N.Y. Comp. Codes R. & Regs. tit. 11 § 52.70

Current through Register Vol. 46, No. 45, November 2, 2024

Section 52.70 - Special rules for group, blanket and franchise insurance

(a) General rules for franchise insurance.

(1) The insurer may require evidence of insurability as to each person to be insured.

(2) The insurer shall submit a statement as to its rule, if any, with respect to the minimum participation requirement for insuring all applicants without a statement of good health.

(3) The insurer's underwriting rules shall be filed with the superintendent.

(4) In the case of association franchise insurance, eligible members shall be informed in writing of the sponsorship of the plan by the sponsoring organization or by its representative, agent or trustee.

(5) Franchise policies approved prior to the effective date of this Part may be used for new entrants to a franchise plan existing prior to the effective date of this Part, provided that the appropriate disclosure required by section 52.54(a) of this Part is made with respect to such new entrant.

(b) Special Rules for employer-employee franchise.

(1) Eligible classes. The class or classes of persons insured on the effective date of the plan shall consist of:

(i) not less than 2 nor more than 25 employees of an employer, except that in contributory cases 75 percent of the number of eligible employees may not exceed 25. The term employees may include officers and directors, partners, individual proprietors and retired employees;

(ii) two or more employees serving or employed in a governmental corporation, unit, department or agency, including elected or appointed officials; or

(iii) groups of 25 or more employees where it has been demonstrated to the satisfaction of the department that the franchise insurance coverage actually supplements and does not substitute for group coverage (including self-insurance).

(2) Participation requirements. All of the employees or all of any class or classes thereof determined by conditions pertaining to employment or such conditions, together with age or family status, or both, or except those employees as to whom the evidence of insurability submitted is not satisfactory to the insurer. If part or all of the premium is contributed by the insured employees pursuant to payroll deduction, such insurance may be provided if not less than 75 percent of all eligible employees or not less than 75 percent of all eligible employees in any class or classes are insured. However, with respect to the class of persons insured under subparagraph (1)(ii) of this subdivision, where the employee pays all of the premium, such insurance may be provided if not less than:

(i) 500 employees; or

(ii) 30 percent of the first 500 eligible employees plus 10 percent of all eligible employees in excess of 500, whichever is the lesser, participate unless the insurer individually underwrites all applicants on the basis of either medical examination or a questionnaire concerning the applicant's present health and medical history.

(c) Special rules for association franchise.

(1) Eligible classes. The class or classes of persons insured on the effective date of the plan shall consist of:

(i) 25 or more members of an incorporated or unincorporated association having a constitution or bylaws, where such association was formed and is maintained in good faith for purposes other than that of obtaining insurance for its members, has been in active existence for at least two years prior to the inception of the insurance of its members, and consists of persons having the same or similar occupation or profession;

(ii) not less than 4 nor more than 25 members of a labor union;

(iii) an association of civil service employees, or employers of civil service employees;

(iv) groups of individuals, such as dairy farmers, who supply or deliver materials, e.g., milk, to a central point of collection.

(2) Participation requirements.

(i) Not less than 500 members of an association of civil service employees, or 30 percent of the first 500 eligible members thereof plus 10 percent of all eligible members in excess of 500, whichever is the lesser, unless the insurer individually underwrites all applicants on the basis of either medical examination or a questionnaire concerning the applicant's present health and medical history, but in no event shall the number of persons insured be less than 25.

(ii) Not less than 30 percent of the first 500 eligible suppliers plus 10 percent of the next 3,500 eligible suppliers, unless the insurer individually underwrites all applicants on the basis of either medical examination or a questionnaire concerning the applicant's present health and medical history, but in no event shall the number of persons insured be less than 25.

(3) Policies written on cases composed of individuals who supply or deliver materials to a central point of collection shall be predicated upon the deduction of premiums from the payments for the materials supplied or delivered to the central point of collection and remitted to the insurer by the person making such deductions.

(4) Premium payment may be on a contributory or noncontributory basis.

(d) Blanket insurance.

(1) Blanket accident and blanket accident and health insurance may be written for groups conforming to the requirements of section 4237 (a)(3)(A) through (F) of the Insurance Law. Blanket accident and health insurance policies which provide hospital, surgical or medical expense coverage shall insure all persons without evidence of insurability provided that coverage is elected during an initial period of eligibility of at least 30 days. Rules may be established limiting future enrollment to specified time periods; however, such specified open enrollment time period for such future enrollment must be provided at least once every 12 months for a period of not less than 30 days. No enrollment limitation shall apply to enrollees who apply for coverage under the conditions described in sections 3221 (q)(5) and 4305 (k)(5) of the Insurance Law.

(2) Blanket health insurance may be written only for groups conforming to the requirements of section 4237 (a)(3)(C) (E)-(F) of the Insurance Law.

(3) Common carriers, taxicab companies, lessors of automobiles, innkeepers and other groups with a high degree of potential customer liability shall be regarded under section 4237 (a)(3)(F)(i) of the Insurance Law as groups substantially similar to groups specified under section 4237 (a)(3)(A) of the Insurance Law.

