Relates to life, accident and health insurance; relates to discrimination and rebating; also relates to prohibited inducements and independent sales.
TITLE OF BILL: An act to amend the insurance law, in relation to life, accident and health insurance; discriminating and rebating; prohibited inducements and independent sales
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 and its resulting costs, and to assist insurers and employers in the development and implementation of care coordination services and other incidental or ancillary programs and services.
SUMMARY OF PROVISIONS: Section 1 of the bill would amend subsection (f) of § 4224 of the insurance law by adding a new paragraph (3) thereto, to allow licensed insurance producers without charging a service fee, or in the case of licensed insurance brokers for a separate service fee, to provide certain services to assist insurers and, policyholders in the interpretation, management and communication of health insurance policies and plans and their costs, including risk assessment, insurance consultation and advice, insurance-related regulatory & legislative updates, claims assistance services, tax preparations services related to IRS Form 5500 Schedule A (Annual Return/Report of Employee Benefit Plan), insurance plan information, forms, administration, employee & subscriber enrollment services, website links/employee benefit portals, answers to FAQs, COBRA administration services, and HIPAA compliance services.
Section 2 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 producers, including 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 allowanced 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, without charging a service fee, or in the case of licensed insurance brokers for a separate service fee.
Moreover, this bill would codify 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: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 7299 IN SENATE May 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 life, accident and health insurance; discriminating and rebating; prohibited inducements and independent sales THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (f) of section 4224 of the insurance law is amended by adding a new paragraph 3 to read as follows: (3) NOTWITHSTANDING SUBSECTION (C) OF THIS SECTION, A LICENSED AGENT OR INSURANCE BROKER MAY PROVIDE THE FOLLOWING SERVICES WITHOUT CHARGING A SERVICE FEE OR, IN THE CASE OF A LICENSED INSURANCE BROKER, FOR A SEPARATE SERVICE FEE PURSUANT TO A WRITTEN MEMORANDUM MADE IN ACCORDANCE WITH SUBSECTION (C) OF SECTION TWO THOUSAND ONE HUNDRED AND NINETEEN OF THIS CHAPTER, IF SUCH SERVICES ARE PROVIDED IN A FAIR AND NONDISCRIMINA- TORY MANNER AND INCIDENTAL TO A GROUP OR BLANKET POLICY OR CONTRACT SOLD BY THE INSURANCE AGENT OR INSURANCE BROKER: (I) RISK ASSESSMENT, INCLUDING IDENTIFYING SOURCES OF RISK AND DEVEL- OPING STRATEGIES FOR ELIMINATING OR LIMITING THOSE RISKS; (II) INSURANCE CONSULTING SERVICES OR OTHER INSURANCE-RELATED ADVICE; (III) INSURANCE-RELATED REGULATORY AND LEGISLATIVE UPDATES; (IV) CERTAIN CLAIMS ASSISTANCE SERVICES (INCLUDING THE PREPARATION OF CLAIMS FORMS), BUT EXCLUDING ADJUSTMENT, UNLESS THE EXCEPTIONS SET FORTH IN SUBSECTION (G) OF SECTION TWO THOUSAND ONE HUNDRED AND ONE OF THIS CHAPTER ARE SATISFIED; (V) TAX PREPARATION ON BEHALF OF AN EMPLOYER OF SCHEDULE A OF THE INTERNAL REVENUE SERVICE FORM FIFTY-FIVE HUNDRED ANNUAL RETURN/REPORT OF EMPLOYEE BENEFIT PLAN, WHICH REQUESTS INFORMATION REGARDING INSURANCE CONTRACT COVERAGE, FEES, AND COMMISSIONS, INVESTMENT AND ANNUITY CONTRACTS, AND WELFARE BENEFIT CONTRACTS; (VI) INFORMATION TO GROUP POLICY OR CONTRACT HOLDERS AND MEMBERS UNDER GROUP INSURANCE POLICIES CURRENTLY IN PLACE, AS WELL AS FORMS NEEDED FOR PLAN ADMINISTRATION, ENROLLMENT IN A PLAN, INSURER WEBSITE LINKS, AND ANSWERS TO FREQUENTLY ASKED QUESTIONS RELATED TO THE INSURANCE (INCLUD-EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15061-01-4 S. 7299 2
ING, FOR EXAMPLE, ACCESS THROUGH A WEBSITE, CREATED BY THE INSURANCE PRODUCER, TO AN EMPLOYEE BENEFIT PORTAL THAT CONTAINS SUCH INFORMATION); (VII) CERTAIN SERVICES PERFORMED PURSUANT TO THE FEDERAL CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT (COBRA), SUCH AS BILLING FORMER EMPLOYES, COLLECTING THE INSURANCE PREMIUMS, AND FORWARDING THE AGGRE- GATE PREMIUMS TO THE EMPLOYER POLICY OR CONTRACT HOLDER OR TO THE INSUR- ER, WHEN OFFERED IN CONNECTION WITH THE PROVISION OF ACCIDENT AND HEALTH INSURANCE; AND (VIII) CERTAIN SERVICES PROVIDED IN ACCORDANCE WITH THE FEDERAL HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT, SUCH AS THOSE PERTAINING TO HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY, WHEN OFFERED IN CONNECTION WITH THE PROVISION OF ACCIDENT AND HEALTH INSURANCE. S 2. This act shall take effect immediately.