New York Laws
Article 43 - Non-Profit Medical and Dental Indemnity, or Health and Hospital Service Corporations
4326 - Standardized Health Insurance Contracts for Qualifying Small Employers and Individuals.

(b) Participation in the program established by this section and
section four thousand three hundred twenty-seven of this article is
limited to corporations or insurers organized or licensed under this
article or article forty-two of this chapter and health maintenance
organizations issued a certificate of authority under article forty-four
of the public health law or licensed under this article. Participation
by all health maintenance organizations is mandatory, provided, however,
that such requirements shall not apply to a holder of a special purpose
certificate of authority issued pursuant to section four thousand four
hundred three-a of the public health law or a health maintenance
organization exclusively serving individuals enrolled pursuant to title
eleven of article five of the social services law, title eleven-D of
article five of the social services law, title one-A of article
twenty-five of the public health law or title eighteen of the federal
Social Security Act. On and after January first, two thousand one, all
health maintenance organizations shall offer qualifying group health
insurance contracts as defined in this section. For the purposes of this
section and section four thousand three hundred twenty-seven of this
article, article forty-three corporations or article forty-two insurers
which voluntarily participate in compliance with the requirements of
this program shall be eligible for reimbursement from the stop loss
funds created pursuant to section four thousand three hundred
twenty-seven of this article under the same terms and conditions as
health maintenance organizations.
(c) The following definitions shall be applicable to the insurance
contracts offered under the program established by this section:
(1) (A) A qualifying small employer is an employer with:
(i) not more than fifty employees;
(ii) no group health insurance that provides benefits on an expense
reimbursed or prepaid basis covering employees in effect during the
twelve month period prior to application for a qualifying group health
insurance contract under the program established by this section; and
(iii) at least thirty percent of its employees receiving annual wages
from the employer at a level equal to or less than thirty thousand
dollars. The thirty thousand dollar figure shall be adjusted
periodically pursuant to subparagraph (D) of this paragraph.
(B) The twelve month period set forth in item (ii) of subparagraph (A)
of this paragraph may be adjusted by the superintendent from twelve
months to eighteen months if he determines that the twelve month period
is insufficient to prevent inappropriate substitution of qualifying
group health insurance contracts for other health insurance contracts.
(C) An employer shall cease to be a qualifying small employer if any
health insurance that provides benefits on an expense reimbursed or
prepaid basis covering an employer's employees, other than qualifying
group health insurance purchased pursuant to this section, is purchased
or otherwise takes effect subsequent to purchase of qualifying group
health insurance under the program established by this section.
(D) The wage levels utilized in subparagraph (A) of this paragraph
shall be adjusted annually, beginning in two thousand two. The
adjustment shall take effect on July first of each year. For July first,
two thousand two, the adjustment shall be a percentage of the annual
wage figure specified in subparagraph (A) of this paragraph. For

