State RegulationsNY specificDifficulty 2/5
A trade association whose member businesses vary in size asks about obtaining small-group health coverage for its members in New York. How does the small-group definition apply to association coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under the New York Insurance Law and the Department of Financial Services' small-group rules, when accident and health coverage is provided through an association, eligibility is tested member group by member group: each association member group counts as a small group only if it employs no more than 50 employees. This group-by-group test prevents large employers from qualifying for the community-rated small-group market merely by joining an association.
Why the other options are wrong
- B) Association membership does not waive the size limit; every member group must independently satisfy the small-group employee ceiling.
- C) Associations are not shut out of the small-group market; member groups that meet the size test may participate through the association.
- D) The employee test is applied to each member group, not to the association's aggregate headcount across all members.
Memory hook
Association coverage counts heads member by member: each group must stay at 50 or fewer employees.