S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4545
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 4, 2025
                                ___________
 
 Introduced by M. of A. JENSEN -- read once and referred to the Committee
   on Health
 
 AN  ACT  to  amend the tax law and the public health law, in relation to
   providing expanded enrollment through New York state of health through
   tax returns (Part A); to amend the public health law, in  relation  to
   allowing  for  enrollment  through the New York state of health at any
   time for first-time enrollees (Part B); to amend the insurance law and
   the legislative law, in relation to creating the New York health bene-
   fit and cost commission; and to repeal section 213  of  the  insurance
   law  relating thereto (Part C); and to amend the public health law and
   the tax law, in relation to establishing New York health care  savings
   accounts to expand and incentivize purchasing private health insurance
   (Part D)
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "real choice health act".
   §  2. Legislative intent. The Legislature recognizes the importance of
 ensuring a robust and responsive healthcare system that meets the  needs
 and preferences of its residents. Although significant improvements have
 been  made  to  reduce  the  number of uninsured New Yorkers and control
 costs, there is still substantial work to be done. However, despite  the
 need  to  ensure  that more New Yorkers are insured and can afford their
 healthcare costs, preserving individual choices in healthcare  is  para-
 mount.  Although  some  argue that a single-payer system in the State of
 New York would improve access and reduce costs, doing so would eliminate
 important healthcare choices for many New Yorkers  by  creating  blanket
 State  coverage,  require  significant  tax increases on individuals and
 businesses in New York, which would further perpetuate our  outmigration
 problem,  create potential domestic migration of individuals with costly
 adverse health issues, eliminate jobs by dismantling the  health  insur-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08297-01-5
              

 A. 4545                             2
 
 ance  industry  and  lead to voluntary unemployment without the need for
 employer-based coverage and require continued and expanded  reliance  on
 the  Federal government for funding and waivers. The single-payer system
 would  place the responsibility of healthcare for all New Yorkers solely
 in the hands of the State, exposing healthcare needs to even more  poli-
 tical pressures. New York State government has proven that it has diffi-
 culty  administrating  large programs effectively and without mismanage-
 ment, with both the existing Medicaid program and the roll-out of  legal
 recreational cannabis serving as important examples.
   Moving  forward,  New  York should continue to improve on the positive
 changes in the current system that have been made  thus  far.  Doing  so
 would continue to enable a competitive healthcare system that encourages
 innovation  and  drives continuous improvements in care, ensuring access
 to cutting-edge treatments and  technologies  for  all  residents.  This
 system  would ensure that the opinions and preferences of the population
 would continue to shape the healthcare system.
   Therefore, this proposal focuses on preserving individual  choices  by
 improving access to health insurance enrollment through expanded enroll-
 ment  period and enhanced outreach, creating a State process for analyz-
 ing costs before significant health  insurance  changes  are  made,  and
 incentivizing  individuals  to purchase health insurance and reduce out-
 of-pocket costs by creating a New York health care savings account.
   § 3. This act enacts into law major components of legislation  provid-
 ing  expanded  enrollment  through  New York state of health through tax
 returns, allowing for enrollment through the New York state of health at
 any time for first-time enrollees, expanding New York  state  of  health
 navigator program, creating the New York health benefit and cost commis-
 sion,  and  establishing New York health care savings accounts to expand
 and incentivize purchasing private health insurance. Each  component  is
 wholly  contained  within  a  Part  identified as Parts A through D. The
 effective date for each particular provision contained within such  Part
 is  set  forth  in  the  last section of such Part. Any provision in any
 section contained within a Part, including the  effective  date  of  the
 Part,  which  makes  reference  to a section "of this act," when used in
 connection with that particular component, shall be deemed to  mean  and
 refer to the corresponding section of the Part in which it is found.
 
