insurance contracts and the qualifying individual health insur- 35 ance contracts need not be the same. The two stop loss funds need not be 36 structured or operated in the same manner, except as specified in this 37 section. The monies available for distribution from the stop loss funds 38 may be reallocated between the small employer stop loss fund [and], the 39 qualifying individual stop loss fund, AND THE SMALL GROUP STOP LOSS FUND 40 ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION THREE THOUSAND TWO 41 HUNDRED THIRTY-THREE OF THIS CHAPTER if the superintendent determines 42 that such reallocation is warranted due to enrollment trends. 43 (e) Claims shall be reported and funds shall be distributed from the 44 small employer stop loss fund [and], from the qualifying individual stop 45 loss fund, AND THE SMALL GROUP STOP LOSS FUND ESTABLISHED PURSUANT TO 46 SUBSECTION (D) OF SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF 47 THIS CHAPTER on a calendar year basis. Claims shall be eligible for 48 reimbursement only for the calendar year in which the claims are paid. 49 Once claims paid on behalf of a covered member reach or exceed one 50 hundred thousand dollars in a given calendar year, no further claims 51 paid on behalf of such member in that calendar year shall be eligible 52 for reimbursement. 53 (f) Each health maintenance organization, corporation or insurer shall 54 submit a request for reimbursement from each of the stop loss funds on 55 forms prescribed by the superintendent. Each of the requests for 56 reimbursement shall be submitted no later than April first following the S. 648 12 1 end of the calendar year for which the reimbursement requests are being 2 made. The superintendent may require health maintenance organizations, 3 corporations or insurers to submit such claims data in connection with 4 the reimbursement requests as he OR SHE deems necessary to enable him OR 5 HER to distribute monies and oversee the operation of the small employer 6 and qualifying individual stop loss funds AND THE SMALL GROUP STOP LOSS 7 FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION THREE THOUSAND 8 TWO HUNDRED THIRTY-THREE OF THIS CHAPTER. The superintendent may 9 require that such data be submitted on a per member, aggregate and/or 10 categorical basis. Data shall be reported separately for qualifying 11 group health insurance contracts [and], qualifying individual health 12 insurance contracts issued pursuant to section four thousand three 13 hundred twenty-six of this article, AND SMALL GROUP CONTRACTS OR POLI- 14 CIES ISSUED PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED THIRTY-ONE OF 15 THIS CHAPTER AND SECTION FOUR THOUSAND SEVENTEEN OF THIS ARTICLE. 16 (h) Upon the request of the superintendent, each health maintenance 17 organization shall be required to furnish such data as the superinten- 18 dent deems necessary to oversee the operation of the small employer and 19 qualifying individual stop loss funds AND THE SMALL GROUP STOP LOSS FUND 20 ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION THREE THOUSAND TWO 21 HUNDRED THIRTY-THREE OF THIS CHAPTER. Such data shall be furnished in a 22 form prescribed by the superintendent. Each health maintenance organiza- 23 tion, corporation or insurer shall provide the superintendent with 24 monthly reports of the total enrollment under the qualifying group 25 health insurance contracts and the qualifying individual health insur- 26 ance contracts issued pursuant to section four thousand three hundred 27 twenty-six of this article. The reports shall be in a form prescribed by 28 the superintendent. 29 (i) The superintendent shall separately estimate the per member annual 30 cost of total claims reimbursement from each OF THE THREE stop loss 31 [fund for qualifying individual health insurance contracts and for qual- 32 ifying group health insurance contracts] FUNDS based upon available data 33 and appropriate actuarial assumptions. Upon request, each health mainte- 34 nance organization, corporation or insurer shall furnish to the super- 35 intendent claims experience data for use in such estimations. 36 (q) The superintendent may obtain the services of an organization to 37 administer the stop loss funds established by this section AND THE SMALL 38 GROUP STOP LOSS FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION 39 THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER. If the super- 40 intendent deems it appropriate, he or she may utilize a separate organ- 41 ization for administration of the small employer stop loss fund [and], 42 the qualifying individual stop loss fund, AND THE SMALL GROUP STOP LOSS 43 FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION THREE THOUSAND 44 TWO HUNDRED THIRTY-THREE OF THIS CHAPTER. The superintendent shall 45 establish guidelines for the submission of proposals by organizations 46 for the purposes of administering the funds. The superintendent shall 47 make a determination whether to approve, disapprove or recommend modifi- 48 cation to the proposal of an applicant to administer the funds. An 49 organization approved to administer the funds shall submit reports to 50 the superintendent in such form and at times as may be required by the 51 superintendent in order to facilitate evaluation and ensure orderly 52 operation of the funds, including, but not limited to, an annual report 53 of the affairs and operations of the fund, such report to be delivered 54 to the superintendent and to the chairs of the senate finance committee 55 and the assembly ways and means committee. An organization approved to 56 administer the funds shall maintain records in a form prescribed by the S. 648 13 1 superintendent and which shall be available for inspection by or at the 2 request of the superintendent. The superintendent shall determine the 3 amount of compensation to be allocated to an approved organization as 4 payment for fund administration. Compensation shall be payable from the 5 stop loss coverage funds. An organization approved to administer the 6 funds may be removed by the superintendent and must cooperate in the 7 orderly transition of services to another approved organization or to 8 the superintendent. 9 (r) If the superintendent deems it appropriate for the proper adminis- 10 tration of the small employer stop loss fund [and/or], the qualifying 11 individual stop loss fund, OR THE SMALL GROUP STOP LOSS FUND ESTABLISHED 12 PURSUANT TO SUBSECTION (D) OF SECTION THREE THOUSAND TWO HUNDRED THIR- 13 TY-THREE OF THIS CHAPTER, the administrator of the fund, on behalf of 14 and with the prior approval of the superintendent, shall be authorized 15 to purchase stop loss insurance and/or reinsurance from an insurance 16 company licensed to write such type of insurance in this state. Such 17 stop loss insurance and/or reinsurance may be purchased to the extent of 18 funds available therefor within such funds which are available for 19 purposes of the stop loss funds established by this section. 20 S 8. This act shall take effect immediately; provided that sections 21 one and two of this act shall take effect on January 1, 2012; and 22 provided further that the superintendent of insurance is authorized and 23 directed to promulgate rules and regulations to implement the provisions 24 of this act, which rules and regulations must be adopted and filed with 25 the secretary of state by October 1, 2011. This act shall apply to all 26 policies and contracts of health insurance issued, renewed, modified, 27 altered or amended on or after January 1, 2012.