This bill has been amended

Bill S6014A-2009

Relates to group life and group accident and health insurance policies

Relates to group life and group accident and health insurance policies; revises certain provisions relating to minimum participation requirements by employees in group life and certain group accident and health insurance contracts.

Details

Actions

  • Jun 9, 2010: ADVANCED TO THIRD READING
  • Jun 8, 2010: 2ND REPORT CAL.
  • Jun 7, 2010: 1ST REPORT CAL.751
  • Jan 6, 2010: REFERRED TO INSURANCE
  • Jun 21, 2009: PRINT NUMBER 6014A
  • Jun 21, 2009: AMEND AND RECOMMIT TO RULES
  • Jun 19, 2009: REFERRED TO RULES

Votes

VOTE: COMMITTEE VOTE: - Insurance - Jun 7, 2010
Ayes (17): Breslin, Stachowski, Kruger, Diaz, Parker, Sampson, Thompson, Espada, Peralta, Seward, LaValle, Larkin, Alesi, Leibell, Golden, Young, McDonald
Ayes W/R (1): Johnson C

Memo

 BILL NUMBER:  S6014A

TITLE OF BILL : An act to amend the insurance law, in relation to group life and group accident and health insurance policies

PURPOSE : This bill would amend §§4216 and 4235 of the insurance law to revise certain provisions relating to requisite minimum participation requirements by employees in group life and certain group accident and health insurance contracts.

SUMMARY OF PROVISIONS : This bill would amend paragraph (1) of subsection (b) of section 4216 of the insurance law to, for groups of 25 or less, reduce the minimum number of eligible employees that must be insured under a group life insurance plan to 50% of eligible employees or five, whichever is less. This bill would also make a similar amendment to subparagraph (A) of paragraph (1) of subsection (c) of section 4235 of the insurance relating to group accident and health insurance, with the exception being that the current minimum group participation requirements will continue for hospital, medical, major medical or similar comprehensive type expense reimbursed coverage but will be reduced in groups of 25 or less for all other types of group accident and health insurance (disability, long term care, vision, dental, etc...).

CURRENT PROVISIONS : For both group life and group accident and health insurance contracts, current law establishes that such contract should cover not less than fifty percent or, if less, fifty or more of such eligible employees.

JUSTIFICATION : In recent years, employee benefits have changed significantly. There was a time when employers paid a substantial portion or even all of the cost of employee benefits. Many corporations still do but, due to the increasing burden of insurance costs, employers of all sizes have also been forced to reduce their contributions to the benefit plans offered to their employees, in order to continue to afford such employee coverage. Employees have increasingly been asked to share these costs with their employer. Today, 25% of the group life insurance market is fully voluntary, in that the employee elects coverage and may pay some or all of the premiums for such coverage. By offering these voluntary products through an employer group, the employer can offer their employees the advantages of payroll deduction, limited underwriting and other efficiencies in administration that can oftentimes lead to cheaper insurance premiums for the employee.

In looking at how best to meet the demands of the marketplace, in particular to small businesses, it was determined that certain restrictions in the group laws of several states, including New York, created an impediment to a number of otherwise common group offerings. These provisions, written many years ago for a purpose that no longer exists (to protect insurers from adverse selection in the underwriting process), restrict employee access to voluntary coverage. Given the realities of today's employer group market, these outdated laws are ill-suited to protect and benefit consumers.

This bill would remove these impediments and create the ability for insurers to tailor more attractive and available group coverage for employers and employees in New York. It would allow insurers to offer group coverage to employees of any employer who elect to take part in a group life, disability income, long term care, vision or dental

policy by removing the current restriction that the group must be of a sufficient size in order to qualify for group coverage.

PRIOR LEGISLATIVE HISTORY : 2008: S.7766

FISCAL IMPLICATIONS : No known costs to the State are associated with this bill.

EFFECTIVE DATE : This act shall take effect immediately.

