senate Bill S2886

2013-2014 Legislative Session

Relates to pre-existing condition provisions for group and blanket disability policies

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to insurance
returned to senate
died in assembly
Jun 10, 2013 referred to insurance
delivered to assembly
passed senate
Jun 05, 2013 advanced to third reading
Jun 04, 2013 2nd report cal.
Jun 03, 2013 1st report cal.947
Jan 24, 2013 referred to insurance

Votes

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Co-Sponsors

S2886 - Bill Details

Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd §3234, Ins L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S2557
2009-2010: S4770

S2886 - Bill Texts

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Relates to pre-existing condition provisions for group and blanket disability policies which excludes coverage under the policy for a disability commencing during the twelve months following the effective date of coverage for the covered person.

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BILL NUMBER:S2886

TITLE OF BILL: An act to amend the insurance law, in relation to pre-
existing condition provisions for group and blanket disability policies

PURPOSE: This bill would amend § 3234 of the insurance law to require
disability income insurers to make available to employers who purchase
group or blanket disability insurance the option of a contract with a
preexisting condition exclusion provision This bill would require insur-
ers to offer employers a group disability contract with a provision that
establishes that a pre-existing condition that occurs prior to an
employee's effective date of coverage, and results in the disability of
that employee within the first twelve months after the effective date of
coverage, would be excluded from coverage. Insurers would also be
required to offer to employers a contract that would limit but not
exclude disability coverage for pre-existing conditions Employers could
choose which of these options they want in their contract.

SUMMARY OF PROVISIONS: Section 1 of the bill amends § 3234 of the insur-
ance law by adding a new subsection (b) to require that insurers must
make available to employers a pre-existing condition exclusion provision
in all group and blanket disability Contracts being, offered. Such
exclusion would provide that a pre-existing condition that occurs prior
to an employee's effective date of coverage, and results in the disabil-
ity of that employee within the first twelve months after the effective
date of coverage, would be excluded from coverage for loss of income.
Section 1 also re-letters current subsection (b) as new subsection (c)
and makes conforming changes to the new subsection.

JUSTIFICATION: Due to a recent Court of Appeals decision (Benesowitz v
Metropolitan Life Insurance Company, 8 NY3d 661 2007) which reinterpret-
ed § 3234 (a) (2) of the insurance law, insurers and businesses in New
York were required to revise what was previously considered to be a
preexisting condition exclusion provision in group disability income
insurance contracts and instead apply it as a limitation on coverage
only for up to twelve months following the employee's effective date of
coverage. As a result, employees who become disabled due to a pre-exist-
ing condition are no longer excluded from coverage for the life of that
claim. This decision permits some seriously ill employees to obtain
coverage and then almost immediately file a claim and will result, in
some cases, in an increase in the premiums charged for group disability
income policies in New York These increased rates would be for a type of
coverage that can already be quite costly far businesses/employees to
afford and any increase in rates might preclude this coverage from being
purchased or continued altogether.

Giving employers the choice of which option to purchase will result in
more New Yorkers being offered disability coverage. Those companies that
can afford the more expensive benefit could elect to provide that, wher-
eas those who cannot can purchase the contract with the less expensive
benefit option.

LEGISLATIVE HISTORY: S.2557 of 2011-12; S.4770 of 2009-10

FISCAL IMPLICATIONS: None to the State.

EFFECTIVE DATE: Immediately.

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

                                  2886

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 24, 2013
                               ___________

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 pre-existing condition
  provisions for group and blanket disability policies

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

  Section  1.  Subsection  (b)  of section 3234 of the insurance law, as
added by chapter 650 of the laws of 1993, is amended to read as follows:
  (b)  AN INSURER THAT OFFERS A POLICY IN CONFORMANCE WITH PARAGRAPH TWO
OF SUBSECTION (A) OF THIS SECTION  MUST  ALSO  MAKE  AVAILABLE,  AND  IF
REQUESTED  BY THE POLICYHOLDER, PROVIDE A GROUP OR BLANKET POLICY WITH A
PRE-EXISTING CONDITION PROVISION WHICH EXCLUDES COVERAGE UNDER THE POLI-
CY FOR A DISABILITY COMMENCING DURING THE TWELVE  MONTHS  FOLLOWING  THE
EFFECTIVE DATE OF COVERAGE FOR THE COVERED PERSON.
  (C) Nothing [herein] IN THIS SECTION shall be construed to prohibit or
restrict  an  insurer from utilizing other forms of underwriting for the
members of the group in lieu of, or in  addition  to,  the  pre-existing
condition provision described in subsection (a) OR (B) of this section.
  S 2. This act shall take effect immediately.





 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06548-01-3

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