Creates the freelancers health plan demonstration program; provides that such program would be a self-funded plan maintained by an association for the purpose of providing medical, surgical, or hospital services to independent workers; provides for an expiration of December 31, 2014.
TITLE OF BILL: An act to amend the insurance law, in relation to creating the freelancers health plan demonstration program; and providing for the repeal of such provisions upon expiration thereof
This bill would allow the previously authorized and extended freelancers demonstration program to run to its expiration date of December 31, 2014.
SUMMARY OF PROVISIONS:
This bill would allow for the continuation of the freelancers demonstration program and permit 25,000 currently insured independent workers to maintain their health benefits through December 2014. The bill is modeled on previously enacted legislation for student health plans sponsored by New York State independent universities and would safeguard members' health coverage by allowing them to move their coverage from Freelancers Insurance Company (FIC), an article 42 licensed insurance company, to a newly created self-insured health fund called Freelancers Health Plan, which would continue to offer eligible Freelancers Union members affordable health benefit plans. Freelancers Health Plan would be regulated by the Department of Financial Services and would be required to follow most of the same rules and regulations as a non-profit health insurer established pursuant to Article 43 of the Insurance law, including complying with stringent consumer protection provisions, minimum reserve requirements and financial reporting. The Plan would offer at least one plan that complies with the ACA metal tier requirements and, upon approval from CMS, its offerings would be considered Minimum Essential Coverage. In addition, the legislation would subject Freelancers Union to the penalties established pursuant to section 109 of the Insurance Law should the Freelancers Union violate the provisions of this bill. The legislation would maintain the existing demonstration program's current sunset date of December 31, 2014.
In 2009, New York State authorized a demonstration program through 2013 providing health insurance coverage to independent workers, a constituency which historically has had limited access to affordable, comprehensive health benefits. Freelancers Insurance Company (FIC) was created to serve independent workers who, unlike the majority of workers, are unable to access health benefits from a traditional employer. In. 2012, two years after the ACA was enacted, the legislature extended the sunset date to December 31, 2014 to allow FIC members one full year to acclimate to the new landscape created by the ACA. Today, more than 25,000 Freelancers Union members and their dependents receive affordable health insurance from FIC, a health insurance company wholly owned by Freelancers Union. FIC premiums are on average 40% less than plans available in the individual and group markets in New York City and last year FIC had a 0% premium increase across all plans, well below the 9.6% average increase for small group plans in New York State. Additionally, as of November 2012, FIC
members can access free primary care and preventative services through a state of the art medical home located in Downtown Brooklyn.
FIC is currently is licensed as an Article 42 insurance company and as such is regulated by DFS. Effective January 1, 2014, the ACA, as specified in recently promulgated CMS rules, will require health insurers participating in the individual or small group market in a state to offer insurance to all individuals or groups in that state, to offer coverage that fits within narrow actuarial value ranges and to participate in various risk sharing pools. The ACA failed to incorporate any exceptions to these requirements for existing insurance demonstration programs such as FIC that were designed to make affordable coverage available to independent workers with middle incomes. The obligations imposed under the ACA will impose severe hardship on FTC members, jeopardizing their ability to continue to obtain affordable coverage. Most importantly, FIC's actuaries estimate that application of the ACA would force FIC to raise premiums by _%, an average of $178 per member per month.
FTC members are a unique class of New Yorkers who historically have faced difficulty obtaining affordable health coverage. The majority of FIC members are middle class (annual incomes of -$50,000 to $100,000 for a family of four) and all members have no access to health insurance through a traditional employer relationship. They are not positioned favorably to purchase insurance through the exchanges since, as middle income earners, most of them will not be eligible for tax subsidies under the ACA and they have no employer relationship to fall back on. As such, FIC provides a needed service to middle class working New Yorkers that cannot be easily replicated. The bill would allow members of FIC to continue to receive their existing benefits for one year after implementation of the ACA reforms, as originally contemplated by the Legislature.
Immediately and shall expire and be deemed repealed on December 31, 2014.
