Relates to pre-existing condition provisions for group and blanket disability policies which excludes coverage under the policy for a disability commencing during the twelve months following the effective date of coverage for the covered person.

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S2557-2011 Actions

• Feb 29, 2012: referred to insurance
• Feb 29, 2012: DELIVERED TO ASSEMBLY
• Feb 29, 2012: PASSED SENATE
• Feb 6, 2012: ADVANCED TO THIRD READING
• Jan 31, 2012: 2ND REPORT CAL.
• Jan 30, 2012: 1ST REPORT CAL.132
• Jan 4, 2012: REFERRED TO INSURANCE
• Jan 4, 2012: returned to senate
• Jan 4, 2012: died in assembly
• Jun 7, 2011: referred to insurance
• Jun 7, 2011: DELIVERED TO ASSEMBLY
• Jun 7, 2011: PASSED SENATE
• Apr 6, 2011: ADVANCED TO THIRD READING
• Apr 5, 2011: 2ND REPORT CAL.
• Apr 4, 2011: 1ST REPORT CAL.231
• Jan 25, 2011: REFERRED TO INSURANCE

S2557-2011 Meetings

Insurance: Jan 30, 2012, Insurance: Apr 4, 2011

S2557-2011 Calendars

Active List: Feb 29, 2012 , Active List: Jun 7, 2011 , Floor Calendar: Jan 31, 2012 , Floor Calendar: Feb 6, 2012 , Floor Calendar: Feb 7, 2012 , Floor Calendar: Feb 13, 2012 , Floor Calendar: Feb 14, 2012 , Floor Calendar: Feb 15, 2012 , Floor Calendar: Feb 29, 2012 , Floor Calendar: Apr 5, 2011 , Floor Calendar: Apr 6, 2011 , Floor Calendar: Apr 11, 2011 , Floor Calendar: Apr 12, 2011 , Floor Calendar: Apr 13, 2011 , Floor Calendar: May 2, 2011 , Floor Calendar: May 3, 2011 , Floor Calendar: May 4, 2011 , Floor Calendar: May 9, 2011 , Floor Calendar: May 10, 2011 , Floor Calendar: May 11, 2011 , Floor Calendar: May 16, 2011 , Floor Calendar: May 17, 2011 , Floor Calendar: May 18, 2011 , Floor Calendar: May 23, 2011 , Floor Calendar: May 24, 2011 , Floor Calendar: May 25, 2011 , Floor Calendar: Jun 1, 2011 , Floor Calendar: Jun 2, 2011 , Floor Calendar: Jun 6, 2011 , Floor Calendar: Jun 7, 2011

S2557-2011 Votes

S2557-2011 Memo

BILL NUMBER:S2557

TITLE OF BILL:

An act
to amend the insurance law, in relation to pre-existing condition
provisions for group and blanket disability policies

PURPOSE OR GENERAL IDEA OF BILL:

This bill would amend �3234 of the insurance law to require disability
income insurers to make available to employers who purchase group or
blanket disability insurance the option of a contract with a
pre-existing condition exclusion provision. This bill would require
insurers to offer employers a group disability contract with a
provision that establishes that a pre-existing condition that occurs
prior to an employee's effective date of coverage, and results in the
disability of that employee within the first twelve months after the
effective date of coverage, would be excluded from coverage. Insurers
would also be required to offer to employers a contract that would
limit but not exclude disability coverage for pre-existing conditions.
Employers could choose which of these options they want in their
contract.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends �3234 of the insurance law by adding a
new subsection (b) to require that insurers must make available to
employers a pre-existing condition exclusion provision in all group
and blanket disability contracts being offered. Such exclusion would
provide that a pre-existing condition that occurs prior to an
employee's effective date of coverage, and results in the disability
of that employee within the first twelve months after the effective
date of coverage, would be excluded from coverage for loss of income.
Section 1 also re-letters current subsection (b) as new subsection
(c) and makes conforming changes to the new subsection.

JUSTIFICATION:

Due to a recent Court of Appeals decision (Benesowitz v. Metropolitan
Life Insurance Company, 8 NY3d 661 2007)
which reinterpreted �3234
(a) (2) of the insurance law, insurers and businesses in New York
were required to revise what was previously considered to be a
preexisting condition exclusion provision in group disability income
insurance contracts and instead apply it as a limitation on coverage
only for up to twelve months following the employee's effective date
of coverage. As a result, employees who become disabled due to a
pre-existing condition are no longer excluded from coverage for the
life of that claim. This decision permits some seriously ill
employees to obtain coverage and then almost immediately file a claim

and will result, in some cases, in an increase in the premiums
charged for group disability income policies in New York. These
increased rates would be for a type of coverage that can already be
quite costly for businesses/employees to afford and any increase in
rates might preclude this coverage from being purchased or continued
altogether.

Giving employers the choice of which option to purchase will result in
more New Yorkers being offered disability coverage. Those companies
that can afford the more expensive benefit could elect to provide
that, whereas those who cannot can purchase the contract with the
less expensive benefit option.

PRIOR LEGISLATIVE HISTORY:

S.4770 of 2009-10

FISCAL IMPLICATIONS:

None to the State.

EFFECTIVE DATE:

Immediately.

S2557-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    2557

                         2011-2012 Regular Sessions

                              I N  SENATE

                              January 25, 2011
                                 ___________

  Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
    printed to be committed to the Committee on Insurance

  AN ACT to amend the insurance law, in relation to pre-existing condition
    provisions for group and blanket disability policies

    THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section  1.  Subsection  (b)  of section 3234 of the insurance law, as
  added by chapter 650 of the laws of 1993, is amended to read as follows:

    (b)  AN INSURER THAT OFFERS A POLICY IN CONFORMANCE WITH PARAGRAPH TWO
  OF SUBSECTION (A) OF THIS SECTION  MUST  ALSO  MAKE  AVAILABLE,  AND  IF
  REQUESTED  BY THE POLICYHOLDER, PROVIDE A GROUP OR BLANKET POLICY WITH A
  PRE-EXISTING CONDITION PROVISION WHICH EXCLUDES COVERAGE UNDER THE POLI-
  CY FOR A DISABILITY COMMENCING DURING THE TWELVE  MONTHS  FOLLOWING  THE
  EFFECTIVE DATE OF COVERAGE FOR THE COVERED PERSON.
    (C) Nothing [herein] IN THIS SECTION shall be construed to prohibit or
  restrict  an  insurer from utilizing other forms of underwriting for the
  members of the group in lieu of, or in  addition  to,  the  pre-existing
  condition provision described in subsection (a) OR (B) of this section.
    S 2. This act shall take effect immediately.





   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD05425-01-1