senate Bill S3464

2013-2014 Legislative Session

Relates to exempting certain health insurance policies from certain coverage requirements

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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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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to insurance
Feb 04, 2013 referred to insurance

S3464 - Bill Details

Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd ยงยง3216, 4304 & 4322, Ins L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S2375
2009-2010: S3047

S3464 - Bill Texts

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Exempts policies intended for use in health savings account pursuant to section 1201 of the federal medicare prescription drug, improvement and modernization act of 2003 from certain coverage requirements.

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BILL NUMBER:S3464

TITLE OF BILL: An act to amend the insurance law, in relation to cover-
age requirements of certain health insurance plans

PURPOSE: The purpose of this legislation is to help individuals and
businesses afford the skyrocketing cost of health insurance, by making
it easier for them to purchase high-deductible health plans (HDHPs) that
are coupled with health savings accounts (HSAs).

SUMMARY OF PROVISIONS: Sections 3216, 4304, and 4322 of the insurance
law are amended to authorize HMOs and insurers to offer HDHPs coupled
with HSAs. Such policies were created under the federal Medicare
Prescription Drug, Improvement, and Modernization Act of 2003

EXISTING LAW: Current law prohibits HDHPs and HSAs from being offered by
HMOs and in the individual market.

JUSTIFICATION: Individuals and employers are currently struggling with
the skyrocketing cost of health insurance in New York. Inevitably, as
health care costs increase, so do the number of uninsured in the state.
There are already nearly 3 million New Yorkers without health insurance,
and we can ill afford any more.

The federal Medicare reform law, signed in December of 2003, established
HSAs which must be coupled with a HDHP that has at least a $1100 deduct-
ible for individuals and $2200 for family coverage. HDHPs offer regular
medical coverage, but cost significantly less than traditional policies
because of their higher deductibles HSAs provide the consumer with maxi-
mum choice and control over where their health care dollars are spent,
by giving them a means to set aside funds to pay for out-of-pocket
medical expenses Consumers, not their employer or insurance company,
should determine how and where to spend their health care dollars.
Authorization of such policies in New York would allow a range of cover-
age options and opportunities combined with funds from an HSA. The
consumer would be assured protection from costly health risk and have
access to funds to pay for care from any provider that is not covered by
the policy.

HDHPs and HSAs are especially attractive to small businesses, as they
allow employers to offer medical coverage to their employees at a price
they can afford. Allowing more employees and individuals to purchase
HDHPs and HSAs will allow for maximum choice and flexibility in design-
ing a plan that meets their needs - both from a health care and a finan-
cial point of view.

LEGISLATIVE. HISTORY: S.2375 of 2011-12; S.3047 of 2009-10; S.2968 of
2007-08

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: January 1, 2014.

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

                                  3464

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 4, 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 coverage  requirements
  of certain 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.
  S  2. 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08122-01-3

S. 3464                             2

IN A HEALTH SAVINGS ACCOUNT PURSUANT TO  SECTION  1201  OF  THE  FEDERAL
MEDICARE PRESCRIPTION DRUG, IMPROVEMENT AND MODERNIZATION ACT OF 2003.
  S  3.  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
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.  The enrollee contracts issued  by  a  health
maintenance  organization  under  this section and section four thousand
three hundred  twenty-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 individual direct payment contracts issued prior to January
first, nineteen hundred ninety-six or prohibit health maintenance organ-
izations from terminating individual  direct  payment  contracts  issued
prior to January first, nineteen hundred ninety-six.
  S 4. This act shall take effect January 1, 2014.

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