Redefines "small group" for the purposes of sections 3231 and 4317 of the insurance law

BILL NUMBER:S6917

Title of bill

An act to amend the insurance law, in relation to rating of individual and small group health insurance contracts and policies

Purpose

To amend the insurance law to preserve the current stop loss insurance market.

Summary of provisions

Section 1 of the bill provides an exception to the definition of small group coverage when coverage is written by a commercial insurer.

Section 2 of the bill provides that the prohibition against a commercial insurer acting as a third party administrator or providing stop loss coverage to self-funded small groups would continue to apply only to small groups of fifty or fewer employees or members.

Section 3 of the bill provides an exception to the definition of small group coverage when coverage is written by a corporation organized under Article 43 of the Insurance Law.

Section 4 of the bill provides that the prohibition against an Article 43 corporation acting as a third party administrator or providing stop loss coverage to self-funded small groups would continue to apply only to small groups of fifty or fewer employees or members.

Section 5 of the bill sets forth the effective date.

Justification

Since 1993, insurance companies have been permitted to write stop loss insurance and to provide administrative services to self-funded employer groups with 51 or more employees. A redefinition of what constitutes a small group, designed to comply with the federal Affordable Care Act, had the inadvertent effect of prohibiting insurers from continuing to issue stop loss coverage to groups with between 51 and 100 employees effective 2016. This bill will allow the current stop loss marketplace to operate uninterrupted for self-insured groups without directly impacting the insured small group market.

Legislative history

New bill.

Fiscal implications

None.

Effective date

Immediately.