STATE OF NEW YORK ________________________________________________________________________ 4526--B 2013-2014 Regular Sessions IN SENATE April 8, 2013 ___________Introduced by Sens. HANNON, SAVINO, BRESLIN, AVELLA, HOYLMAN -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the insurance law, in relation to creating the freelanc- ers health plan demonstration program; and providing for the repeal of such provisions upon expiration thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The insurance law is amended by adding a new section 1125 to read as follows: S 1125. FREELANCERS HEALTH PLAN DEMONSTRATION PROGRAM. (A) FOR PURPOSES OF THIS SECTION: (1) "FREELANCERS ASSOCIATION" MEANS AN ENTITY THAT: (A) IS EXEMPT FROM FEDERAL TAXATION UNDER SECTION 501(C)(3) OR (C)(4) OF THE INTERNAL REVENUE CODE; AND (B) PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN, HAS BEEN ISSUED ONE OR MORE HEALTH INSURANCE POLICIES BY AN INSURER UNDER SECTION ONE THOUSAND ONE HUNDRED TWENTY-THREE OF THIS ARTICLE. (2) "FREELANCERS HEALTH PLAN" OR "PLAN" MEANS A PLAN MAINTAINED BY A FREELANCERS ASSOCIATION FOR THE PURPOSE OF PROVIDING MEDICAL, SURGICAL, OR HOSPITAL SERVICES TO INDEPENDENT WORKERS WHO ARE MEMBERS OF THE FREE- LANCERS ASSOCIATION AND A MEMBER'S SPOUSE, CHILDREN AND OTHER PERSONS CHIEFLY DEPENDENT UPON THE MEMBER FOR SUPPORT AND MAINTENANCE. (3) "INDEPENDENT WORKER" MEANS AN INDIVIDUAL WHO: (A) IS AN INDEPEND- ENT CONTRACTOR; (B) IS SELF-EMPLOYED; (C) WORKS PART-TIME; (D) OBTAINS TEMPORARY WORK THROUGH AN EMPLOYMENT AGENCY; (E) PERFORMS TEMPORARY WORK FOR TWO OR MORE EMPLOYERS SIMULTANEOUSLY; (F) IS A DOMESTIC CHILD CARE WORKER; OR (G) IS HIRED TO WORK FULL-TIME FOR A SINGLE EMPLOYER FOR A PERIOD NOT TO EXCEED EIGHTEEN MONTHS IF SUCH EMPLOYER DOES NOT OFFEREXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10111-11-3 S. 4526--B 2
GROUP HEALTH INSURANCE TO EMPLOYEES EMPLOYED ON A TEMPORARY BASIS. AN INDIVIDUAL IS NOT AN INDEPENDENT WORKER IF HE OR SHE IS EMPLOYED FULL-TIME BY A SINGLE EMPLOYER, WITH THE EXCEPTION OF AN INDIVIDUAL WHO MEETS THE REQUIREMENTS OF SUBPARAGRAPH (D), (F) OR (G) OF THIS PARA- GRAPH. (4) "MEMBER CONTRACT" MEANS EVIDENCE OF COVERAGE FURNISHED TO AN INDE- PENDENT WORKER WHO IS A MEMBER OF A FREELANCERS ASSOCIATION THAT SETS FORTH ALL BENEFITS AND TERMS AND CONDITIONS WITH REGARD TO A FREELANCERS HEALTH PLAN. (5) "QUALIFIED ACTUARY" MEANS AN ACTUARY WHO IS A MEMBER IN GOOD STANDING OF THE AMERICAN ACADEMY OF ACTUARIES OR SOCIETY OF ACTUARIES, WITH EXPERIENCE IN ESTABLISHING RATES FOR SELF-INSURED TRUSTS PROVIDING HEALTH BENEFITS OR OTHER SIMILAR EXPERIENCE. (B) A FREELANCERS ASSOCIATION SHALL NOT ESTABLISH, MAINTAIN, OR OTHER- WISE PARTICIPATE IN A FREELANCERS HEALTH PLAN UNLESS THE FREELANCERS ASSOCIATION OBTAINS AND MAINTAINS A DEMONSTRATION PROGRAM WAIVER FROM THE SUPERINTENDENT PURSUANT TO THE PROVISIONS OF THIS SECTION. (C) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, A FREELANCERS ASSO- CIATION OPERATING A FREELANCERS HEALTH PLAN SHALL: (1) WITH THE EXCEPTION OF THE ENROLLMENT PROVISIONS AS PROVIDED FOR IN SECTION FOUR THOUSAND THREE HUNDRED SEVENTEEN OF THIS CHAPTER AND STABILIZATION OF HEALTH INSURANCE MARKETS AND PREMIUM RATES AS PROVIDED FOR IN SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER, BE SUBJECT TO THE SAME PROVISIONS AND REQUIREMENTS OF A CORPORATION ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND (2) PROVIDE THAT ITS PLAN WILL HAVE AN EXPECTED LOSS RATIO OF NOT LESS THAN EIGHTY-TWO PERCENT. IN REVIEWING A RATE FILING OR APPLICATION BY A PLAN, THE SUPERINTENDENT MAY MODIFY THE EIGHTY-TWO