senate Bill S1235

Provides certain coverage for diagnosis and treatment of chemical abuse and chemical dependence

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 06 / Jan / 2011
    • REFERRED TO INSURANCE
  • 04 / Jan / 2012
    • REFERRED TO INSURANCE

Summary

Provides certain coverage for diagnosis and treatment of chemical abuse and chemical dependence.

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Bill Details

Versions:
S1235
Legislative Cycle:
2011-2012
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd ยงยง3221 & 4303, Ins L
Versions Introduced in 2009-2010 Legislative Cycle:
S7788

Sponsor Memo

BILL NUMBER:S1235

TITLE OF BILL:

An act
to amend the insurance law, in relation to providing certain coverage
for diagnosis and treatment of chemical abuse and chemical dependence

PURPOSE:

Provides that the benefits provided through group health insurance
policies and health plans for the treatment of chemical abuse and
chemical dependence be comparable to medical services.

SUMMARY OF PROVISIONS:

Section 1. Converts the current insurance law requirement that group
and school blanket policies be made available as an option to provide
coverage for benefits comparable to medical benefits for the
diagnosis and treatment of chemical abuse and chemical dependence to
a requirement for fully insured groups in NYS; conforms this
requirement to the requirements made by "Timothy's Law" for mental
health benefits, pursuant to Chapter 748 of the Laws of2006 and
Chapter 502 of the Laws of2007, and a Chapter of the laws of2009; and
requires the Superintendent of Insurance to develop a methodology to
fully cover the cost of this requirement to any employer of fifty or
fewer employees, to be financed from the General Fund.

Section 2. Makes conforming amendments to the current requirement and
comparability standard that group and school blanket policies provide
coverage for at least 60 outpatient visits for the diagnosis and
treatment of chemical dependence of which up to twenty may be for
family members, including provisions relating to policies covering
physician services consistent with Chapter 502 of the Laws of 2007.

Section 3. Converts the current insurance law requirement that
hospital service corporations or health service corporations which
provide group, group remittance or school blanket coverage for
inpatient hospital care make available as an option coverage for
benefits comparable to medical benefits for the diagnosis and
treatment of chemical abuse and chemical dependence to a requirement
for fully insured groups in NYS; conforms this requirement to the
requirements made by "Timothy's Law" for mental health benefits,
pursuant to Chapter 748 of the Laws of 2006 and Chapter 502 of the
Laws of 2007, and a Chapter of the laws of 2009; and requires the
Superintendent of Insurance to develop a methodology to fully cover
the cost of this requirement to any employer of fifty or fewer
employees, to be financed from the General Fund.

Section 4. Makes conforming amendments to the current requirement and
comparability standard that hospital service corporation or health
service corporations which provide group, group remittance or school
blanket coverage for inpatient hospital care provide coverage for at
least 60 outpatient visits for the diagnosis and treatment of
chemical dependence of which up to twenty may be for family members.


Section 5. Requires the Superintendent of Insurance to ensure that
insurers' contracts or policies do not contain unreasonable
definitions of chemical abuse, alcohol and substance abuse, chemical
dependence, alcoholism and substance dependence in their contracts or
policies.

Section 6. Provides that this legislation will take effect on the
first of January next succeeding the date on which it becomes a law;
and that its provisions will apply to policies and contracts issued,
renewed, modified, altered or amended on or after the effective date.

JUSTIFICATION:
Timothy's Law (Chapter 748 of the Laws of 2006), one of the 42 state
mental health parity laws in the US, took effect January 1, 2007 and
applies to most insurance policies in New York on the day they are
issued, renewed, modified, altered, or amended. Before the law
passed, health plans were permitted to discriminate against those
with mental health needs by charging much higher co-payments and
deductibles for inpatient and outpatient mental health care compared
with the fees they charge consumers for regular medical office
visits. Top health plans also recently began to restrict coverage for
mental health conditions, exclude coverage for chronic mental
illnesses, and impose life time limits on inpatient psychiatric care.
Timothy's Law remedied many of these barriers to care.

Predating Timothy's Law, insurance coverage for the diagnosis and
treatment of chemical abuse and chemical dependence included required
coverage of 60 outpatient visits and optional coverage for inpatient
detoxification and rehabilitation service which plans were required
to offer to employers seeking such coverage.

