Creates exceptions to the general prohibition on rebating.
Ayes (56): Addabbo, Avella, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Johnson, Kennedy, Klein, Krueger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Montgomery, Nozzolio, Oppenheimer, Parker, Peralta, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Storobin, Valesky, Young, Zeldin
Excused (6): Adams, Alesi, Espaillat, Huntley, O'Mara, Perkins
TITLE OF BILL: An act to amend the insurance law, in relation to exceptions to the general prohibition on rebating
PURPOSE: To modernize the insurance law to allow licensed brokers, agents and benefit consultants to assist insurers and employers in the interpretation, management and communication of the insurance policy or annuity contract and its resulting costs, and to assist insurers and employers in the development and implementation of wellness programs, disease management and care coordination services and other incidental or ancillary programs and services.
SUMMARY OF PROVISIONS: Section 1 of the bill would add a new subsection (d) to º3239 of the insurance law, to enumerate certain exceptions to the anti-rebating and inducement laws for services that insurance producers may provide within the scope of their licensure and as part of commissions paid or fees earned, to insurance carriers and policyholders, such as the development and implementation of wellness programs, disease management and care coordination services and other programs designed to improve quality of care and health outcomes of insured employees, subscribers or enrollees.
Section 2 of the bill would add a new subsection (f) to º4224 of the insurance law, to allow insurance producers, within the scope of their licensure and as part of commissions paid or fees earned, to provide certain services to assist insurers and policyholders in the interpretation, management and communication of insurance policies or annuity contracts and their costs, as well as the development and implementation of wellness programs, disease management and care coordination services, administration of COBRA and New York State continuation of coverage benefits, administration of flexible spending accounts (FSAs) and health reimbursement or savings accounts (HSAs), clinical health advocacy services, including employee, subscriber or enrollee communications, hotlines, "help desks," and web site development, preparation of annual benefit statements, maintenance of membership records, premium reconciliation and billing services, including retiree billing, compliance support, including completion of ERISA form 5500, and financial modeling.
Section 3 of the bill would provide for an immediate effective date.
JUSTIFICATION: The fast-paced and competitive insurance marketplace continues to evolve, and insurance producers must change with it. Integral to this is the modernization of certain statutory restrictions that are old and outmoded. Chief amongst these are the anti-rebating and inducement laws that were originally designed to protect insurance producers and consumers alike from offering and accepting illegal inducements for the sale of insurance products. In today's sophisticated health insurance market, licensed insurance brokers, agents and benefits consultants must be able to offer a full
value-added services platform, such as providing benefits concierge, employee communications, benefits web sites and help desks, benefits statements, compliance support, in order to attract business and close the sale. Employer groups of all sizes are increasingly looking not only for traditional advice in selecting health plan benefits design and coverage options, underwriting to reduce claims losses, and claims servicing and policyholder advocacy, but are also demanding back-office human resources support.
The statutory exceptions and allowances prescribed in this bill would modernize the insurance law with respect to health insurance, and allow insurance producers to keep abreast of the market by lawfully providing such services within the scope of their licensure and practice and as part of commissions paid or fees earned.
Moreover, this bill would codify many of the incidental services excepted from the insurance anti-rebating and inducement laws listed in NYS Insurance Department Circular Letter No.9 (2009) http://www.ins.state.ny.us/circltr/2009/c109_09.htm
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 4950 2011-2012 Regular Sessions IN SENATE May 2, 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 exceptions to the general prohibition on rebating THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 3239 of the insurance law is amended by adding a new subsection (d) to read as follows: (D) AN INSURANCE AGENT, INSURANCE BROKER OR INSURANCE CONSULTANT LICENSED UNDER ARTICLE TWENTY-ONE OF THIS CHAPTER, WHILE ACTING WITHIN THE SCOPE OF SUCH LICENSURE AND AS PART OF COMMISSIONS PAID OR UNDER SEPARATE FEE AGREEMENTS, SHALL BE AUTHORIZED TO ASSIST INSURERS AND EMPLOYERS IN THE DEVELOPMENT AND IMPLEMENTATION OF WELLNESS PROGRAMS, DISEASE MANAGEMENT AND CARE COORDINATION SERVICES, AND OTHER SUCH PROGRAMS AND SERVICES DESIGNED TO IMPROVE QUALITY OF CARE AND HEALTH OUTCOMES OF INSURED EMPLOYEES, SUBSCRIBERS OR ENROLLEES, BASED ON ACTU- ARIAL DEMONSTRATIONS THAT SUCH PROGRAMS AND SERVICES CAN BE REASONABLY EXPECTED TO RESULT IN THE OVERALL GOOD HEALTH AND WELL BEING OF THE GROUP. S 2. Section 4224 of the insurance law is amended by adding a new subsection (f) to read as follows: (F) THIS SECTION SHALL NOT PROHIBIT AN INSURANCE AGENT, INSURANCE BROKER OR INSURANCE CONSULTANT LICENSED UNDER ARTICLE TWENTY-ONE OF THIS CHAPTER, WHILE ACTING WITHIN THE SCOPE OF SUCH LICENSURE AND AS PART OF COMMISSIONS PAID OR UNDER SEPARATE FEE AGREEMENTS, FROM ASSISTING INSUR- ERS AND EMPLOYERS IN THE INTERPRETATION, MANAGEMENT AND COMMUNICATION OF THE INSURANCE POLICY OR ANNUITY CONTRACT AND ITS RESULTING COSTS. PERMISSIBLE SERVICES SHALL INCLUDE, BUT NOT BE LIMITED TO: WELLNESS PROGRAMS, DISEASE MANAGEMENT AND CARE COORDINATION SERVICES, ADMINIS- TRATION OF COBRA AND NEW YORK STATE CONTINUATION OF COVERAGE, ADMINIS- TRATION OF FLEXIBLE SPENDING ACCOUNTS (FSAS) AND HEALTH REIMBURSEMENTEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11006-01-1 S. 4950 2
ACCOUNTS (HSAS), CLINICAL HEALTH ADVOCACY SERVICES, INCLUDING EMPLOYEE, SUBSCRIBER OR ENROLLEE COMMUNICATIONS, HOTLINES, "HELP DESKS," AND WEB SITE DEVELOPMENT, PREPARATION OF ANNUAL BENEFIT STATEMENTS, MAINTENANCE OF MEMBERSHIP RECORDS, PREMIUM RECONCILIATION AND BILLING SERVICES, INCLUDING RETIREE BILLING, COMPLIANCE SUPPORT, INCLUDING COMPLETION OF ERISA FORM 5500, AND FINANCIAL MODELING. S 3. This act shall take effect immediately.