S T A T E O F N E W Y O R K
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3537
2009-2010 Regular Sessions
I N A S S E M B L Y
January 27, 2009
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Introduced by M. of A. BRADLEY, ZEBROWSKI, SCHIMEL, GUNTHER, GALEF --
Multi-Sponsored by -- M. of A. BOYLAND, MAISEL, SWEENEY, TOWNS, WEIS-
ENBERG -- read once and referred to the Committee on Insurance
AN ACT to amend the public health law and the insurance law, in relation
to ensuring investments in health care
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Statement of legislative intent. The legislature finds that
there is an ongoing need to improve the health status of residents of
the state. Health care providers, business, health insurers and health
maintenance organizations all have a responsibility to ensure that the
communities they serve have the best health care possible. This is a
shared responsibility. However, many health insurers and health mainte-
nance organizations incur substantial profits and have excess reserves
while health care providers in general struggle financially. There
needs to be both a balance between the financial health of providers and
that of health insurers and health maintenance organizations and addi-
tional funding to improve the provision of health services in communi-
ties across the state, including improvements in quality, workforce,
infrastructure and efficiency.
The legislature finds that requiring health insurers and health main-
tenance organizations to provide funds for reinvestment in health care
will benefit all New Yorkers.
S 2. The public health law is amended by adding a new section 2807-z
to read as follows:
S 2807-Z. HEALTH CARE COMMUNITY REINVESTMENT FUND. 1. FUNDS ACCUMU-
LATED, INCLUDING INCOME FROM INVESTED FUNDS, FROM THE PAYMENTS SPECIFIED
IN SECTIONS THREE THOUSAND TWO HUNDRED FORTY AND FOUR THOUSAND THREE
HUNDRED TWENTY-EIGHT OF THE INSURANCE LAW SHALL BE DEPOSITED AND CREDIT-
ED TO A SPECIAL REVENUE FUND-OTHER FUND TO BE ESTABLISHED BY THE COMP-
TROLLER. TO THE EXTENT OF FUNDS APPROPRIATED THEREFOR, THE COMMISSIONER
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03547-01-9
A. 3537 2
SHALL PROVIDE FUNDING TO IMPROVE THE PROVISION OF HEALTH SERVICES IN
COMMUNITIES ACROSS THE STATE, INCLUDING IMPROVEMENTS IN QUALITY, WORK-
FORCE, INFRASTRUCTURE AND EFFICIENCY, IN ACCORDANCE WITH THE DETERMI-
NATIONS OF THE REGIONAL HEALTH CARE COMMUNITY REINVESTMENT COMMITTEES
ESTABLISHED PURSUANT TO SUBDIVISION TWO OF THIS SECTION. SUCH APPROPRI-
ATED FUNDS SHALL BE ALLOCATED ACROSS REGIONS OF THE STATE ON THE BASIS
OF THE TWO THOUSAND CENSUS POPULATION. REGIONS SHALL BE THOSE REGIONS
THAT WERE ESTABLISHED PURSUANT TO PARAGRAPH (B) OF SUBDIVISION SIXTEEN
OF SECTION TWO THOUSAND EIGHT HUNDRED SEVEN-C OF THIS ARTICLE. NOTWITH-
STANDING SECTIONS ONE HUNDRED TWELVE AND ONE HUNDRED SIXTY-THREE OF THE
STATE FINANCE LAW, OR ANY OTHER INCONSISTENT PROVISION OF LAW, FUNDS
SHALL BE ALLOCATED AND DISTRIBUTED WITHOUT A COMPETITIVE BID OR REQUEST
FOR PROPOSAL PROCESS.
2. A HEALTH CARE COMMUNITY REINVESTMENT COMMITTEE SHALL BE ESTABLISHED
IN EACH REGION OF THE STATE BY THE COMMISSIONER IN CONSULTATION WITH THE
SUPERINTENDENT OF INSURANCE TO DETERMINE REGIONAL NEEDS AND PRIORITIES
FOR THE AWARDING OF FUNDS. EACH SUCH COMMITTEE SHALL HAVE MEMBERS
REPRESENTING PAYERS, CONSUMERS, HOSPITALS AND PHYSICIANS IN THE REGION,
BUSINESS AND COMMUNITY LEADERS. FUNDS WITHIN A REGION SHALL BE DISTRIB-
UTED PURSUANT TO DETERMINATIONS MADE BY THE REGIONAL HEALTH CARE COMMU-
NITY REINVESTMENT COMMITTEE.