Further, Federal law recently added mental health parity requirements
to the Child Health Insurance plans (effective April 1, 2009) and
Medicare (effective on a phased in schedule over the next few years)
as well as self-insured plans and other large employers, including
parity in coverage for the treatment of chemical dependency
(effective with plan years beginning after October 3, 2009 except for
certain collectively bargained plans that are subject to special
rules regarding effective date).

One remaining gap in the insurance landscape is that health plans are
not required to provide coverage for inpatient detoxification or
rehabilitation services, but merely to offer such coverage for fully
insured employers seeking to purchase it.

This legislation assures that such coverage is required and comparable
to that which is provided for other medical conditions under these
plans and policies, and does not place greater restrictions on
coverage for addictions than apply for other needs.

Recent studies confirm the efficacy and cost effectiveness of such
coverage, and, furthermore demonstrate that the costs associated with
the enactment of mental health parity legislation are minimal.
Actuarial analyses and emerging data from states with parity laws
demonstrate that equitable insurance coverage for mental illnesses
and chemical dependency is indeed affordable.


Studies demonstrate that the cost of adopting mental health and
chemical dependency parity is negligible - often below one per cent.
The NYS Insurance Department projected costs for
Timothy's Law premium subsidies for small employers to be about one
percent for the premium component attributable to the entire mental
health benefit among private insurers and Health Maintenance
Organizations in NYS.

The comparability required under this legislation would cost a mere
fraction of that sum, since most plans already provide some degree of
addiction treatment coverage. Further, the cost to the taxpayer will
be reduced, since those who may would need benefits otherwise cost
employers dearly due to well documented consequences of untreated
addiction including absences and low productivity.

Finally, costs are incurred by individuals, employers, all levels of
government, and society as a whole as a result of addictions that can
also cause or contribute to accidents, job dissatisfaction,
interpersonal conflict, turnover, disability, workers' compensation,
involvement with the criminal justice system, disrupted lives and
families, and increased dependency on public resources. By providing
comparable coverage for addictions, such disorders can be diagnosed
and treated quickly and thoroughly, thus placing less of a burden on
public resources and businesses.

LEGISLATIVE HISTORY:
2010: S.7788 (Duane) Died in Insurance

FISCAL IMPLICATIONS:
Minimal.

EFFECTIVE DATE:
January 1 of the year next succeeding enactment.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1235

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             January 6, 2011
                               ___________

Introduced  by  Sen.  DUANE  -- 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  providing  certain
  coverage  for  diagnosis  and treatment of chemical abuse and chemical
  dependence

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 6 of subsection (l) of section 3221 of the insur-
ance  law,  as amended by chapter 558 of the laws of 1999, is amended to
read as follows:
  (6) (A) Every insurer delivering a group or school blanket  policy  or
issuing  a  group  or school blanket policy for delivery, in this state,
which provides coverage for inpatient hospital care [must make available
and, if requested  by  the  policyholder,]  OR  COVERAGE  FOR  PHYSICIAN
SERVICES  SHALL  provide AS PART OF SUCH POLICY BROAD-BASED coverage for
the diagnosis and treatment of chemical abuse and  chemical  dependence,
however  defined in such policy, AT LEAST EQUAL TO THE COVERAGE PROVIDED
FOR OTHER HEALTH CONDITIONS, provided, however, that the  term  chemical
abuse  shall  mean  and include alcohol and substance abuse and chemical
dependence shall mean and include alcoholism and  substance  dependence,
however  defined  in such policy. [Written notice of the availability of
such coverage shall be delivered to the policyholder prior to  inception
of  such  group  policy and annually thereafter, except that this notice
shall not be required where a policy covers two hundred or more  employ-
ees  or  where  the  benefit  structure  was  the  subject of collective
bargaining affecting persons who are employed in more than one state.]
  (B) Such coverage shall, WHERE THE POLICY PROVIDES COVERAGE FOR  INPA-
TIENT HOSPITAL CARE, be at least equal to the following:
  (i)  with  respect  to benefits for detoxification as a consequence of
chemical dependence, inpatient benefits in a hospital or  a  detoxifica-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01208-01-1