PERCENT EXPECTED MINIMUM LOSS RATIO REQUIREMENT IF THE SUPERINTENDENT DETERMINES THE MODIFICATION TO BE IN THE INTERESTS OF THE PEOPLE OF THIS STATE OR IF THE SUPERINTENDENT DETERMINES THAT A MODIFICATION IS NECESSARY TO MAIN- TAIN PLAN SOLVENCY. NO LATER THAN ONE HUNDRED TWENTY DAYS AFTER THE CLOSE OF A PLAN'S FISCAL YEAR, A PLAN SHALL ANNUALLY REPORT THE ACTUAL LOSS RATIO FOR THE PREVIOUS PLAN FISCAL YEAR IN A FORMAT ACCEPTABLE TO THE SUPERINTENDENT. IF THE EXPECTED LOSS RATIO IS NOT MET, THEN THE SUPERINTENDENT MAY DIRECT THE PLAN TO TAKE CORRECTIVE ACTION IN ADDITION TO THE REQUIREMENTS OF SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS CHAPTER; AND (3) INCLUDE IN ITS MEMBER CONTRACTS THAT THE MEMBER CONTRACT WILL NOT BE EFFECTIVE AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN; AND (4) PAY ALL CLAIMS UNDER ITS MEMBER CONTRACTS BY DECEMBER THIRTY-FIRST, TWO THOUSAND FIFTEEN. (D) A FREELANCERS ASSOCIATION SHALL FILE AN APPLICATION FOR A DEMON- STRATION PROGRAM WAIVER ON SUCH FORM AS THE SUPERINTENDENT MAY PRESCRIBE, AND SHALL PROVIDE TO THE SATISFACTION OF THE SUPERINTENDENT THE FOLLOWING: (1) A COPY OF THE MEMBER CONTRACT, INCLUDING A TABLE OF THE PREMIUM RATES CHARGED OR PROPOSED TO BE CHARGED, THAT EFFECTIVE JANUARY FIRST, TWO THOUSAND FOURTEEN, CONTAINS THE BENEFITS DESCRIBED IN PARAGRAPH ONE OF SUBSECTION (B) OF SECTION FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT OF THIS CHAPTER AND SHALL OFFER TO ITS MEMBERS, AT A MINIMUM, A CONTRACT AT ONE OF THE LEVELS OF COVERAGE, AS DEFINED IN SECTION 1302(D) OF THE AFFORDABLE CARE ACT, 42 USC 18022(D); (2) A REPORT INDICATING THE BENEFIT PROVISIONS, PREMIUM RATES, AND INCURRED MEDICAL LOSSES ASSOCIATED WITH THE FREELANCERS ASSOCIATION'S MEMBERS UNDER THE INSURANCE POLICIES INSURING THE FREELANCERS ASSOCI-S. 4526--B 3
ATION'S MEMBERS PURSUANT TO SECTION ONE THOUSAND ONE HUNDRED TWENTY-THREE OF THIS ARTICLE FOR THE THREE YEARS PRIOR TO THE DATE OF THE APPLICATION; (3) THE MOST RECENT CERTIFIED INDEPENDENTLY-AUDITED FINANCIAL STATE- MENT FOR THE FREELANCERS ASSOCIATION; (4) A REPORT PREPARED BY A QUALIFIED ACTUARY THAT SUPPORTS THE PROPOSED PREMIUMS FOR THE PLAN; (5) A COPY OF ALL AGREEMENTS BETWEEN THE FREELANCERS ASSOCIATION AND ANY PLAN ADMINISTRATOR, WITH REGARD TO THE FREELANCERS HEALTH PLAN; (6) A PRO-FORMA BALANCE SHEET, INCLUDING ACTUARIALLY DETERMINED CLAIMS LIABILITIES, AND STATEMENT OF REVENUE AND EXPENSES, INCLUDING REASONABLY PROJECTED EXPENSES, MEDICAL LOSSES, AND PREMIUMS TO BE CHARGED TO MEMBERS OF THE PLAN; (7) A NARRATIVE DESCRIPTION OF: (A) THE ACCOUNTING METHODOLOGY THAT THE FREELANCERS ASSOCIATION WILL UTILIZE, WHICH SHALL BE IN ACCORDANCE WITH STATUTORY ACCOUNTING PRAC- TICES AND PROCEDURES AS PRESCRIBED BY APPLICABLE PROVISIONS OF THIS CHAPTER AND REGULATIONS PROMULGATED THEREUNDER AS WOULD BE APPLICABLE TO A CORPORATION ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; (B) BILLING AND CLAIM PAYMENT PROCEDURES, INCLUDING THE NAMES AND CONTACT INFORMATION FOR THOSE PERSONS CHARGED WITH HANDLING ACCOUNTING AND CLAIMS ISSUES; AND (C) ANY COMPENSATION THE FREELANCERS ASSOCIATION WILL RECEIVE IN CONNECTION WITH THE PLAN; (8) A COPY OF ANY STOP-LOSS INSURANCE POLICY ISSUED OR PROPOSED TO BE ISSUED BY AN INSURER AUTHORIZED TO DO THE BUSINESS OF ACCIDENT AND HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN- IZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND (9) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE. (E) UPON COMPLIANCE WITH THIS SECTION, TO THE EXTENT PERMISSIBLE UNDER FEDERAL LAW, IF A FREELANCERS ASSOCIATION SUBMITS A MATERIALLY