3. A STATEWIDE HEALTH CARE COMMUNITY REINVESTMENT FUND OVERSIGHT
COMMITTEE OF FIFTEEN MEMBERS SHALL BE ESTABLISHED BY THE COMMISSIONER IN
CONSULTATION WITH THE SUPERINTENDENT OF INSURANCE TO OVERSEE THE
DISTRIBUTION OF THE FUNDS. SUCH COMMITTEE SHALL HAVE MEMBERS REPRESENT-
ING PAYERS, CONSUMERS, HOSPITALS AND PHYSICIANS, BUSINESS AND COMMUNITY
LEADERS. SUCH COMMITTEE SHALL ENSURE THAT THE REINVESTMENT FUNDS ARE
USED IN ACCORDANCE WITH THE PURPOSES AND INTENT OF THIS SECTION.
S 3. The insurance law is amended by adding a new section 3240 to read
as follows:
S 3240. REINVESTMENT IN HEALTH CARE. BEGINNING IN CALENDAR YEAR TWO
THOUSAND TEN, IF THE LOSS RATIO FOR (A) AN INDIVIDUAL HEALTH INSURANCE
POLICY FORM IS LESS THAN EIGHTY-THREE PERCENT, (B) A SMALL GROUP HEALTH
INSURANCE POLICY FORM IS LESS THAN SEVENTY-EIGHT PERCENT, OR (C) A LARGE
GROUP HEALTH INSURANCE POLICY FORM IS LESS THAN EIGHTY-SIX PERCENT OR
SUCH HIGHER PERCENTAGE AS DETERMINED BY THE SUPERINTENDENT PURSUANT TO
THIS SECTION, AN INSURER SHALL PAY TO THE COMMISSIONER OF HEALTH OR THE
COMMISSIONER'S DESIGNEE A PERCENT OF THE AGGREGATE PREMIUM COLLECTED FOR
THE POLICY FORM IN THE PREVIOUS YEAR EQUAL TO THE DIFFERENCE BETWEEN THE
MINIMUM LOSS RATIO FOR THE POLICY FORM STATED IN THIS SECTION AND THE
ACTUAL LOSS RATIO; PROVIDED HOWEVER, SUCH AMOUNTS SHALL BE OFFSET BY ANY
AMOUNT REQUIRED TO BE RETURNED TO POLICY HOLDERS IN ACCORDANCE WITH
SECTION THREE THOUSAND TWO HUNDRED THIRTY-ONE OF THIS ARTICLE. FOR
PURPOSES OF DETERMINING ANY AMOUNTS THAT WOULD HAVE BEEN RETURNED TO
POLICY HOLDERS FOR LARGE GROUP HEALTH INSURANCE POLICY FORMS, THE SUPER-
INTENDENT SHALL DETERMINE A LOSS RATIO COMPARABLE TO THOSE THAT APPLY TO
INDIVIDUAL AND SMALL GROUP HEALTH INSURANCE POLICY FORMS PURSUANT TO
SECTION THREE THOUSAND TWO HUNDRED THIRTY-ONE OF THIS ARTICLE. AMOUNTS
DUE UNDER THIS SECTION SHALL BE PAID BY MAY FIRST OF THE YEAR FOLLOWING
THE CALENDAR YEAR IN WHICH A LOSS RATIO REQUIREMENT WAS NOT SATISFIED.
THE INSTRUCTIONS AND FORMAT FOR CALCULATING AND REPORTING LOSS RATIOS
SHALL BE THE SAME AS THOSE THAT APPLY TO SECTION THREE THOUSAND TWO
HUNDRED THIRTY-ONE OF THIS ARTICLE. FOR PURPOSES OF THIS SECTION, THE
SUPERINTENDENT MAY DETERMINE THE LOSS RATIO TO APPLY TO LARGE GROUP
HEALTH INSURANCE POLICY FORMS SO THAT SUCH LOSS RATIO IS COMPARABLE TO
THOSE THAT APPLY TO INDIVIDUAL HEALTH INSURANCE POLICY FORMS AND SMALL
A. 3537 3
GROUP HEALTH INSURANCE POLICY FORMS PURSUANT TO THIS SECTION. THE SUPER-
INTENDENT SHALL HAVE AUTHORITY TO AUDIT DATA, IMPOSE PENALTIES FOR
NONCOMPLIANCE WITH THIS SECTION CONSISTENT WITH AUTHORITY PROVIDED TO
THE SUPERINTENDENT IN OTHER PROVISIONS OF THIS CHAPTER, AND PROMULGATE
REGULATIONS TO IMPLEMENT THIS SECTION.
