Create State Health Exchange

Section 1. This act shall be known and may be cited as the "New York Health Benefit Exchange Act".

§ 2. The public authorities law is amended by adding a new article 10-E to read as follows:

ARTICLE 10-E

NEW YORK HEALTH BENEFIT EXCHANGE Section 3980. Statement of policy and purposes.

3981. Definitions.

3982. Establishment of the New York health benefit exchange.

3983. General powers of the exchange.

3984. Functions of the exchange.

3985. Special functions of the exchange related to health plan

certification and qualified health plan oversight.

3986. Regional advisory committees.

3987. Funding of the exchange.

3988. Tax exemption and tax contract by the state.

3989. Officers and employees.

3990. Limitation of liability; indemnification.

3991. Construction.

§ 3980. Statement of policy and purposes. The purpose of this article is to establish an American health benefit exchange in New York. The exchange shall facilitate enrollment in health coverage, the purchase and sale of qualified health plans in the individual market in this

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD01307-01-9

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state, and enroll individuals in health coverage for which they are eligible in accordance with federal law. The exchange also shall incorporate a small business health options program ("SHOP") to assist qualified employers in facilitating the enrollment of their employees in qualified health plans offered in the group market. It is the intent of the legislature, through the establishment of the exchange, to promote quality and affordable health coverage and care, reduce the number of uninsured persons, provide a transparent marketplace, educate consumers and assist individuals with access to coverage, premium assistance tax credits and cost-sharing reductions.

§ 3981. Definitions. For purposes of this article, the following definitions shall apply:

1. "Board" or "board of directors" means the board of directors of the exchange.

2. "Regional advisory committees" means the New York health benefit exchange regional advisory committees established pursuant to this article.

3. "Commissioner" means the commissioner of health.

4. "Exchange" means the New York health benefit exchange established pursuant to this article.

5. "Health plan" means a policy, contract or certificate, offered or issued by an insurer to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services. Health plan shall not include the following:

(a) accident insurance or disability income insurance, or any combination thereof;

(b) coverage issued as a supplement to liability insurance;

(c) liability insurance, including general liability insurance and automobile liability insurance;

(d) workers' compensation or similar insurance;

(e) automobile no-fault insurance;

(f) credit insurance;

(g) other similar insurance coverage, as specified in federal regulations, under which benefits for medical care are secondary or incidental to other insurance benefits;

(h) limited scope dental or vision benefits, benefits for long-term care insurance, nursing home insurance, home care insurance, or any combination thereof, or such other similar, limited benefits health insurance as specified in federal regulations, if the benefits are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the plan;

(i) coverage only for a specified disease or illness, hospital indemnity, or other fixed indemnity coverage;

(j) Medicare supplemental insurance as defined in section 1882(g)(1) of the federal social security act, coverage supplemental to the coverage provided under chapter 55 of title 10 of the United States code, or similar supplemental coverage provided under a group health plan if it is offered as a separate policy, certificate or contract of insurance; or

(k) the medical indemnity fund established pursuant to title four of article twenty-nine-D of the public health law.

6. "Insurer" means an insurance company subject to article thirty-two or forty-three of the insurance law, or a health maintenance organization certified pursuant to article forty-four of the public health law that contracts or offers to contract to provide, deliver, arrange, pay or reimburse any of the costs of health care services.

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7. "Qualified dental plan" means a limited scope dental plan that is issued by an insurer and certified in accordance with section thirtynine hundred eighty-five of this article.

8. "Qualified employer" means a small employer that elects to make its full-time employees eligible for one or more qualified health plans through the exchange.

9. "Qualified health plan" means a health plan that is issued by an insurer and certified in accordance with section thirty-nine hundred eighty-five of this article.

10. "Qualified individual" means an individual, including a minor, who:

(a) is seeking to enroll in a qualified health plan offered to individuals through the exchange;

(b) resides in this state;

(c) at the time of enrollment, is not incarcerated, other than incarceration pending the disposition of charges; and

(d) is, and is reasonably expected to be, for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States.

11. "SHOP" means the small business health options program designed to assist qualified employers in this state in facilitating the enrollment of their employees in qualified health plans offered in the group market in this state.