SATISFAC- TORY AND COMPLETE APPLICATION WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF THIS SECTION, THEN THE SUPERINTENDENT MAY ISSUE THE FREELANCERS ASSOCI- ATION A DEMONSTRATION PROGRAM WAIVER THAT IS EFFECTIVE ON OR BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN. EVERY DEMONSTRATION PROGRAM WAIVER SHALL CONTAIN THE NAME OF THE ENTITY AND ITS HOME OFFICE ADDRESS. THE SUPERINTENDENT SHALL REFUSE TO GRANT A DEMONSTRATION PROGRAM WAIVER TO AN APPLICANT THAT FAILS TO MEET THE REQUIREMENTS OF THIS SECTION. THE SUPERINTENDENT MAY REFUSE TO ISSUE ANY DEMONSTRATION PROGRAM WAIVER IF, IN THE SUPERINTENDENT'S JUDGMENT, THE REFUSAL WILL BEST PROMOTE THE INTERESTS OF THE PEOPLE OF THIS STATE. NOTICE OF REFUSAL SHALL BE IN WRITING AND SHALL SET FORTH THE BASIS FOR REFUSAL. IF THE APPLICANT SUBMITS A WRITTEN REQUEST WITHIN THIRTY DAYS AFTER RECEIPT OF THE NOTICE OF REFUSAL, THEN THE SUPERINTENDENT SHALL CONDUCT A HEARING TO GIVE THE APPLICANT THE OPPORTUNITY TO SHOW CAUSE WHY THE REFUSAL SHOULD NOT BE MADE FINAL. (F) IN ORDER TO OBTAIN AND MAINTAIN A DEMONSTRATION PROGRAM WAIVER, A FREELANCERS ASSOCIATION SHALL: (1) FILE A COMPLETE APPLICATION WITH THE SUPERINTENDENT IN ACCORDANCE WITH SUBSECTION (D) OF THIS SECTION; (2) HAVE WITHIN ITS OWN ORGANIZATION ADEQUATE RESOURCES AND COMPETENT PERSONNEL TO ADMINISTER THE FREELANCERS HEALTH PLAN OR, IN ORDER TO PROVIDE SUCH ADMINISTRATIVE SERVICES, IN WHOLE OR PART, HAVE CONTRACTED WITH A PERSON OR ENTITY TO SERVE AS A PLAN ADMINISTRATOR, DETERMINED BY THE FREELANCERS ASSOCIATION TO BE QUALIFIED BASED UPON WRITTEN DOCUMEN- TATION FURNISHED TO THE FREELANCERS ASSOCIATION, PROVIDED THAT THES. 4526--B 4
DOCUMENTATION SHALL BE MADE AVAILABLE TO THE SUPERINTENDENT UPON REQUEST; (3) ESTABLISH AND MAINTAIN PREMIUM RATES SUFFICIENT TO MEET ITS CONTRACTUAL OBLIGATIONS AND TO SATISFY THE RESERVE REQUIREMENTS SET FORTH IN SUBSECTION (H) OF THIS SECTION; (4) ESTABLISH AND MAINTAIN A FAIR AND EQUITABLE PROCESS FOR CLAIMS REVIEW, DISPUTE RESOLUTION, AND APPEAL PROCEDURES, INCLUDING ARBITRATION OF REJECTED CLAIMS, AND PROCEDURES FOR HANDLING CLAIMS FOR BENEFITS IN THE EVENT OF PLAN DISSOLUTION, THAT ARE SATISFACTORY TO THE SUPERINTEN- DENT AND ARE SUBJECT TO ARTICLE FORTY-NINE OF THIS CHAPTER; (5) PROVIDE MEMBERS WITH A MEMBER CONTRACT; (6) MAINTAIN ITS FUNCTIONS, ACTIVITIES AND SERVICES UNDERTAKEN AND PERFORMED PURSUANT TO A DEMONSTRATION PROGRAM WAIVER SEPARATE FROM ANY OTHER FUNCTION, ACTIVITY OR SERVICE THROUGH THE MAINTENANCE OF SEPARATE RECORDS, REPORTS AND ACCOUNTS FOR EACH SUCH FREELANCERS ASSOCIATION FUNCTION, ACTIVITY, OR SERVICE. THE RECORDS, REPORTS AND ACCOUNTS OF THE FREELANCERS ASSOCIATION SHALL BE MAINTAINED SEPARATELY FROM THOSE OF ANY OTHER PERSON OR FREELANCERS ASSOCIATION THAT IS A PARENT, SUBSIDIARY OR AFFILIATE OF THE FREELANCERS ASSOCIATION; (7) FILE ALL PLAN DOCUMENTS AND ANY AMENDMENTS THERETO WITH THE SUPER- INTENDENT AND RECEIVE THE SUPERINTENDENT'S APPROVAL IN ACCORDANCE WITH THIS SECTION; AND (8) PROVIDE PROMINENT, SEPARATELY STATED NOTICE TO ALL PLAN PARTIC- IPANTS THAT THEIR CONTRACTS WILL NOT BE EFFECTIVE AFTER DECEMBER THIR- TY-FIRST, TWO THOUSAND FOURTEEN, AND THAT THEIR POLICIES ARE NON-RENEWA- BLE FOR ANY PERIOD BEYOND DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN. (G) A FREELANCERS ASSOCIATION THAT HAS RECEIVED A DEMONSTRATION PROGRAM WAIVER SHALL FILE WITH THE SUPERINTENDENT, FOR THE SUPERINTEN- DENT'S PRIOR APPROVAL, ANY AMENDMENTS TO THE MEMBER CONTRACT, FREELANC- ERS HEALTH PLAN, OR PREMIUM RATES CHARGED FOR THE PLAN. (H)(1) A FREELANCERS ASSOCIATION SHALL ESTABLISH AND