                                  PART A
 
   Section  1. The tax law is amended by adding a new section 664 to read
 as follows:
   § 664. HEALTH MARKETPLACE ELIGIBILITY. THE COMMISSIONER SHALL  REQUIRE
 THAT ALL INCOME TAX RETURNS ALLOW THE TAXPAYER TO REQUEST, BY CHECKING A
 BOX,  TO BE INCLUDED ON THE RETURN, THAT THE DEPARTMENT OF HEALTH REVIEW
 RELEVANT AND NECESSARY TAXPAYER DATA IN ORDER TO  PROVIDE  THE  TAXPAYER
 WITH  INFORMATION  RELATED  TO  THEIR ELIGIBILITY FOR HEALTH MARKETPLACE
 PROGRAMS, PLANS, AND AVAILABLE INCENTIVES. ADJACENT TO SUCH  BOX,  THERE
 SHALL  BE  A  STATEMENT  IN  PROMINENT TYPE, "IF YOU CHECK THIS BOX, YOU
 AFFIRM THAT YOU ARE UNINSURED, DO NOT HAVE  EMPLOYER-SPONSORED  COVERAGE
 AVAILABLE,  AND  ARE  (1) REQUESTING THAT THE STATE DEPARTMENT OF HEALTH
 REVIEW NECESSARY PORTIONS OF YOUR TAX  FILING,  (2)  USE  SUCH  DATA  AS
 NECESSARY  TO  MAKE  DETERMINATIONS  AS  TO YOUR ELIGIBILITY FOR MEDICAL
 ASSISTANCE (MEDICAID), THE BASIC HEALTH PLAN (ESSENTIAL PLAN), OR  PLANS
 THROUGH THE NY STATE OF HEALTH AND AVAILABLE INCENTIVES, AND (3) CONTACT
 YOU TO PROVIDE SUCH ELIGIBILITY INFORMATION."
 A. 4545                             3
 
   §  2.  Section 206 of the public health law is amended by adding a new
 subdivision 32 to read as follows:
   32.  THE  COMMISSIONER SHALL CREATE A PROGRAM WITHIN THE DEPARTMENT TO
 ASSIST UNINSURED INDIVIDUALS WITHOUT  EMPLOYER-SPONSORED  COVERAGE  WITH
 ENROLLING IN HEALTH INSURANCE COVERAGE THROUGH STATE INCOME TAX FILINGS.
 THIS PROGRAM SHALL:
   (A)  REVIEW  RELEVANT AND NECESSARY TAXPAYER DATA AUTHORIZED UNDER THE
 TAX LAW WITHIN THIRTY DAYS OF RECEIVING SUCH AUTHORIZATION;
   (B) CONTACT INDIVIDUALS WHO OPT TO HAVE  THEIR  TAX  FILINGS  REVIEWED
 WITHIN THIRTY DAYS OF SUCH REVIEW;
   (C)  DETERMINE  WHETHER  AN INDIVIDUAL IS ELIGIBLE FOR MEDICAL ASSIST-
 ANCE, CHILD HEALTH INSURANCE PLAN, OR BASIC HEALTH PLAN COVERAGE;
   (D) UPON DETERMINING AN INDIVIDUAL IS ELIGIBLE FOR MEDICAL ASSISTANCE,
 CHILD HEALTH INSURANCE PLAN, OR BASIC HEALTH PLAN COVERAGE,  OFFER  SUCH
 INDIVIDUALS AN INVITATION TO SELECT A PLAN, PROVIDED THAT THE INDIVIDUAL
 DOES NOT HAVE EMPLOYER-SPONSORED COVERAGE AVAILABLE; AND
   (E)  IN  THE  CASE  OF  INDIVIDUALS INELIGIBLE FOR MEDICAL ASSISTANCE,
 CHILD HEALTH INSURANCE PLAN, OR BASIC HEALTH PLAN  COVERAGE,  PROVIDE  A
 REFERRAL  TO  A NAVIGATOR CERTIFIED UNDER SUBDIVISION FIFTEEN OF SECTION
 TWO HUNDRED SIXTY-EIGHT-C OF THIS CHAPTER.
   § 3. This act shall take effect on the first of January next  succeed-
 ing the date on which it shall have become a law.
 
                                  PART B

   Section 1. Subdivisions 5 and 15 of section 268-c of the public health
 law,  as added by section 2 of part T of chapter 57 of the laws of 2019,
 are amended to read as follows:
   5. Maintain enrollment periods in the best interest of qualified indi-
 viduals consistent with  federal  and  state  law.  SUCH  PERIODS  SHALL
 INCLUDE, BUT MAY NOT BE LIMITED TO:
   (A)  ALLOWING  SPECIAL  ENROLLMENT AT ANY TIME FOR CURRENTLY UNINSURED
 INDIVIDUALS ENROLLING IN THE MARKETPLACE FOR THE FIRST TIME WHO  DO  NOT
 HAVE EMPLOYER-SPONSORED COVERAGE AVAILABLE; AND
   (B)  ALLOWING  SPECIAL ENROLLMENT FOR UNINSURED INDIVIDUALS WHO DO NOT
 HAVE EMPLOYER-SPONSORED COVERAGE AVAILABLE ENROLLING THROUGH THE  ESTAB-
 LISHED INCOME TAX RETURN PROCESS.
   15.  Operate  a  program  under which the Marketplace awards grants to
 entities to serve as navigators in accordance  with  applicable  federal
 law and regulations adopted thereunder, and/or a program under which the
 Marketplace awards grants to entities to provide community based enroll-
 ment assistance in accordance with requirements developed by the Market-
 place;  and/or  a program under which the Marketplace certifies New York
 state licensed producers to provide assistance to  eligible  individuals
 and/or  small  employers  pursuant  to  federal or state law. SUBJECT TO
 APPROPRIATION, ADDITIONAL GRANTS SHALL BE AWARDED ON AN ANNUAL BASIS  TO
 PROVIDERS  IN  THE CITY OF NEW YORK AND COUNTIES WHERE THE RATE OF UNIN-
 SURED INDIVIDUALS BELOW FOUR HUNDRED  PERCENT  OF  THE  FEDERAL  POVERTY
 LEVEL IS ABOVE THE STATEWIDE AVERAGE.
   §  2. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.
 
