NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7038 REVISED 5/15/23
SPONSOR: Woerner TITLE OF BILL:
An act to amend chapter 589 of the laws of 2015, amending the insurance
law relating to catastrophic or reinsurance coverage issued to certain
small groups, in relation to the effectiveness thereof; and to amend
chapter 588 of the laws of 2015, amending the insurance law relating to
catastrophic or reinsurance coverage issued to certain small groups, in
relation to the effectiveness thereof
PURPOSE:
To extend for two additional years provisions of law relating to
catastrophic or reinsurance coverage issued to certain small groups.
SUMMARY OF PROVISIONS:
Section 1. Section 5 of chapter 589 of the laws of 2015, amending the
insurance law relating to catastrophic or reinsurance coverage issued to
certain small groups,. as amended by chapter 588-of the laws of 2019 is
amended to extend the provisions for three years (2025).
Section 2. Section 5 of chapter 588 of the laws of 2015, amending the
insurance law relating to catastrophic' or reinsurance coverage issued
to certain small groups, as amended by chapter 202 of the laws of 2019
is amended to extend the provisions for three years (2025).
JUSTIFICATION:
Prior to the passage of the Affordable Care Act (ACA), New York State
and federal law allowed employers with fifty or more eligible individ-
uals to join together in various forms to purchase experience rated
health insurance coverage for their employees and participate in Health
Insurance Consortiums or Trusts. Upon passage of the ACA, each state was
required, for a time to redefine a "small group employer" to 1-100 from
the current definition of 150, In 2015, New York State changed its defi-
nition of a 'small group employer' to mean one to one hundred employ-
ees.'Accordingly, the law, among other restrictions, would result in any
employer falling below the one hundred employee threshold to no longer
have the ability to participate in an experience rated health insurance
plan and instead must participate in a community rated plan, thereby
forcing them out of their consortium or trusts.
It is estimated that at least 100 school districts have between 51-100
members. If these districts were forced out of their health care consor-
tiums they would have to go to the small group market which would
significantly increase their health care costs. Not only would the
districts with 51-100 members be impacted, but so would all those
remaining in their consortiums because there would be few members in
their consortium and less buying power. Moreover, many of these small
districts have many retirees on their health insurance plans who are not
counted in the employee count but would also enter the community rated
market. Because of the significant financial and operational impact this
change would cause for affected districts, several laws have been
enacted that have allowed districts to remain in their health care
consortiums on a temporary basis.
LEGISLATIVE HISTORY:
2021 - Chapter 406
2020 - Chapter 58
2019 - Chapter 202
2018 - Chapter 457
2017 - Chapter 370
2016 - Chapter 12
2015 -Chapter 588 & 589
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
7038
2023-2024 Regular Sessions
IN ASSEMBLY
May 10, 2023
___________
Introduced by M. of A. WOERNER -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend chapter 589 of the laws of 2015, amending the insurance
law relating to catastrophic or reinsurance coverage issued to certain
small groups, in relation to the effectiveness thereof; and to amend
chapter 588 of the laws of 2015, amending the insurance law relating
to catastrophic or reinsurance coverage issued to certain small
groups, in relation to the effectiveness thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 5 of chapter 589 of the laws of 2015, amending the
2 insurance law relating to catastrophic or reinsurance coverage issued to
3 certain small groups, as amended by chapter 406 of the laws of 2021, is
4 amended to read as follows:
5 § 5. This act shall take effect on the same date and in the same
6 manner as chapter 588 of the laws of 2015, takes effect and shall be
7 deemed repealed [ten] thirteen years thereafter.
8 § 2. Section 5 of chapter 588 of the laws of 2015, amending the insur-
9 ance law relating to catastrophic or reinsurance coverage issued to
10 certain small groups, as amended by chapter 406 of the laws of 2021, is
11 amended to read as follows:
12 § 5. This act shall take effect immediately; and shall be deemed
13 repealed [ten] thirteen years after it shall have become a law.
14 § 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08658-01-3
