Sec. 360.8. Group health insurance policies issued to association groups

(a) Rules relating to an association group written pursuant to subparagraphs (B) and (K) of paragraph (1) of subsection (c) of section 4235 of the Insurance Law having its own community rate.

(1) At the insurer's option, the community rate may be based upon the collective experience of only one association group so long as the following requirements are met:

(i) the group policy issued to the association group must have been validly issued pursuant to section 4235(c)(1)(B) or (K) of the Insurance Law;

(ii) the association group policy must cover at least 10,000 persons, including spouses and dependents, in New York State;

(iii) the association group must include members from diverse and unrelated industries or occupations; provided, however, that this subparagraph shall not apply to any association group insuring 20,000 or more persons, including spouses and dependents, in New York State, which was established prior to December 31, 1991; and

(iv) the policy issued to the association group with its own community rate is also offered on an open enrollment basis to any other association or small group.

(2) Once an association group has been community-rated on the basis of its collective experience, an insurer shall not permit it to become community-rated on the basis of a broader community-rated pool if the claims experience of the association group community-rated on its own collective experience is worse than the claims experience of the broader community pool. This requirement applies to replacement insurers as well as the insurer which initially community-rated the association group. Actual claims experience from the previous calendar year of the association group and the broader community pool will be compared for purposes of this provision.

(b) Rules relating to insurers enrolling individuals and small groups through association groups.

(1) For the purposes of this Part, insurers may issue small group health insurance policies in New York State only to or through groups specifically recognized as groups under subparagraphs (B), (D), (H), (K), (L) and (M) of paragraph (1) of subsection (c) of section 4235 of the Insurance Law. Where there is no statutory authority recognizing the group, insurers should issue individual health insurance policies in New York State.

(2) Insurers shall not issue policies with their own community rate to professional or occupational associations because they fail to meet the requirements of subparagraph (a)(1)(iii) of this section. Insurers may, however, issue policies to eligible group members of professional or occupational associations so long as any group (not just professional or occupational) can obtain the policy and the policy is community-rated based upon the experience of the entire pool of risks covered by that policy without regard to age, sex, health status or occupation.

(3) Insurers may not refuse to accept any individual or small group on the basis that coverage through an association group is available as an alternative to the individual or small group.

(4) An insurer may not limit its participation in the small group market to policies issued to association groups. If an insurer issues policies to association groups such an insurer must also offer such policies on an open enrollment basis to any small group applying for such coverage.

(5) An insurer may limit its participation in the small group market to policies issued to or through groups other than association groups.

(c) Rules preventing insurers from using underwriting or benefiting from information obtained from other sources including an association.

(1) Insurers may not use underwriting information obtained from any source to underwrite the issuance of health insurance to association groups and persons seeking health insurance through association groups if the information to be used in underwriting would be prohibited if obtained directly by the insurer in an underwriting review, application process or similar procedure.

(2) An insurer shall refuse to issue a policy to or through any association group if the association group or anyone acting on its behalf has performed underwriting reviews of those seeking health insurance through the association group. Underwriting reviews by the association group or anyone acting on its behalf means any method of screening persons seeking health insurance from the association group whether the screening technique is direct or indirect.

(3) Underwriting information, underwriting review, underwriting, screening and words of similar import shall include but not be limited to prohibited practices such as lists of excluded industries, occupations or professions, use of medical or laboratory tests, medical examinations, attending physician statements, questionnaires or any investigations or reviews regarding health status or health history or any type of different membership or status in an association group due to health problems, disabilities, age, sex or occupation.

(d) Community-rating and open enrollment of group members residing in New York State who are covered under group policies delivered to a group trust outside of New York State.

(1) Group hospital and/or medical coverage, including Medicare supplemental insurance, obtained through an out-of-state trust covering a group of 50 or fewer employees or participating persons who are residents of New York State must be community-rated and open enrolled in New York State. These requirements apply to all out-of-state trusts whether or not the certificates of coverage under such trusts are deemed to be delivered in New York State under section 3201 of the Insurance Law. The insurer using an out-of-state trust mechanism which covers residents of New York State as stated in the foregoing paragraph may not have its own community rate and the coverage of the New York State residents must be written on a policy available to other New York State groups of 50 or fewer employees or participating persons and must be offered at the community rate for that policy.

(2) If the requirements of open enrollment and community rating cannot be met because the policy form offered through the out-of-state trust is not available to other New York State groups of 50 or fewer employees or participating persons then such out-of-state trust coverage may not cover New York State residents because of the inability of the insurer to comply with the open enrollment and community rating requirements.

(e) Community rates based on the size of the association groups.

(1) A policy issued to an association group covering at least one participating group member with 50 or fewer employees or members exclusive of spouses and dependents requires the insurer to charge the same community rate to all association members.

(2) An insurer may issue an experience rated policy to an association group so long as all member employers or member groups covered by that policy exceed 50 persons exclusive of spouses and dependents. A second separate community-rated policy may be issued by an insurer to the same association group covering all those member employers or member groups with 50 or fewer persons exclusive of spouses and dependents.

(f) Rules relating to the imposition of pre-existing condition limitations in association group cases.

(1) An insurer issuing a policy to an association which is subject to the provisions of sections 3231 and 4317 of the Insurance Law must also comply with the provisions of sections 3232 and 4318 of the Insurance Law.