New York Laws
Article 43 - Non-Profit Medical and Dental Indemnity, or Health and Hospital Service Corporations
4327 - Stop Loss Funds for Standardized Health Insurance Contracts Issued to Qualifying Small Employers and Qualifying Individuals.

(b) Health maintenance organizations, corporations or insurers shall
be eligible to receive reimbursement for ninety percent of claims paid
between five thousand and seventy-five thousand dollars in a calendar
year for any member covered under a standardized contract issued
pursuant to section four thousand three hundred twenty-six of this
article. Claims paid for members covered under qualifying group health
insurance contracts shall be reimbursable from the small employer stop
loss fund. For the purposes of this section, claims shall include health
care claims paid by a health maintenance organization on behalf of a
covered member pursuant to such standardized contracts.
(c) The superintendent shall promulgate regulations that set forth
procedures for the operation of the small employer stop loss fund and
distribution of monies therefrom.
(d) The superintendent may adjust the level of stop loss coverage
specified in subsection (b) of this section.
(e) Claims shall be reported and funds shall be distributed from the
small employer stop loss fund on a calendar year basis. Claims shall be
eligible for reimbursement only for the calendar year in which the
claims are paid. Once claims paid on behalf of a covered member reach or
exceed one hundred thousand dollars in a given calendar year, no further
claims paid on behalf of such member in that calendar year shall be
eligible for reimbursement.
(f) Each health maintenance organization, corporation or insurer shall
submit a request for reimbursement from the stop loss fund on forms
prescribed by the superintendent. The requests for reimbursement shall
be submitted no later than April first following the end of the calendar
year for which the reimbursement requests are being made. The
superintendent may require health maintenance organizations,
corporations or insurers to submit such claims data in connection with
the reimbursement requests as he deems necessary to enable him to
distribute monies and oversee the operation of the small employer stop
loss fund. The superintendent may require that such data be submitted on
a per member, aggregate and/or categorical basis.
(g) For the stop loss fund, the superintendent shall calculate the
total claims reimbursement amount for all health maintenance
organizations, corporations or insurers for the calendar year for which
claims are being reported.
(1) In the event that the total amount requested for reimbursement for
a calendar year exceeds funds available for distribution for claims paid
during that same calendar year, the superintendent shall provide for the
pro-rata distribution of the available funds. Each health maintenance
organization, corporation or insurer shall be eligible to receive only
such proportionate amount of the available funds as the individual
health maintenance organization's, corporation's or insurer's total
eligible claims paid bears to the total eligible claims paid by all
health maintenance organizations, corporations or insurers.
(2) In the event that funds available for distribution for claims paid
by all health maintenance organizations, corporations or insurers during
a calendar year exceeds the total amount requested for reimbursement by

all health maintenance organizations, corporations or insurers during
that same calendar year, any excess funds shall be carried forward and
made available for distribution in the next calendar year. Such excess
funds shall be in addition to the monies appropriated for the stop loss
fund in the next calendar year.
(h) Upon the request of the superintendent, each health maintenance
organization shall be required to furnish such data as the
superintendent deems necessary to oversee the operation of the small
employer stop loss fund. Such data shall be furnished in a form
prescribed by the superintendent. Each health maintenance organization,
corporation or insurer shall provide the superintendent with monthly
reports of the total enrollment under the qualifying group health
insurance contracts issued pursuant to section four thousand three
hundred twenty-six of this article. The reports shall be in a form
prescribed by the superintendent.
(i) The superintendent shall separately estimate the per member annual
cost of total claims reimbursement from each stop loss fund for
qualifying group health insurance contracts based upon available data
and appropriate actuarial assumptions. Upon request, each health
maintenance organization, corporation or insurer shall furnish to the
superintendent claims experience data for use in such estimations.
(j) The superintendent shall determine total eligible enrollment under
qualifying group health insurance contracts. The total eligible
enrollment shall be determined by dividing the total funds available for
distribution from the small employer stop loss fund by the estimated per
member annual cost of total claims reimbursement from the small employer
stop loss fund.