                                  PART C
 
   Section 1. The insurance law is amended by adding a new section 3221-a
 to read as follows:
 A. 4545                             4
 
   § 3221-A. HEALTH BENEFIT AND COST COMMISSION. (A) FOR THE PURPOSES  OF
 THIS  SECTION, "MANDATED HEALTH BENEFIT" SHALL MEAN ANY REQUIREMENT THAT
 INDIVIDUAL, GROUP OR BLANKET ACCIDENT AND HEALTH INSURANCE  POLICIES  OR
 CONTRACTS ISSUED BY HOSPITAL OR HEALTH SERVICE CORPORATIONS INCLUDE:
   (1)  COVERAGE  FOR  SPECIFIC HEALTH SERVICES, TREATMENT, TESTS, DRUGS,
 SUPPLIES, OR EQUIPMENT TO DIAGNOSE OR  TREAT  A  PARTICULAR  DISEASE  OR
 CONDITION; AND
   (2)  COVERAGE  FOR  SERVICES  OF  SPECIFIC  PROVIDERS  OF  HEALTH CARE
 SERVICES.
   (B) THERE IS HEREBY CREATED A COMMISSION WITHIN THE DEPARTMENT, TO  BE
 KNOWN AS THE "NEW YORK HEALTH BENEFIT AND COST COMMISSION" CONSISTING OF
 THIRTEEN  MEMBERS  TO  BE APPOINTED AS FOLLOWS: THREE TO BE APPOINTED BY
 THE GOVERNOR, THREE TO BE APPOINTED BY THE TEMPORARY  PRESIDENT  OF  THE
 SENATE,  THREE  TO  BE APPOINTED BY THE SPEAKER OF THE ASSEMBLY, AND ONE
 EACH TO BE APPOINTED BY THE MINORITY LEADER OF THE SENATE AND THE ASSEM-
 BLY. THE SUPERINTENDENT AND THE COMMISSIONER OF HEALTH, OR THEIR  DESIG-
 NATED  REPRESENTATIVES,  SHALL  ALSO SERVE AS MEMBERS OF THE COMMISSION.
 THE MEMBERS SHALL ELECT A PERSON TO SERVE AS CHAIR.
   (C) EACH MEMBER SHALL SERVE FOR A TERM OF FOUR YEARS. VACANCIES  SHALL
 BE APPOINTED IN THE SAME MANNER AS ORIGINAL APPOINTMENTS. THE MEMBERS OF
 THE  COMMISSION  SHALL  RECEIVE  NO  COMPENSATION FOR THEIR SERVICES BUT
 SHALL BE ALLOWED ACTUAL AND NECESSARY EXPENSES INCURRED IN THE  PERFORM-
 ANCE  OF THEIR DUTIES. THE COMMISSION MAY REQUEST AND SHALL RECEIVE FROM
 ANY DEPARTMENT, BOARD, BUREAU,  COMMISSION,  OFFICE,  AGENCY,  OR  OTHER
 INSTRUMENTALITY OF THE STATE SUCH FACILITIES, ASSISTANCE, AND DATA AS IT
 DEEMS  NECESSARY OR DESIRABLE FOR THE PROPER EXECUTION OF ITS POWERS AND
