S T A T E   O F   N E W   Y O R K
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                                  3001

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 22, 2009
                               ___________

Introduced by M. of A. BARCLAY, KOLB, OAKS, GIGLIO, REILICH, MOLINARO --
  Multi-Sponsored  by  --  M.  of  A. BACALLES, BURLING, CALHOUN, CONTE,
  CROUCH, ERRIGO, FINCH, HAWLEY, SAYWARD, TEDISCO, TOWNSEND -- read once
  and referred to the Committee on Insurance

AN ACT to amend the insurance law, in relation to the  establishment  of
  freedom health insurance plans

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

  Section 1. Subsection (l) of section 3216 of  the  insurance  law,  as
added by chapter 504 of the laws of 1995, is amended to read as follows:
  (l)  On  and  after  January  first, nineteen hundred ninety-seven, no
insurer shall offer major medical,  comprehensive  or  other  comparable
individual  contracts, other than for purposes of conversion, unless the
benefits of such contracts, including deductibles and  coinsurance,  are
identical  to  the  out-of-plan  benefits  of the contracts described in
section four thousand three hundred twenty-two  of  this  chapter.  Such
contracts  must  include  a prescription drug benefit complying with the
requirements of that section. THE REQUIREMENTS OF THIS SUBSECTION  SHALL
NOT  APPLY  TO  A POLICY INTENDED TO QUALIFY FOR USE IN A HEALTH SAVINGS
ACCOUNT PURSUANT TO SECTION 1201 OF THE  FEDERAL  MEDICARE  PRESCRIPTION
DRUG,  IMPROVEMENT AND MODERNIZATION ACT OF 2003. SUCH POLICIES SHALL BE
KNOWN AS "FREEDOM POLICIES".
  S 2. Section 3221 of the insurance law is  amended  by  adding  a  new
subsection (r) to read as follows:
  (R) NO GROUP OR BLANKET ACCIDENT AND HEALTH INSURANCE POLICY ISSUED OR
ISSUED  FOR  DELIVERY  IN THIS STATE FOR USE IN A HEALTH SAVINGS ACCOUNT
PURSUANT TO SECTION 1201 OF  THE  FEDERAL  MEDICARE  PRESCRIPTION  DRUG,
IMPROVEMENT, AND MODERNIZATION ACT OF 2003 SHALL BE REQUIRED TO MEET THE
REQUIREMENTS  OF  THIS SECTION, OR REGULATIONS ISSUED BY THE SUPERINTEN-
DENT, WITH REGARD TO COVERED HEALTH CARE SERVICES WHICH MUST BE INCLUDED
IN THE POLICY. SUCH POLICIES SHALL BE KNOWN AS "FREEDOM POLICIES".