S. 1235                             2

tion  facility  may  not  be  limited  to less than seven days of active
treatment in any CONTRACT YEAR, PLAN YEAR, OR calendar year; and
  (ii)  with respect to benefits for rehabilitation services, such bene-
fits may not be limited to less than thirty days of  inpatient  care  in
any calendar year.
  (C) Such coverage may be limited to facilities in New York state which
are  certified  by the office of alcoholism and substance abuse services
and, in other states, to those which are accredited by the joint commis-
sion on accreditation of hospitals as  alcoholism,  substance  abuse  or
chemical dependence treatment programs.
  (D)  Such coverage shall be [made available] PROVIDED at the inception
of all new policies and with respect to all other policies at any  anni-
versary date of the policy [subject to evidence of insurability].
  (E)  Such  coverage  may be subject to annual deductibles, CO-PAYS and
co-insurance as may be deemed appropriate by the superintendent and  are
consistent  with  those imposed on other benefits [within a given] UNDER
THE policy. [Further, each insurer shall report  to  the  superintendent
each  year the number of contract holders to whom it has issued policies
for the inpatient treatment of chemical dependence, and the  approximate
number  of  persons covered by such policies] IN THE EVENT THAT A POLICY
PROVIDES  COVERAGE  FOR  BOTH  INPATIENT  HOSPITAL  CARE  AND  PHYSICIAN
SERVICES,  THE  AGGREGATE  OF  THE BENEFITS FOR OUTPATIENT CARE OBTAINED
UNDER THIS PARAGRAPH MAY BE LIMITED TO NOT LESS THAN SIXTY VISITS IN ANY
CONTRACT YEAR, PLAN YEAR OR CALENDAR YEAR.
  (F) Such coverage shall not replace, restrict  or  eliminate  existing
coverage provided by the policy.
  (G)  THE  SUPERINTENDENT  SHALL DEVELOP AND IMPLEMENT A METHODOLOGY TO
FULLY COVER THE COST TO ANY GROUP PURCHASER WITH FIFTY OR FEWER  EMPLOY-
EES THAT IS A POLICYHOLDER OF A POLICY THAT IS SUBJECT TO THE PROVISIONS
OF  THIS  SECTION  FOR PROVIDING THE COVERAGE REQUIRED IN THIS PARAGRAPH
AND PARAGRAPH SEVEN  OF  THIS  SUBSECTION.  SUCH  METHODOLOGY  SHALL  BE
FINANCED  FROM  FUNDS FROM THE GENERAL FUND THAT SHALL BE MADE AVAILABLE
TO THE SUPERINTENDENT FOR SUCH PURPOSE.
  S 2. Paragraph 7 of subsection (1) of section 3221  of  the  insurance
law,  as  amended by chapter 565 of the laws of 2000, is amended to read
as follows:
  (7) Every insurer delivering a group or school blanket policy or issu-
ing a group or school blanket policy for delivery in  this  state  which
provides  coverage  for  inpatient  hospital care [must] OR COVERAGE FOR
PHYSICIAN SERVICES SHALL provide AS PART OF SUCH POLICY coverage for  at
least  sixty outpatient visits in any CONTRACT YEAR, PLAN YEAR OR calen-
dar year for the diagnosis and treatment of chemical dependence of which
up to twenty may be for family members, except that this provision shall
not apply to a policy which covers persons employed  in  more  than  one
state  or  the  benefit structure of which was the subject of collective
bargaining affecting persons who are employed in more  than  one  state.
Such  coverage  may be limited to facilities in New York state certified
by the office of alcoholism and substance abuse services or licensed  by
such  office  as  outpatient  clinics or medically supervised ambulatory
substance abuse programs and,  in  other  states,  to  those  which  are
accredited  by  the  joint  commission  on accreditation of hospitals as
alcoholism or chemical dependence treatment programs.  WHERE THE  POLICY
PROVIDES  COVERAGE FOR PHYSICIAN SERVICES, IT SHALL INCLUDE BENEFITS FOR
OUTPATIENT CARE PROVIDED BY A PSYCHIATRIST OR PSYCHOLOGIST  LICENSED  TO
PRACTICE  IN THIS STATE, A LICENSED CLINICAL SOCIAL WORKER WHO MEETS THE
REQUIREMENTS OF SUBPARAGRAPH (D) OF PARAGRAPH FOUR OF  THIS  SUBSECTION,

