Bill S3464-2013

Relates to exempting certain health insurance policies from certain coverage requirements

Exempts policies intended for use in health savings account pursuant to section 1201 of the federal medicare prescription drug, improvement and modernization act of 2003 from certain coverage requirements.

Details

Actions

  • Jan 8, 2014: REFERRED TO INSURANCE
  • Feb 4, 2013: REFERRED TO INSURANCE

Memo

BILL NUMBER:S3464

TITLE OF BILL: An act to amend the insurance law, in relation to coverage requirements of certain health insurance plans

PURPOSE: The purpose of this legislation is to help individuals and businesses afford the skyrocketing cost of health insurance, by making it easier for them to purchase high-deductible health plans (HDHPs) that are coupled with health savings accounts (HSAs).

SUMMARY OF PROVISIONS: Sections 3216, 4304, and 4322 of the insurance law are amended to authorize HMOs and insurers to offer HDHPs coupled with HSAs. Such policies were created under the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003

EXISTING LAW: Current law prohibits HDHPs and HSAs from being offered by HMOs and in the individual market.

JUSTIFICATION: Individuals and employers are currently struggling with the skyrocketing cost of health insurance in New York. Inevitably, as health care costs increase, so do the number of uninsured in the state. There are already nearly 3 million New Yorkers without health insurance, and we can ill afford any more.

The federal Medicare reform law, signed in December of 2003, established HSAs which must be coupled with a HDHP that has at least a $1100 deductible for individuals and $2200 for family coverage. HDHPs offer regular medical coverage, but cost significantly less than traditional policies because of their higher deductibles HSAs provide the consumer with maximum choice and control over where their health care dollars are spent, by giving them a means to set aside funds to pay for out-of-pocket medical expenses Consumers, not their employer or insurance company, should determine how and where to spend their health care dollars. Authorization of such policies in New York would allow a range of coverage options and opportunities combined with funds from an HSA. The consumer would be assured protection from costly health risk and have access to funds to pay for care from any provider that is not covered by the policy.

HDHPs and HSAs are especially attractive to small businesses, as they allow employers to offer medical coverage to their employees at a price they can afford. Allowing more employees and individuals to purchase HDHPs and HSAs will allow for maximum choice and flexibility in designing a plan that meets their needs - both from a health care and a financial point of view.

LEGISLATIVE. HISTORY: S.2375 of 2011-12; S.3047 of 2009-10; S.2968 of 2007-08

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: January 1, 2014.


Text

STATE OF NEW YORK ________________________________________________________________________ 3464 2013-2014 Regular Sessions IN SENATE February 4, 2013 ___________
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 coverage requirements of certain health insurance plans THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (l) of section 3216 of the insurance law, as added by chapter 504 of the laws of 1995, is amended to read as follows: (l) On and after January first, nineteen hundred ninety-seven, no insurer shall offer major medical, comprehensive or other comparable individual contracts, other than for purposes of conversion, unless the benefits of such contracts, including deductibles and coinsurance, are identical to the out-of-plan benefits of the contracts described in section four thousand three hundred twenty-two of this chapter. Such contracts must include a prescription drug benefit complying with the requirements of that section. THE REQUIREMENTS OF THIS SUBSECTION SHALL NOT APPLY TO A POLICY INTENDED TO QUALIFY FOR USE IN A HEALTH SAVINGS ACCOUNT PURSUANT TO SECTION 1201 OF THE FEDERAL MEDICARE PRESCRIPTION DRUG, IMPROVEMENT AND MODERNIZATION ACT OF 2003. S 2. Subsection (l) of section 4304 of the insurance law, as added by chapter 504 of the laws of 1995, is amended to read as follows: (l) On and after January first, nineteen hundred ninety-seven, no insurer shall offer major medical, comprehensive or other comparable individual contracts on a direct payment basis, other than for purposes of conversion, unless the benefits of such contracts, including deduct- ibles and coinsurance, are identical to the out-of-plan benefits of the contracts described in section four thousand three hundred twenty-two of this article. Such contracts must include a prescription drug benefit complying with the requirements of such section. THE REQUIREMENTS OF THIS SUBSECTION SHALL NOT APPLY TO A POLICY INTENDED TO QUALIFY FOR USE
IN A HEALTH SAVINGS ACCOUNT PURSUANT TO SECTION 1201 OF THE FEDERAL MEDICARE PRESCRIPTION DRUG, IMPROVEMENT AND MODERNIZATION ACT OF 2003. S 3. Subsection (a) of section 4322 of the insurance law, as amended by chapter 342 of the laws of 2004, is amended to read as follows: (a) On and after January first, nineteen hundred ninety-six, all health maintenance organizations issued a certificate of authority under article forty-four of the public health law or licensed under this arti- cle shall offer to individuals, in addition to the standardized contract required by section four thousand three hundred twenty-one of this arti- cle, a standardized individual enrollee direct payment contract on an open enrollment basis as prescribed by section four thousand three hundred seventeen of this article and section four thousand four hundred six of the public health law, and regulations promulgated thereunder, with an out-of-plan benefit system, provided, however, that such requirements shall not apply to a health maintenance organization exclu- sively serving individuals enrolled pursuant to title eleven of article five of the social services law, title eleven-D of article five of the social services law, title one-A of article twenty-five of the public health law or title eighteen of the federal Social Security Act, and, further provided, that such health maintenance organization shall not discontinue a contract for an individual receiving comprehensive-type coverage in effect prior to January first, two thousand four who is ineligible to purchase policies offered after such date pursuant to this section [or section four thousand three hundred twenty-two of this arti- cle] due to the provision of 42 U.S.C. 1395ss in effect prior to January first, two thousand four. The out-of-plan benefit system shall either be provided by the health maintenance organization pursuant to subdivision two of section four thousand four hundred six of the public health law or through an accompanying insurance contract providing out-of-plan benefits offered by a company appropriately licensed pursuant to this chapter. On and after January first, nineteen hundred ninety-six, the contracts issued pursuant to this section and section four thousand three hundred twenty-one of this article shall be the only contracts offered by health maintenance organizations to individuals; PROVIDED, HOWEVER, THIS LIMITATION SHALL NOT APPLY TO ONE OR MORE POLICIES INTENDED TO QUALIFY FOR USE IN A HEALTH SAVINGS ACCOUNT PURSUANT TO SECTION 1201 OF THE FEDERAL MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003. The enrollee contracts issued by a health maintenance organization under this section and section four thousand three hundred twenty-one of this article shall also be the only contracts issued by the health maintenance organization for purposes of conversion pursuant to sections four thousand three hundred four and four thousand three hundred five of this article. However, nothing in this section shall be deemed to require health maintenance organizations to terminate individual direct payment contracts issued prior to January first, nineteen hundred ninety-six or prohibit health maintenance organ- izations from terminating individual direct payment contracts issued prior to January first, nineteen hundred ninety-six. S 4. This act shall take effect January 1, 2014.

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