Sec. 360.3. Eligibility for individual and small group health insurance policies

(a) No insurer may restrict or limit eligibility for individual or small group policies except in the following ways:

(1) Insurers may issue policies only to or through groups recognized under sections 4235(c)(1)(A), (B), (D), (H), (K), (L) and (M) and 4237 of the Insurance Law.

(i) Small group health insurance policies may be issued to cover only certain classes of employees as provided in section 4235(c)(1)(A) based upon conditions pertaining to employment, but only if the employer requesting coverage seeks coverage for only such classes.

(ii) Minimum participation requirements as set forth in section 4235(c)(1) must continue to be utilized. Health maintenance organizations may not establish any minimum participation requirements within a group and must accept one person within a small group who elects the HMO coverage.

(2) An employer's required time period of employment before coverage under the employer's plan takes effect.

(3) A required number of work hours to qualify as an employee, not to exceed 20 hours per week.

(4) Geographical limitations as set forth in the premium rate filing and approved by the superintendent. However, limited geographic offerings of a policy in relation to the operating areas of the insurer may be disapproved by the superintendent. For example, an insurer offering small group policies throughout the State could offer a new small group policy only in the downstate region, but that insurer could not offer that policy only in one downstate county. In the case of HMOs and other managed care products with limited provider networks, the offering of the policy may be limited to the geographical area in which the provider network is located.

(5) Overinsurance rules filed with the Health and Life Policy Bureau and approved by the superintendent subsequent to the adoption of this regulation for applicants actually covered under the same or other group or individual policies.

(6) Where licensed health maintenance organizations and licensed insurers offering plans with a limited provider network have applied to the superintendent and been granted a temporary waiver of the requirement for open enrollment found in sections 3231 and 4317 of the Insurance Law upon a showing that the existing provider network is unable to provide adequate care to additional covered persons whether applying as individuals, members of small groups or members of large groups and it is not reasonably possible to expand the network to allow enrollment of any of these additional applicants. The superintendent shall review such request in consultation with the Commissioner of Health, giving consideration as to whether the request for a waiver is designed to avoid the enrollment of individuals or small groups. Applications for such waivers shall include a plan for management of membership growth and expansion of capacity, including a demonstration that all market segments are being served in a balanced fashion. Any approval of such requests will be subject to periodic updates in a frequency to be determined by the superintendent to ensure that conditions giving rise to the request continue to exist and that reasonable efforts to adjust the provider network continue to be made.

(7) Issuance of policies of Medicare supplement insurance may be conditioned upon the enrollment of the applicant in both Part A and Part B of Medicare.

(8) Where a small group offers more than one health care plan to its employees or members, rules may be established controlling the transfer between the health care plans so long as transfer is permitted no less than once each calendar year.

(9) Where an eligible employee or member or dependent or spouse of such employee or member rejects initial enrollment in a group or blanket policy that provides hospital, surgical or medical expense insurance, rules may be established limiting future enrollment to specified time periods, however, such rules shall not apply to such employee, member, dependent or spouse if:

(i) the individual was covered under another plan or policy at the time the individual was initially eligible to enroll and has lost coverage under the other plan or policy as a result of exhaustion of the period of continuation under State or Federal law; the loss of eligibility for one or more of the reasons specified in section 3221(q)(5)(B)(ii) or 4305(k)(5)(B)(ii) of the Insurance Law; or termination by the plan sponsor or policyholder of contributions toward the payment of premium for the other plan or policy, provided the individual applies for enrollment within 30 days after termination of coverage provided under the other plan or policy;

(ii) a court has ordered coverage be provided for a spouse or minor children under a covered employee or member's health benefit plan and the request for enrollment is made within 30 days after issuance of the court order; or

(iii) any Federal or State law requires that coverage be provided under the policy without regard to the enrollment period specified in the policy, provided the individual applies for enrollment within 30 days after the occurrence of the event triggering the right to enroll or within any time period specified in the law requiring the coverage, whichever is longer.

(10) An insurer may limit changes in coverage initiated by an individual or small group, either by changing policies or adding or deleting riders, to an anniversary date or other regular interval, so long as the interval is every 12 months or less.

(11) A rule limiting eligibility where an individual or small group has had health insurance coverage terminated within the previous 12 months for failure to pay premiums.