S. 1235                             3

OR A PROFESSIONAL CORPORATION OR UNIVERSITY FACULTY PRACTICE CORPORATION
THEREOF. Such coverage may be subject to annual deductibles, CO-PAYS and
co-insurance  as  may  be  deemed  appropriate by the superintendent and
[are] SHALL BE consistent with those imposed on other benefits [within a
given]  UNDER  THE policy.  IN THE EVENT THAT A POLICY PROVIDES COVERAGE
FOR BOTH INPATIENT HOSPITAL CARE AND PHYSICIAN SERVICES,  THE  AGGREGATE
OF THE BENEFITS FOR OUTPATIENT CARE OBTAINED UNDER THIS PARAGRAPH MAY BE
LIMITED TO NOT LESS THAN SIXTY VISITS IN ANY CONTRACT YEAR, PLAN YEAR OR
CALENDAR  YEAR.  Such coverage shall not replace, restrict, or eliminate
existing coverage provided by the policy. Except as  otherwise  provided
in  the  applicable policy or contract, no insurer delivering a group or
school blanket policy or  issuing  a  group  or  school  blanket  policy
providing  coverage  for alcoholism or substance abuse services pursuant
to this section shall deny coverage to a family  member  who  identifies
[themself]  HIMSELF  OR HERSELF as a family member of a person suffering
from the disease of alcoholism, substance abuse or  chemical  dependency
and  who  seeks treatment as a family member who is otherwise covered by
the applicable policy or contract pursuant to this section. The coverage
required by this paragraph shall include treatment as  a  family  member
pursuant  to  such  family members' own policy or contract provided such
family member (i) does not exceed the allowable number of family  visits
provided  by the applicable policy or contract pursuant to this section,
and (ii) is otherwise entitled to coverage pursuant to this section  and
such family members' applicable policy or contract.
  S  3.  Subsection (k) of section 4303 of the insurance law, as amended
by chapter 558 of the laws of 1999, is amended to read as follows:
  (k) A hospital service corporation or  a  health  service  corporation
which  provides  group,  group remittance or school blanket coverage for
inpatient hospital care [must make available and  if  requested  by  the
contract  holder]  SHALL  provide  AS  PART  OF ITS CONTRACT BROAD-BASED
coverage for the diagnosis and treatment of chemical abuse and  chemical
dependence, however defined in such policy, AT LEAST EQUAL TO THE COVER-
AGE  PROVIDED  FOR  OTHER HEALTH CONDITIONS, provided, however, that the
term chemical abuse shall mean and include alcohol and  substance  abuse
and  chemical dependence shall mean and include alcoholism and substance
dependence, however defined in such policy, except that  this  provision
shall  not  apply to a policy which covers persons employed in more than
one state or the benefit structure of which was the subject  of  collec-
tive  bargaining  affecting  persons  who  are employed in more than one
state. Such coverage shall be at least equal to the following: (1)  with
respect  to  benefits  for  detoxification  as a consequence of chemical
dependence, inpatient benefits for care in a hospital or  detoxification
facility  may not be limited to less than seven days of active treatment
in any CONTRACT YEAR, PLAN YEAR OR calendar year; and (2)  with  respect
to benefits for inpatient rehabilitation services, such benefits may not
be  limited  to  less  than thirty days of inpatient rehabilitation in a
hospital based or free standing  chemical  dependence  facility  in  any
CONTRACT  YEAR, PLAN YEAR OR calendar year. Such coverage may be limited
to facilities in New York state which are certified  by  the  office  of
alcoholism  and  substance abuse services and, in other states, to those
which are accredited by the joint commission on accreditation of  hospi-
tals  as  alcoholism,  substance abuse, or chemical dependence treatment
programs. Such coverage [shall be made available at the inception of all
new policies and with respect to policies issued  before  the  effective
date of this subsection at the first annual anniversary date thereafter,
without  evidence  of insurability and at any subsequent annual anniver-