 DUTIES. THE COMMISSION MAY SEEK THE ASSISTANCE AND ADVICE OF ANY PERSON,
 ORGANIZATION, OR ENTITY AS MAY BE RELEVANT OR NECESSARY AND MAY HIRE  OR
 CONTRACT  WITH  ANY SUCH PERSON, ORGANIZATION, OR ENTITY. THE COMMISSION
 SHALL HAVE THE POWER TO HOLD PUBLIC HEARINGS AND  SOLICIT  TESTIMONY  ON
 ANY MATTER IT DEEMS RELEVANT TO CARRYING OUT ITS MISSION.
   §  2.  The  legislative law is amended by adding a new section 52-a to
 read as follows:
   § 52-A. REQUIREMENTS WITH RESPECT TO BILLS AFFECTING  MANDATED  HEALTH
 BENEFITS.  1.  FOR  PURPOSES OF THIS SECTION, THE TERMS "MANDATED HEALTH
 BENEFITS" SHALL HAVE THE SAME MEANINGS THAT THEY HAVE IN  SECTION  THREE
 THOUSAND TWO HUNDRED TWENTY-ONE-A OF THE INSURANCE LAW.
   2.  IN  ADDITION TO ANY OTHER FISCAL NOTE REQUIRED, A BILL THAT ENACTS
 OR AMENDS ANY LAW IN RELATION TO  MANDATING  HEALTH  BENEFITS  SHALL  BE
 ACCOMPANIED BY AN IMPACT STATEMENT CONSISTING OF A FISCAL NOTE SEPARATE-
 LY STATING THE ESTIMATED COST OF THE HEALTH BENEFITS MANDATE IN THE BILL
 FOR  THE  FIRST  YEAR  IT IS TO BE IN EFFECT AND FOR THE NEXT SUCCEEDING
 YEAR, AS WELL AS A STATEMENT OF THE PUBLIC PURPOSE TO BE SERVED BY  SUCH
 MANDATE.
   3. THE COMMISSION SHALL CONDUCT A REVIEW AND PUBLIC COMMENT PERIOD AND
 ISSUE  A  REPORT  RELATING  TO  LEGISLATION  THAT WOULD ENACT A MANDATED
 HEALTH BENEFIT. SUCH ISSUANCE SHALL:
   (A) CONSIDER AND SUMMARIZE ALL  PUBLIC  COMMENT  AND  ALL  SCIENTIFIC,
 MEDICAL,  AND ACTUARIAL DATA AND INFORMATION PROVIDED OR OBTAINED RELAT-
 ING TO THE PROPOSED MANDATED HEALTH BENEFIT;
   (B) REPORT ON PUBLIC AND PATIENT HEALTH ISSUES, INCLUDING:
   (I) THE EXTENT TO WHICH THE PROPOSED MANDATED HEALTH BENEFIT IS AVAIL-
 ABLE AND UTILIZED BY THE STATE'S POPULATION  AND  THE  LEVEL  OF  PUBLIC
 DEMAND FOR THE BENEFIT;
   (II)  THE  EXTENT  TO  WHICH  THE  PROPOSED MANDATED HEALTH BENEFIT IS
 ALREADY A COVERED HEALTH BENEFIT;
 A. 4545                             5
 
