Authorizes the issuance of small business health insurance policies

§ 5001 Contains the short title "Small Business Health Act." § 5002 Sets out the legislative intent and findings. § 5003 defines the terms "small business," "insurer," "superintendent," and "eligible employee."

§ 5004 details the requirements of Small Business Health Insurance, and requires the Superintendent to ensure that all policies issued under this section meet certain criteria. This section further provides that a small business is only eligible to purchase a policy pursuant to this act if the business has not provided health care coverage within the 6 months preceding the effective date of this legislation. If a small business provides health care coverage within the 6 months, the business becomes eligible to purchase these limited benefit policies after 2 years.

§ 5005 exempts policies issued under this Act from state mandated coverage and service, and describes the core benefits which must be included in Small Business Health Insurance policies. The core benefits include maternity care, newborn care, and emergency medical services. This section also states that policies must provide coverage for ambulatory care and inpatient and outpatient acute medical and surgical care. Hospital and medical must include 30 days of hospitalization, individual annual deductibles not to exceed $2,000 and at least 6 physician office visits per year. This section also contains provisions related to managed care, intended to lessen the cost of health insurance, including, preventive care services, prior approval of elective hospital admissions, second surgical opinions, health care review services, preferred provider plans, pre-admission testing, and annual and lifetime benefit maximums. Finally, this section allows employers to select additional benefits, such as, optical and dental care to be included in policies.

§ 5006 would require policies issued under this Act to contain a notice stating: "This is a Small Business Limited Benefits Health Insurance Policy as approved by the NYS Insurance Department."

§ 5007 would establish reporting requirements for the superintendent to report to the Legislature concerning the experience of these policies and the progress of the program.

§2- Effective Date.

Justification

The high cost of employee health insurance packages has prevented many New York employers, especially small firms, from offering such plans to their employees. An increasing concern has focused on the number of working uninsured in this state, small businesses have received much attention in efforts to broaden access to health coverage. A 1989 survey conducted by the National Federation of Independent Business (NFIB), entitled "Small Business and Health," revealed that over 72% of respondents cite that their business profitability prevents them from providing health benefits to their employees. There is growing concern among many groups, including small business owners, that the state's statutory mandates requiring the inclusion of, or making available as an option, specific health care coverage and services in group health plans is contributing to elevating health insurance coverage, 50% declared that if health insurance costs fell by 20% or more, they would provide it as a benefit. It becomes clear that many small employers, even though they may want to offer health benefits for their employees, simply cannot afford to do so. This legislation, therefore, would create the Small Business Health Insurance Act to enable small businesses with fewer than 50 employees to offer a relatively low-cost, basic plan of health insurance that would cover basic and essential health services. Such a plan would be exempt from most of the coverages and services that NYS currently requires be included or made available in all group health plans purchased in this state. Included in the mandatory coverage under this bill would be maternity care, newborn care and emergency medical services, among others. Any plans offered under this program would also be subject to continuation and conversion rights as defined by the insurance law. In addition, an optional benefits package, selected by the employer, would be offered to and paid for by interested employees. The extension of coverage to an employee's spouse and dependent children would also be available to and paid for by the employee upon. request. The bill also includes language to lessen some regulatory mandates. For instance, small business health insurance policies could include deductible and co-payment amount greater than those specified by the Insurance Department regulations. This is an attempt to address the concern that at least some of the high cost of health insurance policies in NYS is due not to statutory mandates, but regulatory ones. The program includes managed care provisions intended to lower the cost of the product. It is believed that the inclusion of provisions such as second surgical opinions, preventative care services and preferred provider plans will further lower the cost of small business health insurance policies. This legislation will encourage more employers to offer health insurance benefits to employees, and as a result, provide basic coverage for a greater number of New York residents and workers who are currently uninsured. In conclusion, this legislation provides a safeguard to ensure that these policies are not used by some small businesses to reduce benefits for employees who are already receiving health insurance. If a small business has offered health care coverage to its employees within 6 months of this bill's effective date, the small business cannot purchase policies under this act for 2 years. This limits the possibility that the legislation will immediately result in a reduction of benefits for certain employees.

Prior legislative history

2007-2008: A.2356/S.184; 2005-2006: A.3513/S.3747; 2001-2002: A.1067/S.5165; A.2255/S.1479; 1995-1996: A.2089/S.2161; A.3684/S.2629; 1999-2000: A.396; 1993-1994: S.54-B. 2003-2004: 1997-1998:

Fiscal implications

None.

Effective date

This act shall take effect on the forty-fifth day after it shall have become a law.