S T A T E O F N E W Y O R K
________________________________________________________________________
6960
I N S E N A T E
April 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 allowing for the use
of an affiliate company to meet certain obligations of an insurer
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subparagraph (A) of paragraph 5 of subsection (c) of
section 3216 of the insurance law, as amended by section 46-b of part D
of chapter 56 of the laws of 2013, is amended to read as follows:
(A) Any family policy providing hospital or surgical expense insurance
(but not including such insurance against accidental injury only) shall
provide that, in the event such insurance on any person, other than the
policyholder, is terminated because the person is no longer within the
definition of the family as set forth in the policy but before such
person has attained the limiting age, if any, for coverage of adults
specified in the policy, such person shall be entitled to have issued to
that person by the insurer, without evidence of insurability, upon
application therefor and payment of the first premium, within sixty days
after such insurance shall have terminated, an individual conversion
policy that contains the benefits described in paragraph one of
subsection (b) of section four thousand three hundred twenty-eight of
this chapter. The insurer shall offer one policy at each level of cover-
age as defined in section 1302(d) of the affordable care act, 42 U.S.C.
S 18022(d). The individual may choose any such policy offered by the
insurer. PROVIDED, HOWEVER, THE SUPERINTENDENT MAY, AFTER GIVING DUE
CONSIDERATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY AN
INSURER FOR THE INSURER TO SATISFY THE REQUIREMENTS OF THIS SUBPARAGRAPH
THROUGH THE OFFERING OF POLICIES THAT COMPLY WITH THIS SUBPARAGRAPH BY
ANOTHER INSURER, CORPORATION OR HEALTH MAINTENANCE ORGANIZATION WITHIN
THE INSURER'S HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF
THIS CHAPTER. The conversion privilege afforded herein shall also be
available upon the divorce or annulment of the marriage of the policy-
holder to the former spouse of such policyholder.
S 2. Paragraph 2 of subsection (g) of section 3216 of the insurance
law is amended by adding a new subparagraph (E) to read as follows:
(E) THE SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDERATION TO THE
PUBLIC INTEREST, APPROVE A REQUEST MADE BY AN INSURER FOR THE INSURER TO
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14588-01-4
S. 6960 2
SATISFY THE REQUIREMENTS OF SUBPARAGRAPH (C) OF THIS PARAGRAPH THROUGH
THE OFFERING OF POLICIES AT EACH LEVEL OF COVERAGE AS DEFINED IN SECTION
1302(D) OF THE AFFORDABLE CARE ACT, 42 U.S.C. S 18022(D) THAT CONTAINS
THE BENEFITS DESCRIBED IN PARAGRAPH ONE OF SUBSECTION (B) OF SECTION
FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT OF THIS CHAPTER BY ANOTHER
INSURER, CORPORATION OR HEALTH MAINTENANCE ORGANIZATION WITHIN THE
INSURER'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF
THIS CHAPTER.
S 3. Subsection (g) of section 3221 of the insurance law, as added by
section 49 of part D of chapter 56 of the laws of 2013, is amended to
read as follows:
(g) For conversion purposes, an insurer shall offer to the employee or
member a policy at each level of coverage as defined in section 1302(d)
of the affordable care act, 42 U.S.C. S 18022(d) that contains the bene-
fits described in paragraph one of subsection (b) of section four thou-
sand three hundred twenty-eight of this chapter. PROVIDED, HOWEVER, THE
SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTER-
EST, APPROVE A REQUEST MADE BY AN INSURER FOR THE INSURER TO SATISFY THE
REQUIREMENTS OF THIS SUBSECTION AND SUBSECTIONS (E) AND (F) OF THIS
SECTION THROUGH THE OFFERING OF POLICIES THAT COMPLY WITH THIS
SUBSECTION BY ANOTHER INSURER, CORPORATION OR HEALTH MAINTENANCE ORGAN-
IZATION WITHIN THE INSURER'S HOLDING COMPANY SYSTEM, AS DEFINED IN ARTI-
CLE FIFTEEN OF THIS CHAPTER.
S 4. Item (i) of subparagraph (C) of paragraph 2 of subsection (c) of
section 4304 of the insurance law, as amended by section 43-a of part D
of chapter 56 of the laws of 2013, is amended to read as follows:
(i) Discontinuance of a class of contract upon not less than five
months' prior written notice. In exercising the option to discontinue
coverage pursuant to this item, the corporation must act uniformly with-
out regard to any health status-related factor of enrolled individuals
or individuals who may become eligible for such coverage and must offer
to subscribers or group remitting agents, as may be appropriate, the
option to purchase all other individual health insurance coverage
currently being offered by the corporation to applicants in that market.