   (III) IF COVERAGE IS NOT GENERALLY AVAILABLE, THE EXTENT TO WHICH  THE
 LACK  OF  COVERAGE  RESULTS  IN PERSONS BEING UNABLE TO OBTAIN NECESSARY
 HEALTH CARE AND RESULTS IN FINANCIAL HARDSHIP  FOR  THOSE  NEEDING  SUCH
 CARE;
   (IV)  PROJECTED  UTILIZATION  RATES  AND  ACCESS TO SERVICE THAT WOULD
 RESULT FROM THE PROPOSED MANDATED HEALTH BENEFIT;
   (V) WHETHER THE PROPOSED MANDATED HEALTH BENEFIT IS  A  MEDICAL  OR  A
 BROADER SOCIAL NEED AND WHETHER IT IS CONSISTENT WITH THE ROLE OF HEALTH
 INSURANCE AND MANAGED HEALTH CARE; AND
   (VI)  THE  EXTENT  TO  WHICH  THE  PROPOSED MANDATED HEALTH BENEFIT IS
 GENERALLY RECOGNIZED BY THE MEDICAL COMMUNITY  AS  BEING  EFFECTIVE  AND
 EFFICACIOUS, INCLUDING APPROPRIATE REVIEW BY SCIENTIFIC AND MEDICAL PEER
 REVIEW LITERATURE; AND
   (C) REPORT ON ACCESS TO COVERAGE AND ECONOMIC ISSUES, INCLUDING:
   (I) THE IMPACT ON PREMIUMS, RATES, AND COSTS OF HEALTH COVERAGE IN ALL
 AFFECTED MARKETS;
   (II)  THE IMPACT THAT THE PROPOSED MANDATED HEALTH BENEFIT MAY HAVE ON
 THE AVAILABILITY OF OTHER BENEFITS;
   (III) THE IMPACT THAT THE PROPOSED MANDATED HEALTH BENEFIT MAY HAVE ON
 THE AVAILABILITY OF HEALTH COVERAGE IN  EACH  AFFECTED  MARKET  AND  THE
 IMPACT ON THE NUMBER OF PERSONS COVERED THROUGH SELF-INSURED PLANS; AND
   (IV)  REPORT  ON  ANY OTHER MATTER, QUESTION, OR CONCERN RELATING TO A
 MANDATED HEALTH BENEFIT AS MAY BE DETERMINED RELEVANT BY THE  COMMISSION
 OR BY THE PERSON HAVING ISSUED THE REQUEST.
   4.  THE  COMMISSION SHALL ALLOW A THIRTY-DAY PUBLIC COMMENT PERIOD AND
 ISSUE A REPORT TO THE GOVERNOR AND THE LEGISLATURE  WITHIN  NINETY  DAYS
 AFTER RECEIPT OF A WRITTEN REQUEST. THE COMMISSION MAY EXTEND ITS REVIEW
 PERIOD  AND  REPORTING TIME UPON THE CONSENT OF THE PERSON HAVING ISSUED
 THE REQUEST.
   5. THE COMMISSION SHALL REVIEW AND REPORT ON UTILIZATION RATES, PUBLIC
 AND PATIENT HEALTH EFFECTS, AND IMPACT ON PREMIUMS AND ACCESS TO  HEALTH
 CARE AND HEALTH COVERAGE OF ALL MANDATED HEALTH BENEFITS EXISTING ON THE
 EFFECTIVE DATE OF THIS SECTION.
   § 3. Section 213 of the insurance law is REPEALED.
   § 4. This act shall take effect immediately.
 
