S T A T E O F N E W Y O R K
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4640
2011-2012 Regular Sessions
I N A S S E M B L Y
February 4, 2011
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Introduced by M. of A. BARCLAY, KOLB, OAKS, GIGLIO, REILICH, MOLINARO --
Multi-Sponsored by -- M. of A. BURLING, CALHOUN, CONTE, CROUCH, FINCH,
HAWLEY, SAYWARD, TEDISCO -- 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 (s) to read as follows:
(S) 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.
LBD08675-01-1
A. 4640 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 (n) to read as follows:
(N) 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. 4640 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.