S. 1235                             4

sary date subject to evidence of insurability]  MAY  BE  PROVIDED  ON  A
CONTRACT  YEAR, PLAN YEAR OR CALENDAR YEAR BASIS AND SHALL BE CONSISTENT
WITH THE PROVISIONS OF OTHER BENEFITS UNDER THE CONTRACT.  Such coverage
may be subject to annual deductibles, CO-PAYS and co-insurance as may be
deemed  appropriate  by the superintendent and are consistent with those
imposed on other benefits [within a given policy. Further, each hospital
service corporation or health service corporation shall  report  to  the
superintendent  each  year the number of contract holders to whom it has
issued policies for the inpatient treatment of chemical dependence,  and
the  approximate  number  of persons covered by such policies] UNDER THE
CONTRACT. Such coverage shall not replace, restrict or eliminate  exist-
ing coverage provided by the policy. [Written notice of the availability
of  such  coverage  shall  be  delivered to the group remitting agent or
group contract holder prior to inception of such contract  and  annually
thereafter, except that this notice shall not be required where a policy
covers  two hundred or more employees or where the benefit structure was
the subject of collective bargaining affecting persons who are  employed
in more than one state] THE SUPERINTENDENT SHALL DEVELOP AND IMPLEMENT A
METHODOLOGY  TO  FULLY  COVER  THE COST TO ANY GROUP REMITTANCE GROUP OR
GROUP CONTRACT HOLDER WITH FIFTY OR  FEWER  EMPLOYEES  WHO  IS  A  GROUP
REMITTANCE GROUP OR GROUP CONTRACT HOLDER OF A POLICY THAT IS SUBJECT TO
THE  PROVISIONS  OF  THIS SECTION FOR PROVIDING THE COVERAGE REQUIRED IN
THIS SUBSECTION AND SUBSECTION (L) OF  THIS  SECTION.  SUCH  METHODOLOGY
SHALL  BE  FINANCED  FROM FUNDS FROM THE GENERAL FUND THAT SHALL BE MADE
AVAILABLE TO THE SUPERINTENDENT FOR SUCH PURPOSE.
  S 4. Subsection (l) of section 4303 of the insurance law,  as  amended
by chapter 565 of the laws of 2000, is amended to read as follows:
  (l)  A  hospital  service  corporation or a health service corporation
which provides group, group remittance or school  blanket  coverage  for
inpatient  hospital  care  [must]  SHALL provide AS PART OF ITS CONTRACT
coverage for at least sixty outpatient visits in any CONTRACT YEAR, PLAN
YEAR OR calendar year  for  the  diagnosis  and  treatment  of  chemical
dependence  of which up to twenty may be for family members, except that
this provision shall not apply to a contract issued pursuant to  section
four  thousand  three  hundred five of this article which covers persons
employed in more than one state or the benefit structure  of  which  was
the  subject of collective bargaining affecting persons who are employed
in more than one state. Such coverage may be limited  to  facilities  in
New York state certified by the office of alcoholism and substance abuse
services  or  licensed by such office as outpatient clinics or medically
supervised ambulatory substance abuse programs and, in other states,  to
those  which  are accredited by the joint commission on accreditation of
hospitals as alcoholism or chemical dependence substance abuse treatment
programs.  SUCH COVERAGE MAY BE PROVIDED ON A CONTRACT YEAR,  PLAN  YEAR
OR  CALENDAR  YEAR  BASIS  AND SHALL BE CONSISTENT WITH THE PROVISION OF
OTHER BENEFITS UNDER THE CONTRACT. Such coverage may be subject to annu-
al deductibles, CO-PAYS and co-insurance as may be deemed appropriate by
the superintendent and are consistent with those imposed on other  bene-
fits  [within  a  given policy] UNDER THE CONTRACT.  Such coverage shall
not replace, restrict or eliminate existing  coverage  provided  by  the
policy.  Except  as  otherwise  provided  in  the  applicable  policy or
contract, no hospital service corporation or health service  corporation
providing  coverage  for alcoholism or substance abuse services pursuant
to this section shall deny coverage to a family  member  who  identifies
[themself]  HIMSELF  OR HERSELF as a family member of a person suffering
from the disease of alcoholism, substance abuse or  chemical  dependency

S. 1235                             5

and  who  seeks treatment as a family member who is otherwise covered by
the applicable policy or contract pursuant to this section. The coverage
required by this subsection shall include treatment as a  family  member
pursuant  to  such  family members' own policy or contract provided such
family member (i) does not exceed the allowable number of family  visits
provided  by the applicable policy or contract pursuant to this section,
and (ii) is otherwise entitled to coverage pursuant to this section  and
such family members' applicable policy or contract.
  S  5. The superintendent of insurance shall monitor the implementation
of the coverage required pursuant to paragraphs 6 and  7  of  subsection
(l)  of section 3221, and subsections (k) and (l) of section 4303 of the
insurance law, and take such action as may be necessary, to ensure  that
insurers'  contracts or policies do not contain unreasonable definitions
of chemical abuse, alcohol and  substance  abuse,  chemical  dependence,
alcoholism  and  substance dependence in their contracts or policies. In
determining whether such definitions may  be  unreasonable,  the  super-
intendent  of insurance shall ensure that any exclusions and limitations
on covered benefits are consistent  with  benefits  provided  to  public
officers and employees pursuant to article 11 of the civil service law.
  S  6. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law; and the provisions  of
this  act  shall  apply to policies and contracts issued, renewed, modi-
fied, altered or amended on or after such effective date.

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