MAINTAIN A RESERVE TO BE DESIGNATED AS THE STATUTORY RESERVE FUND, IN AN AMOUNT EQUAL TO TWELVE AND ONE-HALF PER CENTUM OF THE NET PREMIUM INCOME OF THE PLAN, IN ADDITION TO RESERVES CONSISTING OF THE AMOUNTS NECESSARY TO SATISFY ALL CONTRACTUAL OBLIGATIONS AND LIABILITIES OF THE PLAN, INCLUD- ING: (A) A RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES THEREON REPORTED BUT NOT YET PAID, AND CLAIMS AND EXPENSES THEREON INCURRED BUT NOT YET REPORTED; AND (B) A RESERVE FOR UNEARNED PREMIUM EQUIVALENTS, COMPUTED PRO-RATA ON THE BASIS OF THE UNEXPIRED PORTION OF THE POLICY PERIOD. (2) IF AT ANY TIME THE RESERVE FUNDS REQUIRED TO BE ESTABLISHED PURSU- ANT TO THIS SECTION FALL BELOW THE REQUIRED MINIMUM AMOUNTS, THEN THE FREELANCERS ASSOCIATION SHALL IMMEDIATELY NOTIFY THE SUPERINTENDENT OF SUCH IMPAIRMENT. THE FREELANCERS ASSOCIATION SHALL CURE THE IMPAIRMENT WITHIN FIVE BUSINESS DAYS. (3) THE ASSETS CONSTITUTING THE FREELANCERS HEALTH PLAN'S STATUTORY RESERVE FUND SHALL CONSIST SOLELY OF CERTIFICATES OF DEPOSIT ISSUED BY A UNITED STATES BANK AND PAYABLE IN UNITED STATES LEGAL TENDER, OR SECURI- TIES REPRESENTING INVESTMENTS OF THE TYPES SPECIFIED IN PARAGRAPHS ONE, TWO, THREE, EIGHT, AND TEN OF SUBSECTION (A) OF SECTION ONE THOUSAND FOUR HUNDRED FOUR OF THIS CHAPTER, OR AS OTHERWISE EXPRESSLY PERMITTED BY THE SUPERINTENDENT. ANY INTEREST EARNED OR CAPITAL GAIN REALIZED ON THE MONEY SO DEPOSITED OR INVESTED SHALL ACCRUE TO AND BECOME PART OF THE PLAN'S STATUTORY RESERVE FUND. (4) THE PLAN'S ASSETS, LIABILITIES, INCOME AND EXPENSES SHALL BE ACCOUNTED FOR SEPARATE AND APART FROM ALL OTHER ASSETS, LIABILITIES, INCOME AND EXPENSES OF THE FREELANCERS ASSOCIATION. THE ACCOUNTING FORS. 4526--B 5
THE PLAN'S STATUTORY RESERVE FUND SHALL SHOW: (A) THE PURPOSE, SOURCE, DATE AND AMOUNT OF EACH SUM PAID INTO THE FUND; (B) THE INTEREST EARNED BY SUCH FUND; (C) CAPITAL GAINS OR LOSSES RESULTING FROM THE SALE OF INVESTMENTS OF THE PLAN'S STATUTORY RESERVE FUND; (D) THE ORDER, PURPOSE, DATE AND AMOUNT OF EACH PAYMENT FROM THE STATUTORY RESERVE FUND; AND (E) THE ASSETS OF THE STATUTORY RESERVE FUND, INDICATING CASH BALANCE AND SCHEDULE OF INVESTMENTS. (5) THE REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVES SHALL BE CALCULATED USING STATUTORY ACCOUNTING PRACTICES AND PROCEDURES. ONLY THOSE EXPENSES THAT RELATE TO THE PLAN SHALL BE INCLUDED IN CALCULATING THE REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVE FUNDS. EXPENSES ALLO- CATED TO THE PLAN SHALL BE ALLOCATED ON AN EQUITABLE BASIS IN CONFORMITY WITH CUSTOMARY INSURANCE ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED. THE BOOKS, ACCOUNTS, AND RECORDS OF THE PLAN SHALL BE MAINTAINED AS TO CLEARLY AND ACCURATELY DISCLOSE THE NATURE AND DETAILS OF ALL EXPENSES SO AS TO SUPPORT THE REASONABLENESS OF SUCH EXPENSES. (I) (1) A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF THE PLAN'S FISCAL YEAR A REPORT THAT CONTAINS: (A) AN ANNUAL FINANCIAL STATEMENT, VERIFIED BY THE OATH OF AT LEAST TWO OF THE FREELANCERS ASSOCIATION'S PRINCIPAL OFFICERS, WITH DIRECT KNOWLEDGE OF THE OPERATIONS OF THE FREELANCERS HEALTH PLAN, SHOWING THE FINANCIAL CONDITION AND AFFAIRS OF THE PLAN DURING THE MOST RECENT FISCAL YEAR, IN ACCORDANCE WITH LAW AND STATUTORY PRACTICES AND PROCE- DURES AS ADOPTED BY THE SUPERINTENDENT, IN A FORM PRESCRIBED BY THE SUPERINTENDENT; (B) THE IDENTITY OF THE QUALIFIED ACTUARY UTILIZED BY THE FREELANCERS ASSOCIATION OR PLAN AND THE AMOUNT PAID TO THE QUALIFIED ACTUARY BY THE FREELANCERS ASSOCIATION OR PLAN DURING ITS MOST RECENT FISCAL YEAR; (C) THE IDENTITIES OF THE PLAN'S TEN LARGEST