S 4. The insurance law is amended by adding a new section 4328 to read
as follows:
S 4328. REINVESTMENT IN HEALTH CARE. BEGINNING IN CALENDAR YEAR TWO
THOUSAND TEN, IF THE LOSS RATIO FOR (A) AN INDIVIDUAL DIRECT PAYMENT
CONTRACT FORM IS LESS THAN EIGHTY-THREE PERCENT, (B) A SMALL GROUP OR
SMALL GROUP REMITTANCE CONTRACT FORM IS LESS THAN SEVENTY-EIGHT PERCENT,
OR (C) A LARGE GROUP CONTRACT FORM IS LESS THAN EIGHTY-SIX PERCENT OR
SUCH HIGHER PERCENTAGE AS DETERMINED BY THE SUPERINTENDENT PURSUANT TO
THIS SECTION, A CORPORATION SUBJECT TO THE PROVISIONS OF THIS ARTICLE
SHALL PAY TO THE COMMISSIONER OF HEALTH OR THE COMMISSIONER OF HEALTH'S
DESIGNEE A PERCENT OF THE AGGREGATE PREMIUMS EARNED FOR THE CONTRACT
FORM IN THE PREVIOUS CALENDAR YEAR EQUAL TO THE DIFFERENCE BETWEEN THE
MINIMUM LOSS RATIO FOR THE POLICY FORM AS STATED IN THIS SECTION AND THE
ACTUAL LOSS RATIO; PROVIDED HOWEVER, THAT SUCH AMOUNT SHALL BE OFFSET BY
ANY AMOUNT REQUIRED TO BE RETURNED TO CONTRACT HOLDERS IN ACCORDANCE
WITH SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS ARTICLE. FOR
PURPOSES OF DETERMINING ANY AMOUNTS THAT WOULD HAVE BEEN RETURNED TO
CONTRACT HOLDERS FOR LARGE GROUP CONTRACT FORMS, THE SUPERINTENDENT
SHALL DETERMINE A LOSS RATIO COMPARABLE TO THOSE THAT APPLY TO INDIVID-
UAL, SMALL GROUP AND SMALL GROUP REMITTANCE CONTRACT FORMS PURSUANT TO
SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS ARTICLE. AMOUNTS DUE
UNDER THIS SECTION SHALL BE PAID BY MAY FIRST OF THE YEAR FOLLOWING THE
CALENDAR YEAR IN WHICH THE LOSS RATIO REQUIREMENT WAS NOT SATISFIED. THE
INSTRUCTIONS AND FORMAT FOR CALCULATING AND REPORTING LOSS RATIOS SHALL
BE THE SAME AS THOSE THAT APPLY TO SECTION FOUR THOUSAND THREE HUNDRED
EIGHT OF THIS ARTICLE. FOR PURPOSES OF THIS SECTION, THE SUPERINTENDENT
MAY DETERMINE THE LOSS RATIO TO APPLY TO LARGE GROUP CONTRACT FORMS SO
THAT SUCH LOSS RATIO IS COMPARABLE TO THOSE THAT APPLY TO INDIVIDUAL
DIRECT PAY, SMALL GROUP AND SMALL GROUP REMITTANCE CONTRACT FORMS PURSU-
ANT TO THIS SECTION. THE SUPERINTENDENT SHALL HAVE AUTHORITY TO AUDIT
DATA, IMPOSE PENALTIES FOR NONCOMPLIANCE WITH THIS SECTION CONSISTENT
WITH AUTHORITY PROVIDED TO THE SUPERINTENDENT IN OTHER PROVISIONS OF
THIS CHAPTER, AND PROMULGATE REGULATIONS TO IMPLEMENT THIS SECTION.
S 5. This act shall take effect immediately.