Bill S6960-2013

Allows for the use of an affiliate company to meet certain obligations of an insurer

Allows for the use of an affiliate company to meet certain obligations of an insurer, including issuing replacement coverage in the case of a class discontinuance of individual coverage and issuing individual conversion coverage.

Details

Actions

  • Sep 23, 2014: SIGNED CHAP.388
  • Sep 11, 2014: DELIVERED TO GOVERNOR
  • Jun 17, 2014: returned to senate
  • Jun 17, 2014: passed assembly
  • Jun 17, 2014: ordered to third reading cal.584
  • Jun 17, 2014: substituted for a9208
  • May 21, 2014: referred to insurance
  • May 21, 2014: DELIVERED TO ASSEMBLY
  • May 21, 2014: PASSED SENATE
  • May 7, 2014: ADVANCED TO THIRD READING
  • May 6, 2014: 2ND REPORT CAL.
  • May 5, 2014: 1ST REPORT CAL.493
  • Apr 9, 2014: REFERRED TO INSURANCE

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Insurance - May 5, 2014
Ayes (18): Seward, Carlucci, Flanagan, Golden, Grisanti, Lanza, Larkin, LaValle, O'Mara, Young, Avella, Breslin, Espaillat, Kennedy, Parker, Stavisky, O'Brien, Peralta
Ayes W/R (1): Martins

Memo

BILL NUMBER:S6960            REVISED MEMO 05/06/2014

TITLE OF BILL: An act to amend the insurance law, in relation to allowing for the use of an affiliate company to meet certain obligations of an insurer

PURPOSE:

The purpose of this bill is to grant authority to the Superintendent of Financial Services to allow an insurer to use an affiliate company to meet certain obligations of the insurer.

SUMMARY OF PROVISIONS:

This legislation would allow the Superintendent of the Department of Financial Services to, upon consideration of the public interest, approve requests made by health insurers to satisfy the requirements that they issue replacement coverage in the case of a class discontinuance of individual coverage and issue individual conversion coverage through another entity within the insurer's holding company system.

JUSTIFICATION:

This bill would provide health insurers with greater flexibility when offering policies while still ensuring that consumers are able to access quality, affordable coverage that meets their needs. Currently, insurers that discontinue a class of coverage in the individual market are required to offer policyholders replacement coverage; in addition, insurers are required to offer individuals a conversion policy when they are no longer able to access group coverage in certain circumstances. In last year's budget, we allowed the Department of Financial Services (DFS) to exempt Health Maintenance Organizations (HMOs) from these requirements, provided that another insurer within a HMO's holding company offers the same policy with the same consumer protections. However, due to a technical glitch this language only works one way; DFS cannot exempt an insurer from these requirements, even if the insurer has a HMO in its holding company system. This bill would make technical changes to the Insurance Law to address this. All policies would still have to be in compliance with the Affordable Care Act and all applicable New York State laws.

LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 6960 IN SENATE April 9, 2014 ___________
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 allowing for the use of an affiliate company to meet certain obligations of an insurer THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subparagraph (A) of paragraph 5 of subsection (c) of section 3216 of the insurance law, as amended by section 46-b of part D of chapter 56 of the laws of 2013, is amended to read as follows: (A) Any family policy providing hospital or surgical expense insurance (but not including such insurance against accidental injury only) shall provide that, in the event such insurance on any person, other than the policyholder, is terminated because the person is no longer within the definition of the family as set forth in the policy but before such person has attained the limiting age, if any, for coverage of adults specified in the policy, such person shall be entitled to have issued to that person by the insurer, without evidence of insurability, upon application therefor and payment of the first premium, within sixty days after such insurance shall have terminated, an individual conversion policy that contains the benefits described in paragraph one of subsection (b) of section four thousand three hundred twenty-eight of this chapter. The insurer shall offer one policy at each level of cover- age as defined in section 1302(d) of the affordable care act, 42 U.S.C. S 18022(d). The individual may choose any such policy offered by the insurer. PROVIDED, HOWEVER, THE SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY AN INSURER FOR THE INSURER TO SATISFY THE REQUIREMENTS OF THIS SUBPARAGRAPH THROUGH THE OFFERING OF POLICIES THAT COMPLY WITH THIS SUBPARAGRAPH BY ANOTHER INSURER, CORPORATION OR HEALTH MAINTENANCE ORGANIZATION WITHIN THE INSURER'S HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF THIS CHAPTER. The conversion privilege afforded herein shall also be available upon the divorce or annulment of the marriage of the policy- holder to the former spouse of such policyholder. S 2. Paragraph 2 of subsection (g) of section 3216 of the insurance law is amended by adding a new subparagraph (E) to read as follows: (E) THE SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY AN INSURER FOR THE INSURER TO
SATISFY THE REQUIREMENTS OF SUBPARAGRAPH (C) OF THIS PARAGRAPH THROUGH THE OFFERING OF POLICIES AT EACH LEVEL OF COVERAGE AS DEFINED IN SECTION 1302(D) OF THE AFFORDABLE CARE ACT, 42 U.S.C. S 18022(D) THAT CONTAINS THE BENEFITS DESCRIBED IN PARAGRAPH ONE OF SUBSECTION (B) OF SECTION FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT OF THIS CHAPTER BY ANOTHER INSURER, CORPORATION OR HEALTH MAINTENANCE ORGANIZATION WITHIN THE INSURER'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF THIS CHAPTER. S 3. Subsection (g) of section 3221 of the insurance law, as added by section 49 of part D of chapter 56 of the laws of 2013, is amended to read as follows: (g) For conversion purposes, an insurer shall offer to the employee or member a policy at each level of coverage as defined in section 1302(d) of the affordable care act, 42 U.S.C. S 18022(d) that contains the bene- fits described in paragraph one of subsection (b) of section four thou- sand three hundred twenty-eight of this chapter. PROVIDED, HOWEVER, THE SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTER- EST, APPROVE A REQUEST MADE BY AN INSURER FOR THE INSURER TO SATISFY THE REQUIREMENTS OF THIS SUBSECTION AND SUBSECTIONS (E) AND (F) OF THIS SECTION THROUGH THE OFFERING OF POLICIES THAT COMPLY WITH THIS SUBSECTION BY ANOTHER INSURER, CORPORATION OR HEALTH MAINTENANCE ORGAN- IZATION WITHIN THE INSURER'S HOLDING COMPANY SYSTEM, AS DEFINED IN ARTI- CLE FIFTEEN OF THIS CHAPTER. S 4. Item (i) of subparagraph (C) of paragraph 2 of subsection (c) of section 4304 of the insurance law, as amended by section 43-a of part D of chapter 56 of the laws of 2013, is amended to read as follows: (i) Discontinuance of a class of contract upon not less than five months' prior written notice. In exercising the option to discontinue coverage pursuant to this item, the corporation must act uniformly with- out regard to any health status-related factor of enrolled individuals or individuals who may become eligible for such coverage and must offer to subscribers or group remitting agents, as may be appropriate, the option to purchase all other individual health insurance coverage currently being offered by the corporation to applicants in that market. PROVIDED, HOWEVER, THE SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDER- ATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY A CORPORATION FOR THE CORPORATION TO SATISFY THE REQUIREMENTS OF THIS ITEM THROUGH THE OFFERING OF CONTRACTS AT EACH LEVEL OF COVERAGE AS DEFINED IN SECTION 1302(D) OF THE AFFORDABLE CARE ACT, 42 U.S.C. S 18022(D) THAT CONTAINS THE BENEFITS DESCRIBED IN PARAGRAPH ONE OF SUBSECTION (B) OF SECTION FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT OF THIS CHAPTER BY ANOTHER CORPORATION, INSURER OR HEALTH MAINTENANCE ORGANIZATION WITHIN THE CORPORATION'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF THIS CHAPTER. S 5. Paragraph 1 of subsection (e) of section 4304 of the insurance law, as amended by section 51 of part D of chapter 56 of the laws of 2013, is amended to read as follows: (1) If any such contract is terminated in accordance with the provisions of paragraph one of subsection (c) of this section, or any such contract is terminated because of a default by the remitting agent in the payment of premiums not cured within the grace period and the remitting agent has not replaced the contract with similar and contin- uous coverage for the same group whether insured or self-insured, or any such contract is terminated in accordance with the provisions of subpar- agraph (E) of paragraph two of subsection (c) of this section, or if an individual other than the contract holder is no longer covered under a
"family contract" because the individual is no longer within the defi- nition set forth in the contract, or a spouse is no longer covered under the contract because of divorce from the contract holder or annulment of the marriage, or any such contract is terminated because of the death of the contract holder, then such individual, former spouse, or in the case of the death of the contract holder the surviving spouse or other depen- dents of the deceased contract holder covered under the contract, as the case may be, shall be entitled to convert, without evidence of insura- bility, upon application therefor and the making of the first payment thereunder within sixty days after the date of termination of such contract, to a contract that contains the benefits described in para- graph one of subsection (b) of section four thousand three hundred twen- ty-eight of this chapter. The corporation shall offer one contract at each level of coverage as defined in section 1302(d) of the affordable care act, 42 U.S.C. S 18022(d). The individual may choose any such contract offered by the corporation. PROVIDED, HOWEVER, THE SUPERINTEN- DENT MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY A CORPORATION FOR THE CORPORATION TO SATISFY THE REQUIREMENTS OF THIS PARAGRAPH THROUGH THE OFFERING OF CONTRACTS THAT COMPLY WITH THIS PARAGRAPH BY ANOTHER CORPORATION, INSURER OR HEALTH MAINTENANCE ORGANIZATION WITHIN THE CORPORATION'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF THIS CHAPTER. The effective date of the coverage provided by the converted direct payment contract shall be the date of the termination of coverage under the contract from which conversion was made. S 6. Subparagraph (A) of paragraph 1 of subsection (d) of section 4305 of the insurance law, as amended by section 52 of part D of chapter 56 of the laws of 2013, is amended to read as follows: (A) A group contract issued pursuant to this section shall contain a provision to the effect that in case of a termination of coverage under such contract of any member of the group because of (i) termination for any reason whatsoever of the member's employment or membership, or (ii) termination for any reason whatsoever of the group contract itself unless the group contract holder has replaced the group contract with similar and continuous coverage for the same group whether insured or self-insured, the member shall be entitled to have issued to the member by the corporation, without evidence of insurability, upon application therefor and payment of the first premium made to the corporation within sixty days after termination of the coverage, an individual direct payment contract, covering such member and the member's eligible depen- dents who were covered by the group contract, which provides coverage that contains the benefits described in paragraph one of subsection (b) of section four thousand three hundred twenty-eight of this chapter. The corporation shall offer one contract at each level of coverage as defined in section 1302(d) of the affordable care act, 42 U.S.C. S 18022(d). The member may choose any such contract offered by the corpo- ration. PROVIDED, HOWEVER, THE SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY A CORPO- RATION FOR THE CORPORATION TO SATISFY THE REQUIREMENTS OF THIS SUBPARA- GRAPH THROUGH THE OFFERING OF CONTRACTS THAT COMPLY WITH THIS SUBPARA- GRAPH BY ANOTHER CORPORATION, INSURER OR HEALTH MAINTENANCE ORGANIZATION WITHIN THE CORPORATION'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF THIS CHAPTER. S 7. This act shall take effect immediately.

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