Senate Bill S3508

                                
 
BILL NUMBER: S3508

SPONSOR: BRESLIN
 
TITLE OF BILL:  An act to amend the insurance law, in relation to
adjusting claims on behalf of municipal cooperative health benefit plans

 
PURPOSE:

This bill excepts health insurers adjusting claims on behalf of a munic-
ipal cooperative health benefit plan from the definition of "independent
adjuster."

 
SUMMARY OF PROVISIONS:

Section one amends subsection (B) of section (1) of paragraph (g) of
section 2101 of the insurance law to provide that a health insurer is
not acting as an independent adjuster when it adjusts claims on behalf
of a municipal cooperative health benefit plan certified pursuant to
article forty seven of the insurance law.

Section 2 sets the effective date.
              

 
JUSTIFICATION:

Article 47 of the insurance law includes a number of provisions that
together permit municipalities to form a cooperative health benefit
plan. Of particular significance is the requirement that the municipal
cooperative health benefit plan be "fully insured." Section 4702 of the
Insurance Law provides that "fully insured means that all benefits paya-
ble pursuant to a municipal cooperative health benefit plan are guaran-
teed under a contract of policy of insurance delivered in this state and
issued by an insurance company authorized to do accident and health
insurance in this state, an article forty-three corporation, or a health
maintenance organization."

The Department of Financial Services has taken the position that when a
health insurer adjusts claims on behalf of a municipal cooperative
health benefit plan certified pursuant to Article 47 of the Insurance
Law, the health insurer is acting as an independent adjuster and must be
licensed as such. To require a health insurer to be separately licensed
as an independent adjuster in order to adjust claims under a fully
insured contract issued by the health insurer is an unreasonable and
unnecessary result. This bill would clarify that a health insurer issu-
ing a fully insured contract to a municipal cooperative health benefit
plan need not be licensed as an independent adjuster in order to adjust
claims under its own contract.

 
LEGISLATIVE HISTORY:

S.4242 of 2017-18
S.7651 of 2016, passed both houses.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.