A 8763: Amends the definition of "small group" for purposes of health insurance policies and contracts to fifty employees or fewer; repeals provisions requiring the superintendent to conduct an impact study.

  
  STATE OF NEW YORK ________________________________________________________________________ 8763 2025-2026 Regular Sessions  IN ASSEMBLY June 2, 2025 ___________ Introduced by M. of A. HUNTER -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law, in relation to the definition of small group; and to repeal section 7 of chapter 12 of the laws of 2016 relating to directing the superintendent of financial services to contract with an independent entity to conduct an assessment regarding the impact of the prohibition on the sale of stop loss, catastrophic and reinsurance coverage to the small group market relating thereto The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 1 of subsection (a) of section 3231 of the insur- 2 ance law, as amended by section 69 of part D of chapter 56 of the laws 3 of 2013, is amended to read as follows: 4 (1) No individual health insurance policy and no group health insur- 5 ance policy covering between one and fifty employees or members of the 6 group [or between one and one hundred employees or members of the group 7 for policies issued or renewed on or after January first, two thousand 8 sixteen] exclusive of spouses and dependents, hereinafter referred to as 9 a small group, providing hospital and/or medical benefits, including 10 medicare supplemental insurance, shall be issued in this state unless 11 such policy is community rated and, notwithstanding any other provisions 12 of law, the underwriting of such policy involves no more than the impo- 13 sition of a pre-existing condition limitation if otherwise permitted by 14 this article. 15 § 2. Paragraph 3 of subsection (a) of section 3231 of the insurance 16 law, as amended by section 69 of part D of chapter 56 of the laws of 17 2013, is amended to read as follows: 18 (3) Once accepted for coverage, an individual or small group cannot be 19 terminated by the insurer due to claims experience. Termination of an 20 individual or small group shall be based only on one or more of the 21 reasons set forth in subsection (g) of section three thousand two EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13016-01-5 
 A. 8763 2 1 hundred sixteen or subsection (p) of section three thousand two hundred 2 twenty-one of this article. Group hospital and/or medical coverage, 3 including medicare supplemental insurance, obtained through an out-of- 4 state trust covering a group of fifty or fewer employees, [or between 5 one and one hundred employees for policies issued or renewed on or after 6 January first, two thousand sixteen,] or participating persons who are 7 residents of this state must be community rated regardless of the situs 8 of delivery of the policy. Notwithstanding any other provisions of law, 9 the underwriting of such policy may involve no more than the imposition 10 of a pre-existing condition limitation if permitted by this article, and 11 once accepted for coverage, an individual or small group cannot be 12 terminated due to claims experience. Termination of an individual or 13 small group shall be based only on one or more of the reasons set forth 14 in subsection (p) of section three thousand two hundred twenty-one of 15 this article. 16 § 3. Paragraph 1 of subsection (h) of section 3231 of the insurance 17 law, as amended by chapter 12 of the laws of 2016, is amended to read as 18 follows: 19 (1) Notwithstanding any other provision of this chapter, no insurer, 20 subsidiary of an insurer, or controlled person of a holding company 21 system may act as an administrator or claims paying agent, as opposed to 22 an insurer, on behalf of small groups which, if they purchased insur- 23 ance, would be subject to this section. No insurer may provide stop 24 loss, catastrophic or reinsurance coverage to small groups which, if 25 they purchased insurance, would be subject to this section. [Provided, 26 however, the provisions of this paragraph shall not apply to: (A) the 27 renewal of stop loss, catastrophic or reinsurance coverage issued and in 28 effect on January first, two thousand fifteen to small groups covering 29 between fifty-one and one hundred employees or members of the group; and 30 (B) the issuance between January first, two thousand sixteen and Decem- 31 ber thirty-first, two thousand sixteen, of stop loss, catastrophic or 32 reinsurance coverage, and any renewal thereof, to a small group covering 33 between fifty-one and one hundred employees or members of the group, 34 provided that such group had stop loss, catastrophic or reinsurance 35 coverage issued and in effect on January first, two thousand fifteen.] 36 § 4. Paragraph 1 of subsection (a) of section 4317 of the insurance 37 law, as amended by section 72 of part D of chapter 56 of the laws of 38 2013, is amended to read as follows: 39 (1) No individual health insurance contract and no group health insur- 40 ance contract covering between one and fifty employees or members of the 41 group, [or between one and one hundred employees or members of the group 42 for policies issued or renewed on or after January first, two thousand 43 sixteen] exclusive of spouses and dependents, including contracts for 44 which the premiums are paid by a remitting agent for a group, hereinaft- 45 er referred to as a small group, providing hospital and/or medical bene- 46 fits, including Medicare supplemental insurance, shall be issued in this 47 state unless such contract is community rated and, notwithstanding any 48 other provisions of law, the underwriting of such contract involves no 49 more than the imposition of a pre-existing condition limitation if 50 otherwise permitted by this article. 51 § 5. Paragraph 1 of subsection (e) of section 4317 of the insurance 52 law, as amended by chapter 12 of the laws of 2016, is amended to read as 53 follows: 54 (1) Notwithstanding any other provision of this chapter, no insurer, 55 subsidiary of an insurer, or controlled person of a holding company 56 system may act as an administrator or claims paying agent, as opposed to 