VENDORS BY PAYMENT AMOUNT DURING ITS MOST RECENT FISCAL YEAR; (D) THE NAME AND CONTACT INFORMATION OF THE PERSON OR ENTITY APPOINTED BY THE FREELANCERS ASSOCIATION TO ADMINISTER THE FREELANCERS HEALTH PLAN; (E) A PRO-FORMA STATEMENT OF PROJECTED REVENUE AND EXPENSES FOR HEALTH BENEFITS ANTICIPATED BY THE PLAN FOR THE NEXT TWELVE-MONTH PERIOD OF THE PLAN'S OPERATION, PROVIDED ON A FISCAL YEAR; (F) A DETAILED REPORT OF THE OPERATIONS AND CONDITION OF THE PLAN'S RESERVE FUNDS; AND (G) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE. (2) A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT WITH- IN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF ITS FREELANCERS HEALTH PLAN'S FISCAL YEAR THE MOST RECENT CERTIFIED, INDEPENDENTLY AUDITED FINANCIAL STATEMENT FOR THE FREELANCERS ASSOCIATION. THE STATEMENT SHALL INCLUDE AN OPINION OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. THE NOTES TO THE FINANCIAL STATEMENT SHALL SHOW THE FINANCIAL RESULTS OF THE FREE- LANCERS HEALTH PLAN OPERATIONS AND A DESCRIPTION AS TO HOW THE FREELANC- ERS ASSOCIATION MEETS THE RESERVE REQUIREMENTS IN PARAGRAPH ONE OF SUBSECTION (H) OF THIS SECTION, INCLUDING THE AMOUNTS REPORTED FOR EACH OF THE RESERVES, THE METHOD USED TO CALCULATE THE RESERVES, AND THE CHANGE IN THE RESERVES FROM THE BEGINNING OF THE PLAN'S FISCAL YEAR TO THE END OF THE PLAN'S FISCAL YEAR. IN ADDITION, THE NOTES TO FINANCIAL STATEMENT SHALL DETAIL THE ASSETS COMPRISING THE STATUTORY RESERVE FUND TO DEMONSTRATE COMPLIANCE WITH PARAGRAPH ONE OF SUBSECTION (H) OF THIS SECTION.S. 4526--B 6
(3) A FREELANCERS ASSOCIATION SHALL FILE A REPORT WITH THE SUPERINTEN- DENT EACH QUARTER, WITHIN FORTY-FIVE DAYS AFTER QUARTER CLOSE, DESCRIB- ING THE PLAN'S CURRENT FINANCIAL STATUS AND PROVIDING SUCH INFORMATION AS THE SUPERINTENDENT MAY PRESCRIBE. (4) A FREELANCERS ASSOCIATION THAT FAILS TO FILE ANY REPORT OR STATE- MENT REQUIRED BY THIS CHAPTER, OR FAILS TO REPLY WITHIN THIRTY DAYS TO A WRITTEN INQUIRY BY THE SUPERINTENDENT IN CONNECTION THEREWITH SHALL, IN ADDITION TO OTHER PENALTIES PROVIDED BY THIS CHAPTER, BE SUBJECT, UPON NOTICE AN OPPORTUNITY TO BE HEARD, TO A PENALTY OF UP TO ONE THOUSAND DOLLARS PER DAY OF DELAY, NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS IN THE AGGREGATE, FOR EACH SUCH FAILURE. (J) THE SUPERINTENDENT MAY, PURSUANT TO SECTIONS THREE HUNDRED NINE, THREE HUNDRED TEN, THREE HUNDRED ELEVEN, AND THREE HUNDRED TWELVE OF THIS CHAPTER, AND PURSUANT TO THE FINANCIAL SERVICES LAW, MAKE AN EXAM- INATION INTO THE AFFAIRS OF ANY FREELANCERS ASSOCIATION WITH REGARD TO A FREELANCERS HEALTH PLAN ISSUED BY THE FREELANCERS ASSOCIATION, AS OFTEN AS THE SUPERINTENDENT DEEMS IT EXPEDIENT FOR THE PROTECTION OF THE INTERESTS OF THE PEOPLE OF THIS STATE. THE EXPENSES OF EVERY EXAMINA- TION OF THE AFFAIRS OF THE FREELANCERS ASSOCIATION, WITH REGARD TO A FREELANCERS HEALTH PLAN ESTABLISHED OR MAINTAINED BY THE FREELANCERS ASSOCIATION, SHALL BE BORNE AND PAID FOR BY THE FREELANCERS ASSOCIATION SO EXAMINED. THE EXPENSES OF EXAMINATION SHALL INCLUDE REIMBURSEMENT FOR THE COMPENSATION PAID FOR SERVICES OF PERSONS EMPLOYED BY THE SUPER- INTENDENT OR BY THE SUPERINTENDENT'S AUTHORITY TO MAKE SUCH EXAMINATION, AND FOR THE NECESSARY TRAVELING AND LIVING EXPENSES OF THE PERSON OR PERSONS MAKING THE EXAMINATION. (K)(1) THE SUPERINTENDENT MAY SUSPEND OR REVOKE A DEMONSTRATION PROGRAM WAIVER ISSUED TO A FREELANCERS ASSOCIATION IF THE SUPERINTENDENT FINDS, AFTER NOTICE AND HEARING, THAT THE FREELANCERS ASSOCIATION HAS FAILED TO COMPLY WITH ANY REQUIREMENT IMPOSED ON IT BY THE PROVISIONS OF THIS CHAPTER