12. "Small employer" means, for plan years prior to January first, two thousand sixteen, an employer that employed an average of at least one but not more than fifty employees on business days during the preceding calendar year. For plan years beginning on and after January first, two thousand sixteen, small employer means an employer that employed an average of at least one but not more than one hundred employees on business days during the preceding calendar year. For purposes of the definition of small employer:

(a) all persons treated as a single employer under subsection (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as a single employer;

(b) an employer and any predecessor employer shall be treated as a single employer;

(c) all employees shall be counted, including part-time employees and employees who are not eligible for coverage through the employer;

(d) if an employer was not in existence throughout the preceding calendar year, then the determination of whether that employer is a small employer shall be based upon the average number of employees that the employer reasonably expects to employ on business days in the current calendar year;

(e) if a qualified employer that makes enrollment in qualified health plans available to its employees through the exchange ceases to be a small employer by reason of an increase in the number of its employees, then the employer shall continue to be treated as a qualified employer for purposes of this article for the period beginning with the increase and ending with the first day on which the employer does not make such enrollment available to its employees; and

(f) notwithstanding paragraphs (a) through (e) of this subdivision, an employer also shall be considered a small employer if the coverage it offers would be considered small group coverage under the insurance law and regulations promulgated thereunder.

13. "Small group market" means the health insurance market under which individuals receive health insurance coverage on behalf of themselves

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and their dependents through a group health plan maintained by a small employer.

14. "Superintendent" means the superintendent of financial services.

§ 3982. Establishment of the New York health benefit exchange. 1. There is hereby created a public benefit corporation to be known as the New York health benefit exchange. Such corporation shall be a body corporate and politic.

2. The purpose of the exchange is to facilitate the purchase and sale of qualified health plans, assist qualified employers in facilitating the enrollment of their employees in qualified health plans through the small business health options program, enroll individuals in health coverage for which they are eligible in accordance with federal law and carry out other functions set forth in this article.

3. (a) The exchange shall be governed by a board of directors consisting of nine voting directors, including the commissioner and the superintendent, who shall serve as ex officio directors.

(b) Seven directors shall be appointed by the governor, two of whom shall be appointed upon the recommendation of the temporary president of the senate and two of whom shall be appointed upon the recommendation of the speaker of the assembly. Each person appointed as a director pursuant to this paragraph shall have expertise in one or more of the following areas:

(i) Individual health care coverage;

(ii) Small employer health care coverage;

(iii) Health benefits administration;

(iv) Health care finance;

(v) Public or private health care delivery systems; and

(vi) Purchasing health plan coverage.

(c) Recommendations and appointments shall take into consideration the expertise of other directors recommended and appointed pursuant to this subdivision, so that the board composition reflects a diversity of experience.

(d) Recommendations by the temporary president of the senate and the speaker of the assembly shall be made within sixty days of the effective date of this article, within sixty days of the occurrence of a vacancy or within sixty days prior to the expiration of a term.

4. The governor shall appoint a chair of the board from among the directors who shall be subject to the advice and consent of the senate. Any director appointed by the governor as chair of the board may serve as acting chair until such time as a vote for confirmation is taken by the senate. No director appointed as chair shall serve as chair, or continue to serve as acting chair, if the senate has voted not to confirm such director as chair.

5. (a) The terms of the directors, other than the ex officio directors, shall be three years, provided, however, that the initial terms of one of the directors appointed upon recommendation of the temporary president of the senate, one of the directors appointed upon recommendation of the speaker of the assembly, and one of the directors appointed by the governor without recommendation shall be for two years.

(b) Vacancies occurring otherwise than by expiration of term of office shall be filled for the unexpired term in the manner provided for original appointment.

6. The directors shall not receive any compensation for their services as directors.

7. (a) Each director shall have the responsibility and duty to meet the requirements of this article and all applicable state and federal

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laws and regulations to serve the public interest of the individuals and small businesses seeking health care coverage through the exchange, consistent with section twenty-eight hundred twenty-four of this chapter.

(b) Each director shall be a state officer or employee for the purposes of sections seventy-three and seventy-four of the public officers law.

(c) No director may be employed or otherwise retained by the exchange.

8. (a) The board may create such committees as the board deems necessary. The first meeting of the board shall be held within thirty days after all directors are initially appointed. At the first meeting of the board, and at the first meeting in each subsequent year, the board shall elect from among its members a secretary and a treasurer. The board also shall elect such other officers as it shall deem necessary. The officers so elected shall have such powers and duties as are assigned by the by-laws and this chapter.

(b) The board, and any committee thereof, may hold meetings by electronic means consistent with article seven of the public officers law.

§ 3983. General powers of the exchange. The exchange shall have the following powers to be used in furtherance of its corporate purposes:

1. to sue and be sued and to participate in actions and proceedings, whether judicial, administrative, arbitrative or otherwise;

2. to have a corporate seal, and to alter such seal at pleasure, and to use it by causing it or a facsimile to be affixed or impressed or reproduced in any other manner;

3. to purchase, receive, take by grant, gift, devise, bequest or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and otherwise deal in and with, real or personal property, or any interest therein, wherever situated;