                                  PART D
 
   Section  1.  Short  title. This act shall be known and may be cited as
 the "New York health care savings act".
   § 2. The public health law is amended by adding a new article 48-A  to
 read as follows:
                               ARTICLE 48-A
                NEW YORK STATE HEALTH CARE SAVINGS PROGRAM
 SECTION 4850. PROGRAM ESTABLISHED.
         4851. PURPOSES.
         4852. DEFINITIONS.
         4853. FUNCTIONS OF THE COMPTROLLER AND THE CORPORATION.
         4854. POWERS OF THE COMPTROLLER.
         4855. PROGRAM  REQUIREMENTS;  NEW YORK STATE HEALTH CARE SAVINGS
                 ACCOUNT.
         4856. PROGRAM LIMITATIONS; NEW YORK STATE  HEALTH  CARE  SAVINGS
                 ACCOUNT.
   §  4850. PROGRAM ESTABLISHED. THERE IS HEREBY ESTABLISHED THE NEW YORK
 STATE HEALTH CARE SAVINGS PROGRAM AND SUCH PROGRAM SHALL  BE  KNOWN  AND
 MAY BE CITED AS THE "NEW YORK STATE HEALTH CARE SAVINGS PROGRAM".
 A. 4545                             6
 
   §  4851.  PURPOSES.  THE  PURPOSES  OF  THE NEW YORK STATE HEALTH CARE
 SAVINGS PROGRAM SHALL BE TO AUTHORIZE  THE  ESTABLISHMENT  OF  NEW  YORK
 STATE  HEALTH  CARE  SAVINGS  ACCOUNTS AND TO PROVIDE GUIDELINES FOR THE
 MAINTENANCE OF SUCH ACCOUNTS.
   §  4852.  DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1. "ACCOUNT" OR "NEW YORK HEALTH CARE SAVINGS ACCOUNT" SHALL  MEAN  AN
 INDIVIDUAL  OR FAMILY SAVINGS ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE
 PROVISIONS OF THIS ARTICLE.
   2. "ACCOUNT OWNER" SHALL MEAN A PERSON WHO ENTERS INTO A  HEALTH  CARE
 SAVINGS  AGREEMENT PURSUANT TO THE PROVISIONS OF THIS ARTICLE, INCLUDING
 A PERSON WHO ENTERS INTO SUCH AN AGREEMENT AS A FIDUCIARY  OR  AGENT  ON
 BEHALF  OF  A TRUST, ESTATE, PARTNERSHIP, ASSOCIATION, COMPANY OR CORPO-
 RATION. THE ACCOUNT OWNER MAY ALSO BE THE DESIGNATED BENEFICIARY OF  THE
 ACCOUNT.
   3.  "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT OR
 ACCOUNTS, THE INDIVIDUAL DESIGNATED AS THE INDIVIDUAL WHOSE HEALTH  CARE
 EXPENSES ARE EXPECTED TO BE PAID FROM THE ACCOUNT OR ACCOUNTS.
   4.  "FINANCIAL  ORGANIZATION" SHALL MEAN AN ORGANIZATION AUTHORIZED TO
 DO BUSINESS IN THE STATE OF NEW YORK AND:
   (A) WHICH IS AN AUTHORIZED FIDUCIARY TO ACT AS A TRUSTEE  PURSUANT  TO
 THE  PROVISIONS  OF  AN  ACT  OF  CONGRESS ENTITLED "EMPLOYEE RETIREMENT
 INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY BE AMENDED FROM TIME
 TO TIME, OR AN INSURANCE COMPANY;
   (B) (I) IS LICENSED  OR  CHARTERED  BY  THE  DEPARTMENT  OF  FINANCIAL
 SERVICES;
   (II) IS CHARTERED BY AN AGENCY OF THE FEDERAL GOVERNMENT;
   (III)  IS SUBJECT TO THE JURISDICTION AND REGULATION OF THE SECURITIES
 AND EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT; OR
   (IV) IS ANY OTHER ENTITY OTHERWISE AUTHORIZED TO ACT IN THIS STATE  AS
 A  TRUSTEE  PURSUANT  TO  THE  PROVISIONS OF AN ACT OF CONGRESS ENTITLED
 "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY
 BE AMENDED FROM TIME TO TIME.
   5. "MEMBER OF THE FAMILY" SHALL MEAN A FAMILY  MEMBER  AS  DEFINED  IN
 SECTION  FIVE  HUNDRED TWENTY-NINE OF THE INTERNAL REVENUE CODE OF 1986,
 AS AMENDED.
   6. "PROGRAM" SHALL MEAN THE NEW YORK STATE HEALTH CARE SAVINGS PROGRAM
 ESTABLISHED PURSUANT TO THIS ARTICLE.
   7. "QUALIFIED HEALTH CARE EXPENSES" SHALL MEAN ANY HEALTH CARE-RELATED
 EXPENSE INCLUDING BUT NOT LIMITED  TO:  PREMIUMS,  DEDUCTIBLES,  COPAYS,
 LONG-TERM CARE, AND ANY OUT-OF-POCKET EXPENSE INCURRED BY THE DESIGNATED
 BENEFICIARY OR THEIR MEMBER OF THE FAMILY ELIGIBLE FOR SUCH EXPENSE.
   8.  "QUALIFIED  WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT TO
 PAY THE QUALIFIED HEALTH CARE EXPENSES OF THE DESIGNATED BENEFICIARY  OF
 THE ACCOUNT.
   9.  "NONQUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT,
 BUT SHALL NOT MEAN:
   (A) A QUALIFIED WITHDRAWAL; OR
   (B) A WITHDRAWAL MADE AS THE RESULT OF THE DEATH OR DISABILITY OF  THE
 DESIGNATED BENEFICIARY OF AN ACCOUNT.
   10.  "DEPARTMENT"  SHALL MEAN THE DEPARTMENT OF HEALTH OF THE STATE OF
 NEW YORK.
   11. "COMPTROLLER" SHALL MEAN THE COMPTROLLER OF THE STATE OF NEW YORK.
   12. "MANAGEMENT CONTRACT" SHALL MEAN  THE  CONTRACT  EXECUTED  BY  THE
 COMPTROLLER AND A FINANCIAL ORGANIZATION SELECTED TO ACT AS A DEPOSITORY
 AND MANAGER OF THE PROGRAM.
 A. 4545                             7
 