subsequent years, the adjustment shall be a percentage of the annual
wage figure that took effect on July first of the prior year. The
percentage adjustment shall be the same percentage by which the current
year's non-farm federal poverty level, as defined and updated by the
federal department of health and human services, for a family unit of
four persons for the forty-eight contiguous states and Washington, D.C.,
changed from the same level established for the prior year.
(2) A qualifying group health insurance contract is a group contract
purchased from a health maintenance organization, corporation or insurer
by a qualifying small employer that provides the benefits set forth in
subsection (d) of this section. The contract must insure not less than
fifty percent of the employees.
(d) A qualifying group health insurance contract shall provide
coverage for the essential health benefits package as defined in
paragraph three of subsection (e) of section four thousand three hundred
six-h of this article.
(d-1) Covered services shall not include drugs, procedures and
supplies for the treatment of erectile dysfunction when provided to, or
prescribed for use by, a person who is required to register as a sex
offender pursuant to article six-C of the correction law, provided that:
(1) any denial of coverage pursuant to this subsection shall provide the
enrollee with the means of obtaining additional information concerning
both the denial and the means of challenging such denial; (2) all drugs,
procedures and supplies for the treatment of erectile dysfunction may be
subject to prior authorization by corporations, insurers or health
maintenance organizations for the purposes of implementing this
subsection; and (3) the superintendent shall promulgate regulations to
implement the denial of coverage pursuant to this subsection giving
health maintenance organizations, corporations and insurers at least
sixty days following promulgation of the regulations to implement their
denial procedures pursuant to this subsection.
(d-2) No person or entity authorized to provide coverage under this
section shall be subject to any civil or criminal liability for damages
for any decision or action pursuant to subsection (d-1) of this section,
made in the ordinary course of business if that authorized person or
entity acted reasonably and in good faith with respect to such
information.
(d-3) Notwithstanding any other provision of law, if the commissioner
of health makes a finding pursuant to subdivision twenty-three of
section two hundred six of the public health law, the superintendent is
authorized to remove a drug, procedure or supply from the services
covered by the standardized health insurance contract established by
this section for those persons required to register as sex offenders
pursuant to article six-C of the correction law.
(e) A qualifying group health insurance contract shall provide a level
of coverage that is designed to provide benefits that are actuarially
equivalent to eighty percent of the full actuarial value of the benefits
provided under the plan. The superintendent shall standardize the
benefit package and cost sharing requirements of qualified group health
insurance contracts consistent with coverage offered through the health
benefit exchange established by this state.
(f) The mandated and make-available benefits set forth in sections
three thousand two hundred twenty-one of this chapter and four thousand
three hundred three of this article shall not be applicable to the
contracts issued pursuant to this section.
(g) A health maintenance organization, corporation or insurer must
offer the benefit package without change or additional benefits. A

qualifying small employer shall be issued the benefit package in a
qualifying group health insurance contract.
(h) A health maintenance organization, corporation or insurer shall
obtain from the employer written certification at the time of initial
application and annually thereafter ninety days prior to the contract
renewal date that such employer meets the requirements of a qualifying
small employer pursuant to this section. A health maintenance
organization, corporation or insurer may require the submission of
appropriate documentation in support of the certification.
(i) Applications for qualifying group health insurance contracts must
be accepted from any qualifying small employer at all times throughout
the year. The superintendent, by regulation, may require health
maintenance organizations, corporations or insurers to give preference
to qualifying small employers whose employees have the lowest average
salaries.
(j) A corporation shall not impose any pre-existing condition
limitation in a qualifying group health insurance contract.
(k) A qualifying small employer shall elect whether to make coverage
under the qualifying group health insurance contract available to
dependents of employees. Any employee or dependent who is enrolled in
Medicare is ineligible for coverage, unless required by federal law.
Dependents of an employee who is enrolled in Medicare will be eligible
for dependent coverage provided the dependent is not also enrolled in
Medicare.
(l) A qualifying small employer must pay at least fifty percent of the
premium for employees covered under a qualifying group health insurance
contract and must offer coverage to all employees receiving annual wages
at a level of thirty thousand dollars or less, and at least one such
employee shall accept such coverage. The thirty thousand dollar wage
level shall be adjusted periodically in accordance with subparagraph (D)
of paragraph one of subsection (c) of this section. The employer premium
contribution must be the same percentage for all covered employees.
(m) Premium rate calculations for qualifying group health insurance
contracts shall be subject to the following:
(1) coverage must be community rated and the superintendent shall set
standard rating tiers for family units and standard rating relativities
between tiers applicable to all contracts subject to this section; and
(2) beginning January first, two thousand fourteen, every policy
subject to this section shall use standardized regions established by
the superintendent; and
(3) claims experience under contracts issued to qualifying small
employers must be pooled with the health maintenance organization,
corporation or insurer's small group business for rate setting purposes.
(n) A health maintenance organization, corporation or insurer shall
submit reports to the superintendent in such form and at times as may be
reasonably required in order to evaluate the operations and results of
the standardized health insurance program established by this section.