PROVIDED, HOWEVER, THE SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDER-
ATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY A CORPORATION
FOR THE CORPORATION TO SATISFY THE REQUIREMENTS OF THIS ITEM THROUGH THE
OFFERING OF CONTRACTS AT EACH LEVEL OF COVERAGE AS DEFINED IN SECTION
1302(D) OF THE AFFORDABLE CARE ACT, 42 U.S.C. S 18022(D) THAT CONTAINS
THE BENEFITS DESCRIBED IN PARAGRAPH ONE OF SUBSECTION (B) OF SECTION
FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT OF THIS CHAPTER BY ANOTHER
CORPORATION, INSURER OR HEALTH MAINTENANCE ORGANIZATION WITHIN THE
CORPORATION'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN
OF THIS CHAPTER.
S 5. Paragraph 1 of subsection (e) of section 4304 of the insurance
law, as amended by section 51 of part D of chapter 56 of the laws of
2013, is amended to read as follows:
(1) If any such contract is terminated in accordance with the
provisions of paragraph one of subsection (c) of this section, or any
such contract is terminated because of a default by the remitting agent
in the payment of premiums not cured within the grace period and the
remitting agent has not replaced the contract with similar and contin-
uous coverage for the same group whether insured or self-insured, or any
such contract is terminated in accordance with the provisions of subpar-
agraph (E) of paragraph two of subsection (c) of this section, or if an
individual other than the contract holder is no longer covered under a
S. 6960 3
"family contract" because the individual is no longer within the defi-
nition set forth in the contract, or a spouse is no longer covered under
the contract because of divorce from the contract holder or annulment of
the marriage, or any such contract is terminated because of the death of
the contract holder, then such individual, former spouse, or in the case
of the death of the contract holder the surviving spouse or other depen-
dents of the deceased contract holder covered under the contract, as the
case may be, shall be entitled to convert, without evidence of insura-
bility, upon application therefor and the making of the first payment
thereunder within sixty days after the date of termination of such
contract, to a contract that contains the benefits described in para-
graph one of subsection (b) of section four thousand three hundred twen-
ty-eight of this chapter. The corporation shall offer one contract at
each level of coverage as defined in section 1302(d) of the affordable
care act, 42 U.S.C. S 18022(d). The individual may choose any such
contract offered by the corporation. PROVIDED, HOWEVER, THE SUPERINTEN-
DENT MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTEREST, APPROVE
A REQUEST MADE BY A CORPORATION FOR THE CORPORATION TO SATISFY THE
REQUIREMENTS OF THIS PARAGRAPH THROUGH THE OFFERING OF CONTRACTS THAT
COMPLY WITH THIS PARAGRAPH BY ANOTHER CORPORATION, INSURER OR HEALTH
MAINTENANCE ORGANIZATION WITHIN THE CORPORATION'S SAME HOLDING COMPANY
SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF THIS CHAPTER. The effective
date of the coverage provided by the converted direct payment contract
shall be the date of the termination of coverage under the contract from
which conversion was made.
S 6. Subparagraph (A) of paragraph 1 of subsection (d) of section 4305
of the insurance law, as amended by section 52 of part D of chapter 56
of the laws of 2013, is amended to read as follows:
(A) A group contract issued pursuant to this section shall contain a
provision to the effect that in case of a termination of coverage under
such contract of any member of the group because of (i) termination for
any reason whatsoever of the member's employment or membership, or (ii)
termination for any reason whatsoever of the group contract itself
unless the group contract holder has replaced the group contract with
similar and continuous coverage for the same group whether insured or
self-insured, the member shall be entitled to have issued to the member
by the corporation, without evidence of insurability, upon application
therefor and payment of the first premium made to the corporation within
sixty days after termination of the coverage, an individual direct
payment contract, covering such member and the member's eligible depen-
dents who were covered by the group contract, which provides coverage
that contains the benefits described in paragraph one of subsection (b)
of section four thousand three hundred twenty-eight of this chapter. The
corporation shall offer one contract at each level of coverage as
defined in section 1302(d) of the affordable care act, 42 U.S.C. S
18022(d). The member may choose any such contract offered by the corpo-
ration. PROVIDED, HOWEVER, THE SUPERINTENDENT MAY, AFTER GIVING DUE
CONSIDERATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY A CORPO-
RATION FOR THE CORPORATION TO SATISFY THE REQUIREMENTS OF THIS SUBPARA-
GRAPH THROUGH THE OFFERING OF CONTRACTS THAT COMPLY WITH THIS SUBPARA-
GRAPH BY ANOTHER CORPORATION, INSURER OR HEALTH MAINTENANCE ORGANIZATION
WITHIN THE CORPORATION'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN
ARTICLE FIFTEEN OF THIS CHAPTER.
S 7. This act shall take effect immediately.