Text

STATE OF NEW YORK ________________________________________________________________________ 6014--A 2009-2010 Regular Sessions IN SENATE June 19, 2009 ___________
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Rules -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the insurance law, in relation to group life and group accident and health insurance policies THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 1 of subsection (b) of section 4216 of the insur- ance law, as amended by chapter 369 of the laws of 1985, is amended to read as follows: (1) A policy issued to an employer or to a trustee or trustees of a fund established by an employer, which employer or trustees shall be deemed the policyholder, insuring with or without evidence of individual insurability satisfactory to the insurer, employees of such employer, and insuring, except as hereinafter provided, all of such employees or all of any class or classes thereof determined by conditions pertaining to the employment, or by a combination of such conditions and conditions pertaining to the family status of the employee, for amounts of insur- ance on each person insured based upon some plan which will preclude individual selection. However, such a plan may permit a limited number of selections by employees if the selections offered utilize a consist- ent pattern of grading the amounts of insurance for individual group members so that the resulting pattern of coverage is reasonable. The premium for the policy shall be paid by the policyholder, either wholly from the employer's funds [or funds contributed by him] or from funds contributed by the insured employees, or from funds contributed jointly by the employer and employees. If all or part of the premium is to be derived from funds contributed by the insured employees, such policy must insure not less than fifty percent of such eligible employees or, if less, fifty or more of such employees; PROVIDED THAT FOR EMPLOYERS
WITH TWENTY-FIVE OR FEWER EMPLOYEES AT ISSUE, SUCH POLICY MUST INSURE NOT LESS THAN FIFTY PERCENT OF SUCH ELIGIBLE EMPLOYEES OR, IF LESS, FIVE OR MORE OF SUCH EMPLOYEES. Except as provided in subsection (b) of section four thousand two hundred thirty-one of this article and in paragraph five of subsection (a) of section three thousand two hundred twenty of this chapter, such policy shall provide for payment of all benefits thereunder, to the person insured or to some beneficiary or beneficiaries other than the employer, and shall provide for the issu- ance of a certificate to the policyholder for delivery to the person insured or to such beneficiary, as evidence of such insurance. S 2. Subparagraph (A) of paragraph 1 of subsection (c) of section 4235 of the insurance law, as separately amended by chapters 369 and 846 of the laws of 1985, is amended to read as follows: (A) A policy issued to an employer or to a trustee or trustees of a fund established by an employer, which employer or trustee or trustees shall be deemed the policyholder, insuring with or without evidence of insurability satisfactory to the insurer, employees of such employer, and insuring, except as hereinafter provided, all of such employees or all of any class or classes thereof determined by conditions pertaining to the employment or a combination of such conditions and conditions pertaining to the family status of the employee, for insurance coverage on each person insured based upon some plan which will preclude individ- ual selection. However, such a plan may permit a limited number of selections by employees if the selections offered utilize consistent plans of coverage for individual group members so that the resulting plans of coverage are reasonable. The premium for the policy shall be paid by the policyholder, either from the employer's funds, or from funds contributed by the insured employees, or from funds contributed jointly by the employer and employees. If all or part of the premium is to be derived from funds contributed by the insured employees, then such policy must insure not less than fifty percent of such eligible employ- ees or, if less, fifty or more of such employees; PROVIDED THAT FOR EMPLOYERS WITH TWENTY-FIVE OR FEWER EMPLOYEES, A POLICY PROVIDING COVER- AGE FOR OTHER THAN HOSPITAL, MEDICAL, MAJOR MEDICAL OR SIMILAR COMPRE- HENSIVE TYPES OF EXPENSE REIMBURSED COVERAGE MUST INSURE NOT LESS THAN FIFTY PERCENT OF SUCH ELIGIBLE EMPLOYEES OR, IF LESS, FIVE OR MORE OF SUCH EMPLOYEES. S 3. This act shall take effect immediately.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Discuss!

blog comments powered by Disqus