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Insurance: May 21, 2012

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Active List: Jun 18, 2012 , Floor Calendar: May 22, 2012 , Floor Calendar: May 23, 2012 , Floor Calendar: May 30, 2012 , Floor Calendar: May 31, 2012 , Floor Calendar: Jun 4, 2012 , Floor Calendar: Jun 5, 2012 , Floor Calendar: Jun 6, 2012 , Floor Calendar: Jun 11, 2012 , Floor Calendar: Jun 12, 2012 , Floor Calendar: Jun 13, 2012 , Floor Calendar: Jun 14, 2012 , Floor Calendar: Jun 18, 2012

Votes

Memo

BILL NUMBER:S4950

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.

Text

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  REIMBURSEMENT

 EXPLANATION--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.