(k) The superintendent shall suspend the enrollment of new employers
under qualifying group health insurance contracts if the superintendent
determines that the total enrollment reported by all health maintenance
organizations, corporations or insurers under such contracts exceeds the
total eligible enrollment, thereby resulting in anticipated annual
expenditures from the small employer stop loss fund in excess of the
total funds available for distribution from such stop loss fund.
(l) The superintendent shall provide the health maintenance
organizations, corporations or insurers with notification of any
enrollment suspensions as soon as practicable after receipt of all
enrollment data.
(m) If at any point during a suspension of enrollment of new
qualifying small employers, the superintendent determines that funds are
sufficient to provide for the addition of new enrollments, the
superintendent shall be authorized to reactivate new enrollments and to
notify all health maintenance organizations, corporations or insurers
that enrollment of new employers may again commence.
(m-1) In the event that the superintendent suspends the enrollment of
new individuals for qualifying group health insurance contracts, the
superintendent shall ensure that small employers seeking to enroll in a
qualified group health insurance contract pursuant to section
forty-three hundred twenty-six of this article are provided information
on and directed to coverage options available through the health benefit
exchange established by this state.
(n) The suspension of issuance of qualifying group health insurance
contracts to new qualifying small employers shall not preclude the
addition of new employees of an employer already covered under such a
contract or new dependents of employees already covered under such
contracts.
(o) The premiums for qualifying group health insurance contracts must
factor in the availability of reimbursement from the small employer stop
loss fund.
(p) The superintendent may obtain the services of an organization to
administer the stop loss funds established by this section. The
superintendent shall establish guidelines for the submission of
proposals by organizations for the purposes of administering the funds.
The superintendent shall make a determination whether to approve,
disapprove or recommend modification to the proposal of an applicant to
administer the funds. An organization approved to administer the funds
shall submit reports to the superintendent in such form and at times as
may be required by the superintendent in order to facilitate evaluation
and ensure orderly operation of the funds, including an annual report of
the affairs and operations of the fund, such report to be delivered to
the superintendent and to the chairs of the senate finance committee and
the assembly ways and means committee. An organization approved to
administer the funds shall maintain records in a form prescribed by the
superintendent and which shall be available for inspection by or at the
request of the superintendent. The superintendent shall determine the
amount of compensation to be allocated to an approved organization as
payment for fund administration. Compensation shall be payable from the
stop loss coverage funds. An organization approved to administer the
funds may be removed by the superintendent and must cooperate in the
orderly transition of services to another approved organization or to
the superintendent.
(q) If the superintendent deems it appropriate for the proper
administration of the small employer stop loss fund, the administrator
of the fund, on behalf of and with the prior approval of the
superintendent, shall be authorized to purchase stop loss insurance
and/or reinsurance from an insurance company licensed to write such type
of insurance in this state. Such stop loss insurance and/or reinsurance
may be purchased to the extent of funds available therefor within such
funds which are available for purposes of the stop loss funds
established by this section.
(r) The superintendent may access funding from the small employer stop
loss fund for the purposes of developing and implementing public
education, outreach and facilitated enrollment strategies targeted to
small employers without health insurance. The superintendent may
contract with marketing organizations to perform or provide assistance
with such education, outreach, and enrollment strategies. The
superintendent shall determine the amount of funding available for the
purposes of this subsection which in no event shall exceed eight percent
of the annual funding amounts for the small employer stop loss fund.
(s) Brooklyn healthworks pilot program and upstate healthworks pilot
program. Commencing on July first, two thousand six, the superintendent
shall access funding from the small employer stop loss fund for the
purpose of support and expansion of the existing pilot program Brooklyn
healthworks approved by the superintendent and for the establishment and
operation of a pilot program to be located in upstate New York. For the
purpose of this subsection, in no event shall the amount of funding
available exceed two percent of the annual funding amount for the small
employer stop loss fund.