N.Y. Comp. Codes R. & Regs. tit. 11 § 360.9

Current through Register Vol. 46, No. 50, December 11, 2024

Section 360.9 - Prohibition on insurers providing administrative services or stop-loss, catastrophic or reinsurance coverages to self-insured arrangements, including small groups and association groups

(a) Except as permitted by subdivision (c) of this section, no insurer, subsidiary of an insurer, or controlled person of a holding company (as defined in article 15 of the Insurance Law), may act as an administrator or claims paying agent, as opposed to an insurer, on behalf of any small group or association group in any case where, if the group had purchased hospital or medical/surgical insurance coverage, the policy issued would be subject to the provisions of section 3231 or 4317 of the Insurance Law.

(b) Except as permitted by subdivision (c) of this section, no insurer, subsidiary of an insurer, or controlled person of a holding company (as defined in article 15 of the Insurance Law), may provide stop-loss, catastrophic or reinsurance coverage for any small group or association group in any case where if the group had purchased hospital or medical/surgical insurance coverage, the policy issued would be subject to the provisions of section 3231 or 4317 of the Insurance Law. Stop-loss, catastrophic or reinsurance coverage is defined as arrangements where the employer or group pays claims or expenses from its own funds to or on behalf of a covered person, but the employer or group purchases insured coverage of any kind from an insurer in which the insurer pays claims (or reimburses the employer or group for claims) of over a specified amount, or when all claims combined exceed a specified amount, or any similar arrangement. Nothing in this section is intended to prohibit an insurer which has issued insured, community-rated coverage to a small group or individual in accordance with the provisions of chapter 501 of the Laws of 1992, from purchasing reinsurance from a reinsurer, so long as such reinsurance does not affect the premium rate of the individual or small group which incurred the claims which caused the reinsurer to make payments to the ceding insurer pursuant to the reinsurance policy.

(c) Notwithstanding subdivision (a) or (b) of this section, certain administrative service arrangements and stop-loss, catastrophic or reinsurance coverages insuring a plan which were in effect on or before December 31, 1991 may temporarily continue beyond April 1, 1993 but only if all of the following conditions are met:

(1) The arrangement or coverage involves an association group as defined in section 360.2(a) of this Part. Administrative services arrangements and stop-loss, catastrophic or reinsurance coverages involving individuals or small groups not part of an association group may not be continued beyond April 1, 1993.

(2) The effective date of the administrative service arrangement or the coverage insuring a plan offered under the arrangement must have been on or before December 31, 1991.

(3) The acceptance of additional employers or other member groups comprised of 50 or fewer employees or members (exclusive of spouses and dependents) into the association group between June 1, 1992 and April 1, 1994 must be limited to 10 percent per year as compared to the total number of persons covered under the association group as of June 1, 1992. This limitation shall not apply in the event that an association group is in compliance with paragraphs (4), (5) and (6) of this subdivision, and so notifies the superintendent.

If these growth limitations are exceeded, an insurer may no longer continue to provide administrative services or stop-loss, catastrophic or reinsurance coverage to that association group. Nothing herein shall be deemed to limit the addition of employer groups or other member groups with more than 50 employees or members (exclusive of spouses and dependents).

(4) After April 1, 1994, the association group must accept all member employers or member groups into its health plan without any underwriting other than a preexisting condition waiting period consistent with those permitted by this Part. An insurer may apply to the superintendent for an extension or extensions of time beyond April 1, 1994 to meet this requirement. An extension will only be granted if the superintendent determines that a significant financial hardship to the group would result without the extension. Any such extension or extensions may not extend beyond April 1, 1996 and the 10 percent annual growth limitation described in paragraph (3) of this subdivision shall be reduced to five percent per year during any extension or extensions.

(5) After April 1, 1994, the cost for participation charged to member employers or member groups shall be the same for all persons covered through the association group, without regard to age, sex, health status or occupation. An insurer may apply to the superintendent for an extension or extensions of time beyond April 1, 1994 to meet this requirement. An extension will only be granted if the superintendent determines that a significant financial hardship to the group would result without the extension. Any such extension or extensions may not extend beyond April 1, 1996 and the 10 percent annual growth limitation described in paragraph (3) of this subdivision shall be reduced to five percent per year during any extension or extensions.

(6) An individual's or member employer or other member group's coverage cannot be terminated due to claims experience.

(7) The types of categories of employers or groups eligible to join the association group are not altered or expanded after June 1, 1992.

(8) The insurer has registered with the superintendent the names of such association groups, including the total number of persons covered as of June 1, 1992, on or before April 1, 1993. The insurer must also report annually to the department to demonstrate continued compliance with all of the requirements of this section.

(9) To register with the superintendent the names of association groups pursuant to paragraph (8) of this subdivision, a letter must be sent to the Health and Life Policy Bureau of the Insurance Department on or before April 1, 1993. For each association group to be registered the letter shall list:

(i) the name and address of each group which meets the requirements of subdivision (c) of this section;

(ii) the name, title and business telephone number of the primary person at the group responsible for working with the insurer;

(iii) the total number of persons (excluding spouses and dependents) covered by the group as of June 1, 1992;

(iv) a description of the type of group as a multiple employer welfare arrangement (MEWA) as defined in the Federal Employee Retirement Income Security Act (ERISA), any other multiple employer arrangements which are not MEWAs (such as collectively bargained plans), or which are not subject to ERISA such as governmental plans or church plans;

(v) whether the insurer provides administrative services only, provides stop-loss, catastrophic or reinsurance coverage, or both; and

(vi) the effective date of the health benefits coverage for covered employees offered by the group pursuant to the administrative services only and/or stop-loss, catastrophic or reinsurance arrangement with the insurer.

An insurer may not provide or continue to provide administrative services or stop-loss catastrophic or reinsurance coverage unless all of these conditions are met and continue to be met.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 360.9