AND IF IN THE SUPERINTENDENT'S JUDGMENT SUCH SUSPENSION OR REVOCATION IS REASONABLY NECESSARY TO PROTECT THE INTERESTS OF THE PEOPLE OF THIS STATE, INCLUDING: (A) FOR ANY CAUSE THAT WOULD BE A BASIS FOR DENIAL OF AN INITIAL APPLICATION FOR A DEMONSTRATION PROGRAM WAIVER; (B) FAILURE TO MAINTAIN THE RESERVES REQUIRED BY SUBSECTION (H) OF THIS SECTION; OR (C) A DETERMINATION BY THE SUPERINTENDENT THAT THE FREELANCERS ASSOCI- ATION HAS REFUSED TO PRODUCE ITS ACCOUNTS, RECORDS, AND FILES FOR EXAM- INATION OR HAS REFUSED TO COOPERATE OR GIVE INFORMATION WITH RESPECT TO THE AFFAIRS OF THE FREELANCERS HEALTH PLAN OR TO PERFORM ANY OTHER LEGAL OBLIGATION RELATING TO SUCH AN EXAMINATION WHEN REQUIRED BY THE SUPER- INTENDENT. (2) ANY DEMONSTRATION PROGRAM WAIVER SUSPENDED OR REVOKED UNDER THIS SUBSECTION SHALL BE SURRENDERED TO THE SUPERINTENDENT, AND THE FREELANC- ERS ASSOCIATION SHALL NOTIFY ALL MEMBERS OF THAT DECISION IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE, BUT NOT LATER THAN TEN DAYS AFTER RECEIPT OF NOTICE OF THE SUPERINTENDENT'S DECISION REQUIRING SUSPENSION OR REVOCATION. IN ADDITION, THE FREELANCERS ASSOCIATION SHALL SUBMIT A PLAN FOR THE SUPERINTENDENT'S APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT OF ALL BENEFITS, IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE. (3) NOTWITHSTANDING SUBDIVISION TWO OF SECTION EIGHTY-SEVEN OF THE PUBLIC OFFICERS LAW, ALL FINAL DECISIONS TO SUSPEND OR REVOKE THE DEMON-S. 4526--B 7
STRATION PROGRAM WAIVER WITH REGARD TO A FREELANCERS HEALTH PLAN SHALL BE PUBLIC. (L) IN ANY CASE IN WHICH A FREELANCERS ASSOCIATION DETERMINES THAT THERE IS A REASON TO BELIEVE THAT THE FREELANCERS HEALTH PLAN WILL TERMINATE, THE FREELANCERS ASSOCIATION SHALL SO INFORM THE SUPERINTEN- DENT AT LEAST SIXTY DAYS PRIOR THERETO, AND SHALL FILE A SWORN STATEMENT WITH THE SUPERINTENDENT CONCERNING ALL CURRENT AND FUTURE LIABILITIES UNDER ITS DISCONTINUED PLAN. THE FREELANCERS ASSOCIATION SHALL SUBMIT A PLAN FOR THE SUPERINTENDENT'S APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT OF ALL BENE- FITS, IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE. (M) NO PART OF ANY FUNDS OF THE FREELANCERS ASSOCIATION, AS THEY PERTAIN TO THE FREELANCERS HEALTH PLAN, SHALL BE SUBJECT TO THE CLAIMS OF GENERAL CREDITORS OF THE FREELANCERS ASSOCIATION UNTIL ALL PLAN BENE- FITS AND OTHER PLAN OBLIGATIONS HAVE BEEN SATISFIED. UNTIL SUCH TIME, THE FREELANCERS ASSOCIATION SHALL CONTINUE TO MAINTAIN AND FUND THE RESERVE FUNDS REQUIRED TO BE ESTABLISHED UNDER SUBSECTION (H) OF THIS SECTION. IF AT ANY TIME THE SUPERINTENDENT DETERMINES THAT ADDITIONAL FUNDS SHALL BE DEPOSITED IN THE RESERVE FUNDS, THEN THE FREELANCERS ASSOCIATION SHALL MAKE THE DEPOSIT WITHIN THIRTY DAYS OF THE SUPERINTEN- DENT'S DETERMINATION. (N) A FREELANCERS ASSOCIATION THAT RECEIVES A DEMONSTRATION PROGRAM WAIVER UNDER THIS SECTION SHALL SUBMIT PERIODIC REPORTS TO THE SUPER- INTENDENT SUFFICIENT TO ENABLE THE SUPERINTENDENT TO EVALUATE THE EFFEC- TIVENESS OF THE DEMONSTRATION PROGRAM. SUCH REPORTS SHALL INCLUDE A COMPARISON OF THE COST OF BENEFITS OBTAINED UNDER THE PROGRAM TO OTHER AVAILABLE INSURANCE OPTIONS AND ANY OTHER INFORMATION REQUIRED BY THE SUPERINTENDENT. (O) A FREELANCERS ASSOCIATION SHALL NOT ISSUE A STOP-LOSS INSURANCE POLICY. (P) A FREELANCERS HEALTH PLAN SHALL PROVIDE BENEFITS ONLY TO INDEPEND- ENT WORKERS WHO ARE MEMBERS OF THE FREELANCERS ASSOCIATION SPONSORING THE PLAN AND SUCH MEMBERS' SPOUSES, CHILDREN AND ALL OTHER PERSONS CHIEFLY DEPENDENT UPON THE MEMBERS FOR SUPPORT AND MAINTENANCE; PROVIDED, HOWEVER, A FREELANCERS HEALTH PLAN SHALL