(4) Independent contractors engaged as theatrical groups on tour, orchestras or bands on special engagements, and professional athletes in specific events shall be regarded under section 4237 (a)(3)(F)(i) of the Insurance Law as substantially similar to employee-employer groups under section 4237 (a)(3)(B) of the Insurance Law.

(5) Exceptional hazards under section 4237 (a)(3)(B) of the Insurance Law shall include travel policies and policies covering hazardous sports. Coverage for dependents may be included only where the dependent actually participates in the hazards incident to the employment of the employee, as, for example, dependents accompanying the employee on special trips associated with his occupation.

(6) Under section 4237 (a)(3)(C) of the Insurance Law, a policy may be issued to a school, school district, board of education or school principal covering students and employees, and dependents (optional). Policies issued to camps, covering campers, organizations sponsoring youth programs, covering youth groups (e.g., boy scouts, girl scouts), youth sports groups or students participating in special events, such as tours, shall be regarded as substantially similar to the listed groups pursuant to section 4237 (a)(3)(F)(i) of the Insurance Law.

(7) Under section 4237 (a)(3)(D) of the Insurance Law, groups of fire departments, auxiliaries, ambulance corporations, first aid rescue squads and volunteer police departments will be considered as substantially similar to the listed groups pursuant to section 4237 (a)(3)(F)(i) of the Insurance Law. Coverage may be provided for any work connected with the activity for which the organization was founded, including fund-raising drives and participation in volunteer fire meets. Coverage for bystanders drafted into emergency service, and members of other departments volunteering for emergency service may be included.

(8) Nothing contained herein shall preclude an application under section 4237 (a)(3)(F) of the Insurance Law for a discretionary ruling of the superintendent regarding a substantially similar group other than as described herein.

(9) Every insurer issuing school blanket insurance policies pursuant to Insurance Law section 3221 shall send written notice of the enactment of chapter 748 of the Laws of 2006 (commonly referred to as "Timothy's Law") to all affected policyholders, certificateholders and members. If permitted by the school blanket policy, insurers may provide notice to the group policyholder for distribution to individual certificateholders but shall be responsible for providing the notice. The notice shall be provided no later than February 15, 2007. The notice shall:

(i) describe the key features of the benefits required under chapter 748 of the Laws of 2006;

(ii) state that a formal contract or certificate amendment shall be forthcoming that will explain the new benefits in greater detail;

(iii) provide a toll-free customer service telephone number that insureds may call to contact the insurer with questions concerning the new law; and

(iv) advise the policyholders that their premiums may be adjusted.

(e) Group insurance.

(1) No group policy replacing a plan of similar benefits of another insurer or self-insurer shall be written unless all persons of the same class insured under the prior plan are eligible without evidence of individual insurability or restrictions as to preexisting conditions, except those contained in the policy from which transfer is made to the extent of the lesser of the prior coverage or the coverage provided under the replacing plan.

(2) Except for dental insurance, disability income insurance subject to section 3234 of the Insurance Law as added by the Laws of 1993, chapter 650, insurance written under section 4235 (c)(1)(H) of the Insurance Law (unless such insurance is as described in paragraph [3] of this subdivision), and to the extent that insurance written under section 4235 (c)(1)(B) and (D) of the Insurance Law insures employees of an employer with less than 300 employees (unless such insurance is as described in paragraph [3] of this subdivision), any group policy insuring 300 or more persons, excluding dependents, shall insure all persons without evidence of individual insurability, provided that coverage is elected during an initial period of eligibility of at least 30 days.

(3) Any group hospital, surgical or medical expense insurance policy shall insure all persons without evidence of insurability, provided that coverage is elected during an initial period of eligibility of at least 30 days. Rules may be established limiting future enrollment to specified time periods; however, such specified open enrollment time period for such future enrollment must be provided at least once every 12 months for a period of not less than 30 days. No enrollment limitation shall apply to enrollees who apply for coverage under the conditions described in sections 3221 (q)(5) and 4305 (k)(5) of the Insurance Law.

(4) Where a group offers more than one health care plan to its employees or members, rules may be established controlling the transfer between the health care plans so long as transfer is permitted no less than once each calendar year.

(5) Every insurer, article 43 corporation and health maintenance organization (HMO) shall send written notice of the enactment of chapter 748 of the Laws of 2006 to all affected group policyholders, certificateholders, and members. If permitted by the group contract, an insurer, article 43 corporation or HMO may provide notice to the group policyholder for distribution to individual certificateholders and members, but such insurer, article 43 corporation or HMO ultimately shall be responsible for providing the notice. The notice shall be provided no later than February 15, 2007. The notice shall:

(i) describe the key features of the benefits required pursuant to chapter 748 of the Laws of 2006;

(ii) state that a formal contract or certificate amendment will be forthcoming that will explain the new benefits in greater detail;

(iii) provide a toll-free customer service telephone number that insureds may call to contact the insurer, article 43 corporation, or HMO with questions concerning the new law; and

(iv) advise the policyholders that their premiums may be adjusted.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 52.70