 A. 8763 3 1 an insurer, on behalf of small groups which, if they purchased insur- 2 ance, would be subject to this section. No insurer may provide stop 3 loss, catastrophic or reinsurance coverage to small groups which, if 4 they purchased insurance, would be subject to this section. [Provided, 5 however, the provisions of this paragraph shall not apply to: (A) the 6 renewal of stop loss, catastrophic or reinsurance coverage issued and in 7 effect on January first, two thousand fifteen to small groups covering 8 between fifty-one and one hundred employees or members of the group; and 9 (B) the issuance between January first, two thousand sixteen, and Decem- 10 ber thirty-first, two thousand sixteen, of stop loss, catastrophic or 11 reinsurance coverage, and any renewal thereof, to a small group covering 12 between fifty-one and one hundred employees or members of the group, 13 provided that such group had stop loss, catastrophic or reinsurance 14 coverage issued and in effect on January first, two thousand fifteen.] 15 § 6. Paragraph 1 of subsection (g) of section 3231 of the insurance 16 law, as amended by chapter 12 of the laws of 2016, is amended to read as 17 follows: 18 (1) [(A)] This section shall also apply to policies issued to a group 19 defined in subsection (c) of section four thousand two hundred thirty- 20 five of this chapter, including but not limited to an association or 21 trust of employers, if the group includes one or more member employers 22 or other member groups having [one hundred] fifty or fewer employees or 23 members exclusive of spouses and dependents. For a policy issued or 24 renewed on or after January first, two thousand fourteen, if the group 25 includes one or more member small group employers eligible for coverage 26 subject to this section, then such member employers shall be classified 27 as small groups for rating purposes and the remaining members shall be 28 rated consistent with the rating rules applicable to such remaining 29 members pursuant to paragraph two of this subsection. [(B) Subparagraph 30 A of this paragraph shall not apply to either the renewal of a policy 31 issued to a group or the issuance, between January first, two thousand 32 sixteen and December thirty-first, two thousand sixteen, of a policy, 33 and any renewal thereof, to a group, provided that the following three 34 requirements are met: (I) the group had been issued a policy that was in 35 effect on July first, two thousand fifteen; (II) the group had member 36 employers, who, on or after July first, two thousand fifteen, have 37 between fifty-one and one hundred employees, exclusive of spouses and 38 dependents; and (III) the group is either: (i) comprised entirely of one 39 or more municipal corporations or districts (as such terms are defined 40 in section one hundred nineteen-n of the general municipal law); or (ii) 41 comprised entirely of nonpublic schools providing education in any grade 42 from pre-kindergarten through twelfth grade.] 43 § 7. Paragraph 1 of subsection (d) of section 4317 of the insurance 44 law, as amended by chapter 12 of the laws of 2016, is amended to read as 45 follows: 46 (1) [(A)] This section shall also apply to a contract issued to a 47 group defined in subsection (c) of section four thousand two hundred 48 thirty-five of this chapter, including but not limited to an association 49 or trust of employers, if the group includes one or more member employ- 50 ers or other member groups having [one hundred] fifty or fewer employees 51 or members exclusive of spouses and dependents. For a contract issued or 52 renewed on or after January first, two thousand fourteen, if the group 53 includes one or more member small group employers eligible for coverage 54 subject to this section, then such member employers shall be classified 55 as small groups for rating purposes and the remaining members shall be 56 rated consistent with the rating rules applicable to such remaining 
 A. 8763 4 1 members pursuant to paragraph two of this subsection. [(B) Subparagraph 2 A of this paragraph shall not apply to either the renewal of a contract 3 issued to a group or the issuance, between January first, two thousand 4 sixteen and December thirty-first, two thousand sixteen, of a contract, 5 and any renewal thereof, to a group, provided that the following three 6 requirements are met: (I) the group had been issued a contract that was 7 in effect on July first, two thousand fifteen; (II) the group had member 8 employers, who, on or after July first, two thousand fifteen, have 9 between fifty-one and one hundred employees, exclusive of spouses and 10 dependents; and (III) the group is either: (i) comprised entirely of one 11 or more municipal corporations or districts (as such terms are defined 12 in section one hundred nineteen-n of the general municipal law); or (ii) 13 comprised entirely of nonpublic schools providing education in any grade 14 from pre-kindergarten through twelfth grade.] 15 § 8. Section 7 of chapter 12 of the laws of 2016 relating to directing 16 the superintendent of financial services to contract with an independent 17 entity to conduct an assessment regarding the impact of the prohibition 18 on the sale of stop loss, catastrophic and reinsurance coverage to the 19 small group market, is REPEALED. 20 § 9. This act shall take effect immediately; provided, however that 21 the amendments to paragraph 1 of subsection (g) and paragraph 1 of 22 subsection (h) of section 3231, and paragraph 1 of subsection (d) and 23 paragraph 1 of subsection (e) of section 4317 of the insurance law made 24 by sections six, three, seven and five of this act respectively shall 25 not affect the expiration and reversion of such paragraphs and shall 26 expire and be deemed repealed therewith.