NOT ESTABLISH RULES OF ELIGIBILITY, INCLUDING CONTINUED ELIGIBILITY, OF ANY INDIVIDUAL OR DEPENDENT OF THE INDIVIDUAL BASED ON ANY OF THE FOLLOWING FACTORS: (1) HEALTH STATUS; (2) MEDICAL CONDITION; (3) CLAIMS EXPERIENCE; (4) RECEIPT OF HEALTH CARE; (5) MEDICAL HISTORY; (6) GENETIC INFORMATION; (7) EVIDENCE OF INSURABILITY, INCLUDING CONDITIONS ARISING OUT OF ACTS OF DOMESTIC VIOLENCE; OR (8) DISABILITY. (Q) THE SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS THE SUPER- INTENDENT DEEMS NECESSARY TO IMPLEMENT THE PROVISIONS OF THIS SECTION AND TO ENSURE THAT THE PLANS ESTABLISHED UNDER THIS SECTION ARE IN THE BEST INTERESTS OF MEMBERS OF THE FREELANCERS ASSOCIATION AND THE MEMBER'S SPOUSE, CHILDREN AND OTHER PERSONS CHIEFLY DEPENDENT UPON THE MEMBERS FOR SUPPORT AND MAINTENANCE. (R) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, ANY FREELANCERS ASSOCIATION THAT VIOLATES THIS SECTION SHALL BE SUBJECT TO THE PENALTIES SET FORTH IN SECTION ONE HUNDRED NINE OF THIS CHAPTER.S. 4526--B 8
(S) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION, ANY ACTIVITIES THAT MAY OR MUST BE CARRIED OUT BY A FREELANCERS ASSOCIATION UNDER THIS SECTION MAY BE CARRIED OUT ON BEHALF OF THE FREELANCERS ASSO- CIATION BY ANOTHER ENTITY WHOLLY OWNED OR CONTROLLED BY THE FREELANCERS ASSOCIATION, PROVIDED THAT ANY ACTIVITIES CARRIED OUT ON BEHALF OF THE FREELANCERS ASSOCIATION BY ANOTHER ENTITY WHOLLY OWNED OR CONTROLLED BY THE FREELANCERS ASSOCIATION SHALL BE SUBJECT TO ALL PROVISIONS OF THIS SECTION. S 2. Subsections (b) and (c) of section 4237-a of the insurance law, as amended by chapter 246 of the laws of 2012, are amended to read as follows: (b) "Stop-loss insurance" means an insurance policy whereby the insur- er agrees to pay claims or indemnify an employer for losses incurred under a self-insured employee benefit plan or a student health plan as authorized by section one thousand one hundred twenty-four of this chap- ter, OR THE FREELANCERS HEALTH PLAN DEMONSTRATION PROGRAM AS AUTHORIZED BY SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE OF THIS CHAPTER, in excess of specified loss limits for individual claims and/or for all claims combined, or any similar arrangement. (c) A stop-loss insurance policy delivered, issued for delivery, or entered into in this state shall clearly describe: (1) the entire money or other consideration for the policy; (2) the time at which the insurance takes effect and terminates; (3) the specified per-claim, per-employee or, in the case of a student health plan under section one thousand one hundred twenty-four of this chapter, per student, OR IN THE CASE OF THE FREELANCERS HEALTH PLAN DEMONSTRATION PROGRAM UNDER SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE OF THIS CHAPTER, PER MEMBER, or aggregate amount of claims above which payment or reimbursement is to be made by the insurer; and (4) the payments to be made by the insurer once the specified stop- loss thresholds have been exceeded. S 3. Subsection (k) of section 1108 of the insurance law, as added by chapter 246 of the laws of 2012, is relettered subsection (l) and a new subsection (m) is added to read as follows: (M) A FREELANCERS ASSOCIATION, AS DEFINED IN SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE OF THIS ARTICLE, THAT OBTAINS AND MAINTAINS A DEMON- STRATION PROGRAM WAIVER FROM THE SUPERINTENDENT AND COMPLIES WITH THE REQUIREMENTS OF SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE OF THIS ARTICLE, TO THE EXTENT THEREIN STATED. S 4. This act shall take effect immediately and shall expire and be deemed repealed December 31, 2014.