   13.  "HEALTH  CARE  SAVINGS AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN
 THE COMPTROLLER OR A FINANCIAL ORGANIZATION AND THE ACCOUNT OWNER.
   14.  "PROGRAM MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION SELECTED BY
 THE COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PROGRAM.
   § 4853. FUNCTIONS OF THE COMPTROLLER AND THE CORPORATION. 1. THE COMP-
 TROLLER AND THE DEPARTMENT SHALL IMPLEMENT THE PROGRAM UNDER  THE  TERMS
 AND  CONDITIONS  ESTABLISHED  BY THIS ARTICLE AND A MEMORANDUM OF UNDER-
 STANDING RELATING TO ANY TERMS OR  CONDITIONS  NOT  OTHERWISE  EXPRESSLY
 PROVIDED FOR IN THIS ARTICLE.
   2. IN FURTHERANCE OF SUCH IMPLEMENTATION THE MEMORANDUM OF UNDERSTAND-
 ING  SHALL  ADDRESS  THE AUTHORITY AND RESPONSIBILITY OF THE COMPTROLLER
 AND THE DEPARTMENT TO:
   (A) DEVELOP AND IMPLEMENT THE PROGRAM IN A MANNER CONSISTENT WITH  THE
 PROVISIONS  OF THIS ARTICLE THROUGH RULES AND REGULATIONS ESTABLISHED IN
 ACCORDANCE WITH THE STATE ADMINISTRATIVE PROCEDURE ACT;
   (B) ENGAGE THE SERVICES OF CONSULTANTS ON A CONTRACT BASIS FOR RENDER-
 ING PROFESSIONAL AND TECHNICAL ASSISTANCE AND ADVICE;
   (C) SEEK RULINGS AND OTHER GUIDANCE FROM THE UNITED STATES  DEPARTMENT
 OF TREASURY AND THE INTERNAL REVENUE SERVICE RELATING TO THE PROGRAM;
   (D)  SEEK FEDERAL WAIVERS IN ORDER FOR THE PARTICIPANTS IN THE PROGRAM
 TO OBTAIN THE FEDERAL INCOME  TAX  BENEFITS  OR  TREATMENT  PROVIDED  BY
 SECTION  TWO  HUNDRED TWENTY-THREE OF THE INTERNAL REVENUE CODE OF 1986,
 AS AMENDED, OR ANY SIMILAR SUCCESSOR LEGISLATION;
   (E) CHARGE, IMPOSE, AND COLLECT ADMINISTRATIVE FEES AND SERVICE CHARG-
 ES IN CONNECTION WITH ANY AGREEMENT, CONTRACT OR TRANSACTION RELATING TO
 THE PROGRAM;
   (F) DEVELOP MARKETING PLANS AND PROMOTION MATERIAL;
   (G) ESTABLISH THE METHODS BY WHICH THE FUNDS HELD IN SUCH ACCOUNTS  BE
 DISPERSED;
   (H)  ESTABLISH THE METHOD BY WHICH FUNDS SHALL BE ALLOCATED TO PAY FOR
 ADMINISTRATIVE COSTS; AND
   (I) DO ALL THINGS NECESSARY AND PROPER TO CARRY OUT  THE  PURPOSES  OF
 THIS ARTICLE.
   §  4854.  POWERS  OF THE COMPTROLLER. 1. THE COMPTROLLER MAY IMPLEMENT
 THE PROGRAM THROUGH USE OF FINANCIAL ORGANIZATIONS AS ACCOUNT  DEPOSITO-
 RIES AND MANAGERS. UNDER THE PROGRAM, INDIVIDUALS MAY ESTABLISH ACCOUNTS
 DIRECTLY WITH AN ACCOUNT DEPOSITORY.
   2.  THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
 TO ACT AS DEPOSITORIES AND MANAGERS OF THE PROGRAM. FINANCIAL  ORGANIZA-
 TIONS  SUBMITTING  PROPOSALS  SHALL  DESCRIBE  THE INVESTMENT INSTRUMENT
 WHICH WILL BE HELD IN ACCOUNTS. THE COMPTROLLER SHALL SELECT AS  PROGRAM
 DEPOSITORIES  AND  MANAGERS  THE  FINANCIAL ORGANIZATION, FROM AMONG THE
 BIDDING FINANCIAL ORGANIZATIONS THAT DEMONSTRATES THE MOST  ADVANTAGEOUS
 COMBINATION,  BOTH  TO POTENTIAL PROGRAM PARTICIPANTS AND THIS STATE, OF
 THE FOLLOWING FACTORS:
   (A) FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZATION;
   (B) THE SAFETY OF THE INVESTMENT INSTRUMENT BEING OFFERED;
   (C) THE ABILITY OF THE INVESTMENT INSTRUMENT TO TRACK INCREASING COSTS
 OF HEALTH CARE;
   (D) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
 AND REPORTING REQUIREMENTS;
   (E) THE FINANCIAL ORGANIZATION'S PLAN FOR PROMOTING  THE  PROGRAM  AND
 THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM;
   (F)  THE  FEES,  IF ANY, PROPOSED TO BE CHARGED TO PERSONS FOR OPENING
 ACCOUNTS;
 A. 4545                             8
 
