Section 4327. Stop loss funds for standardized health insurance contracts issued to qualifying small employers and qualifying individuals

(a) The  superintendent shall establish a  fund  from  which  health  maintenance
  organizations,  corporations  or  insurers may receive reimbursement, to
  the extent of funds available therefor, for claims paid by  such  health
  maintenance  organizations, corporations or insurers for members covered
  under qualifying group health insurance  contracts  issued  pursuant  to
  section  four  thousand  three  hundred twenty-six of this article. This
  fund shall be  known  as  the  "small  employer  stop  loss  fund".  The
  superintendent  shall  establish a separate and distinct fund from which
  health maintenance organizations, corporations or insurers  may  receive
  reimbursement,  to  the  extent  of funds available therefor, for claims
  paid by such health maintenance organizations, corporations or  insurers
  for   members  covered  under  qualifying  individual  health  insurance
  contracts  issued  pursuant  to  section  four  thousand  three  hundred
  twenty-six  of this article. This fund shall be known as the "qualifying
  individual stop loss fund".
    (b) Commencing on January first, two thousand one, health  maintenance
  organizations,  corporations  or  insurers  shall be eligible to receive
  reimbursement for ninety percent of claims paid between thirty  thousand
  and  one  hundred  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. Claims paid for
  members covered under qualifying individual health  insurance  contracts
  shall be reimbursable from the qualifying individual 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
  the  qualifying  individual  stop  loss  fund and distribution of monies
  therefrom.
    (d) The small employer stop loss fund shall  operate  separately  from
  the  qualifying  individual  stop  loss  fund.  Except  as  specified in
  subsection (b) of  this  section  with  respect  to  calendar  year  two
  thousand  one,  the level of stop loss coverage for the qualifying group
  health  insurance  contracts  and  the  qualifying   individual   health
  insurance  contracts  need not be the same. The two stop loss funds need
  not be structured or operated in the same manner, except as specified in
  this section. The monies available for distribution from the  stop  loss
  funds  may  be reallocated between the small employer stop loss fund and
  the  qualifying  individual  stop  loss  fund  if   the   superintendent
  determines that such reallocation is warranted due to enrollment trends.
    (e)  Claims  shall be reported and funds shall be distributed from the
  small employer stop loss fund and from the  qualifying  individual  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 each of the stop loss  funds  on
  forms  prescribed  by  the  superintendent.  Each  of  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 and
  qualifying individual stop loss funds. The  superintendent  may  require
  that   such  data  be  submitted  on  a  per  member,  aggregate  and/or
  categorical basis. Data shall  be  reported  separately  for  qualifying
  group  health  insurance  contracts  and  qualifying  individual  health
  insurance contracts issued  pursuant  to  section  four  thousand  three
  hundred twenty-six of this article.
    (g)  For  each  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  and  qualifying individual stop loss funds. 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  and  the  qualifying
  individual 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  individual  health  insurance  contracts  and 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 and qualifying individual
  health  insurance  contracts.  For  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. For qualifying
  individual health insurance contracts,  the  total  eligible  enrollment
  shall   be   determined  by  dividing  the  total  funds  available  for

  distribution from the  qualifying  individual  stop  loss  fund  by  the
  estimated  per member annual cost of total claims reimbursement from the
  qualifying individual stop loss fund.
    (k)  The  superintendent shall suspend the enrollment of new employers
  under qualifying group health insurance contracts if he 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. The superintendent shall
  suspend the enrollment of new individuals  under  qualifying  individual
  health  insurance  contracts  if he 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 qualifying
  individual 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. The  superintendent's  determination  and  notification
  shall  be  made  separately  for  the  qualifying group health insurance
  contracts and for the qualifying individual health insurance contracts.
    (m) If  at  any  point  during  a  suspension  of  enrollment  of  new
  qualifying   small   employers   and/or   qualifying   individuals,  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
  and/or    individuals   may   again   commence.   The   superintendent's
  determination  and  notification  shall  be  made  separately  for   the
  qualifying  group  health  insurance  contracts  and  for the qualifying
  individual health insurance contracts.
    (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  suspension  of  issuance  of  qualifying  individual  health
  insurance contracts to new qualifying individuals shall not preclude the
  addition  of  new dependents to an existing qualifying individual health
  insurance contract.
    (p) The premiums for qualifying group health insurance contracts  must
  factor in the availability of reimbursement from the small employer stop
  loss  fund.  The  premiums  for  qualifying  individual health insurance
  contracts must factor in the  availability  of  reimbursement  from  the
  qualifying individual stop loss funds.
    (q)  The  superintendent may obtain the services of an organization to
  administer the stop loss funds  established  by  this  section.  If  the
  superintendent  deems  it  appropriate, he or she may utilize a separate
  organization for administration of the small employer stop loss fund and
  the qualifying individual  stop  loss  fund.  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, but not limited to, 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.
    (r)  If  the  superintendent  deems  it  appropriate  for  the  proper
  administration  of  the  small  employer  stop  loss  fund  and/or   the
  qualifying  individual 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.
    (s) The superintendent may access funding from the small employer stop
  loss fund and/or the  qualifying  individual  stop  loss  fund  for  the
  purposes  of  developing and implementing public education, outreach and
  facilitated  enrollment  strategies  targeted  to  small  employers  and
  working adults 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 and the qualifying
  individual stop loss fund.
    (t) 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  and  the
  qualifying  individual  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 amounts for the small employer  stop  loss
  fund and the qualifying individual stop loss fund.