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02808-01-9
              

A. 3001                             2

  S 3. Subsection (l) of section 4304 of the insurance law, as added  by
chapter 504 of the laws of 1995, is amended to read as follows:
  (l)  On  and  after  January  first, nineteen hundred ninety-seven, no
insurer shall offer major medical,  comprehensive  or  other  comparable
individual  contracts on a direct payment basis, other than for purposes
of conversion, unless the benefits of such contracts, including  deduct-
ibles  and coinsurance, are identical to the out-of-plan benefits of the
contracts described in section four thousand three hundred twenty-two of
this article. Such contracts must include a  prescription  drug  benefit
complying  with  the  requirements  of such section. THE REQUIREMENTS OF
THIS SUBSECTION SHALL NOT APPLY TO A POLICY INTENDED TO QUALIFY FOR  USE
IN  A  HEALTH  SAVINGS  ACCOUNT  PURSUANT TO SECTION 1201 OF THE FEDERAL
MEDICARE PRESCRIPTION DRUG, IMPROVEMENT AND MODERNIZATION ACT  OF  2003.
SUCH POLICIES SHALL BE KNOWN AS "FREEDOM POLICIES".
  S  4.  Section  4304  of  the insurance law is amended by adding a new
subsection (m) to read as follows:
  (M) NO POLICY ISSUED TO A REMITTING AGENT ON BEHALF OF A GROUP  PURSU-
ANT  TO  SUBSECTION (A) OF THIS SECTION, AND NO POLICY ISSUED TO A GROUP
PURSUANT TO SECTION FOUR THOUSAND THREE HUNDRED FIVE  OF  THIS  ARTICLE,
FOR  USE  IN  A  HEALTH  SAVINGS ACCOUNT PURSUANT TO SECTION 1201 OF THE
FEDERAL MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND  MODERNIZATION  ACT
OF  2003  SHALL  BE REQUIRED TO MEET THE REQUIREMENTS OF THIS SECTION OR
SECTION FOUR THOUSAND THREE HUNDRED FIVE OF THIS ARTICLE, OR REGULATIONS
ISSUED BY  THE  SUPERINTENDENT,  WITH  REGARD  TO  COVERED  HEALTH  CARE
SERVICES  WHICH  MUST  BE INCLUDED IN THE POLICY. SUCH POLICIES SHALL BE
KNOWN AS "FREEDOM POLICIES".
  S 5. Subsection (a) of section 4322 of the insurance law,  as  amended
by chapter 342 of the laws of 2004, is amended to read as follows:
  (a)  On  and  after  January  first,  nineteen hundred ninety-six, all
health maintenance organizations issued a certificate of authority under
article forty-four of the public health law or licensed under this arti-
cle shall offer to individuals, in addition to the standardized contract
required by section four thousand three hundred twenty-one of this arti-
cle, a standardized individual enrollee direct payment  contract  on  an
open  enrollment  basis  as  prescribed  by  section four thousand three
hundred seventeen of this article and section four thousand four hundred
six of the public health law, and  regulations  promulgated  thereunder,
with  an  out-of-plan  benefit  system,  provided,  however,  that  such
requirements shall not apply to a health maintenance organization exclu-
sively serving individuals enrolled pursuant to title eleven of  article
five  of  the social services law, title eleven-D of article five of the
social services law, title one-A of article twenty-five  of  the  public
health  law  or  title eighteen of the federal Social Security Act, and,
further provided, that such health maintenance  organization  shall  not
discontinue  a  contract  for an individual receiving comprehensive-type
coverage in effect prior to January first,  two  thousand  four  who  is
ineligible to purchase policies offered after such date pursuant to this
section  or section four thousand three hundred twenty-two of this arti-
cle due to the provision of 42 U.S.C. 1395ss in effect prior to  January
first, two thousand four. The out-of-plan benefit system shall either be
provided  by the health maintenance organization pursuant to subdivision
two of section four thousand four hundred six of the public  health  law
or  through  an  accompanying  insurance  contract providing out-of-plan
benefits offered by a company appropriately licensed  pursuant  to  this
chapter.  On  and  after January first, nineteen hundred ninety-six, the
contracts issued pursuant to this  section  and  section  four  thousand

A. 3001                             3

three  hundred  twenty-one  of  this article shall be the only contracts
offered by health maintenance organizations  to  individuals;  PROVIDED,
HOWEVER,  THIS  LIMITATION  SHALL  NOT  APPLY  TO  ONE  OR MORE POLICIES
INTENDED  TO  QUALIFY  FOR  USE  IN A HEALTH SAVINGS ACCOUNT PURSUANT TO
SECTION 1201 OF THE FEDERAL MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND
MODERNIZATION ACT OF 2003. SUCH POLICIES  SHALL  BE  KNOWN  AS  "FREEDOM
POLICIES".  The enrollee contracts issued by a health maintenance organ-
ization under this section and section four thousand three hundred twen-
ty-one  of  this  article shall also be the only contracts issued by the
health maintenance organization for purposes of conversion  pursuant  to
sections  four  thousand  three  hundred  four  and  four thousand three
hundred five of this article. However, nothing in this section shall  be
deemed to require health maintenance organizations to terminate individ-
ual  direct  payment  contracts  issued prior to January first, nineteen
hundred ninety-six or prohibit  health  maintenance  organizations  from
terminating  individual direct payment contracts issued prior to January
first, nineteen hundred ninety-six.
  S 6. This act shall take effect immediately.