   (G) THE MINIMUM INITIAL DEPOSIT AND  MINIMUM  CONTRIBUTIONS  THAT  THE
 FINANCIAL ORGANIZATION WILL REQUIRE;
   (H)  THE ABILITY OF FINANCIAL ORGANIZATIONS TO ACCEPT ELECTRONIC WITH-
 DRAWALS, INCLUDING PAYROLL DEDUCTION PLANS; AND
   (I) OTHER BENEFITS TO THE STATE  OR  ITS  RESIDENTS  INCLUDED  IN  THE
 PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE TO COVER EXPENSES OF OPER-
 ATION OF THE PROGRAM.
   3.  THE  COMPTROLLER MAY ENTER INTO A CONTRACT WITH A FINANCIAL ORGAN-
 IZATION. SUCH FINANCIAL ORGANIZATION MANAGEMENT MAY PROVIDE ONE OR  MORE
 TYPES OF INVESTMENT INSTRUMENT.
   4. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
 THE PROGRAM.
   5.  A MANAGEMENT CONTRACT SHALL INCLUDE, AT A MINIMUM, TERMS REQUIRING
 THE FINANCIAL ORGANIZATION TO:
   (A) TAKE ANY ACTION REQUIRED TO KEEP THE PROGRAM  IN  COMPLIANCE  WITH
 REQUIREMENTS  OF  SECTION FOUR THOUSAND EIGHT HUNDRED FIFTY-FIVE OF THIS
 ARTICLE;
   (B) KEEP ADEQUATE RECORDS OF EACH ACCOUNT, KEEP  EACH  ACCOUNT  SEGRE-
 GATED  FROM  EACH  OTHER  ACCOUNT,  AND PROVIDE THE COMPTROLLER WITH THE
 INFORMATION NECESSARY TO PREPARE THE STATEMENTS REQUIRED BY SECTION FOUR
 THOUSAND EIGHT HUNDRED FIFTY-FIVE OF THIS ARTICLE;
   (C) COMPILE AND TOTAL INFORMATION CONTAINED IN STATEMENTS REQUIRED  TO
 BE PREPARED UNDER SECTION FOUR THOUSAND EIGHT HUNDRED FIFTY-FIVE OF THIS
 ARTICLE AND PROVIDE SUCH COMPILATIONS TO THE COMPTROLLER;
   (D) IF THERE IS MORE THAN ONE PROGRAM MANAGER, PROVIDE THE COMPTROLLER
 WITH  SUCH  INFORMATION  NECESSARY  TO DETERMINE COMPLIANCE WITH SECTION
 FOUR THOUSAND EIGHT HUNDRED FIFTY-FIVE OF THIS ARTICLE;
   (E) PROVIDE THE COMPTROLLER OR THEIR DESIGNEE ACCESS TO THE BOOKS  AND
 RECORDS OF THE PROGRAM MANAGER TO THE EXTENT NEEDED TO DETERMINE COMPLI-
 ANCE WITH THE CONTRACT;
   (F) HOLD ALL ACCOUNTS FOR THE BENEFIT OF THE ACCOUNT OWNER;
   (G)  BE  AUDITED  AT  LEAST  ANNUALLY  BY  A  FIRM OF CERTIFIED PUBLIC
 ACCOUNTANTS SELECTED BY THE PROGRAM MANAGER AND THAT THE RESULTS OF SUCH
 AUDIT BE PROVIDED TO THE COMPTROLLER;
   (H) PROVIDE THE COMPTROLLER WITH COPIES OF ALL REGULATORY FILINGS  AND
 REPORTS  MADE  BY IT DURING THE TERM OF THE MANAGEMENT CONTRACT OR WHILE
 IT IS HOLDING ANY ACCOUNTS, OTHER THAN CONFIDENTIAL FILINGS  OR  REPORTS
 THAT WILL NOT BECOME PART OF THE PROGRAM. THE PROGRAM MANAGER SHALL MAKE
 AVAILABLE  FOR  REVIEW  BY  THE  COMPTROLLER THE RESULTS OF ANY PERIODIC
 EXAMINATION OF SUCH MANAGER BY ANY STATE OR FEDERAL BANKING,  INSURANCE,
 OR  SECURITIES  COMMISSION,  EXCEPT  TO  THE  EXTENT THAT SUCH REPORT OR
 REPORTS MAY NOT BE DISCLOSED UNDER APPLICABLE LAW OR THE RULES  OF  SUCH
 COMMISSION; AND
   (I)  ENSURE THAT ANY DESCRIPTION OF THE PROGRAM, WHETHER IN WRITING OR
 THROUGH THE USE OF ANY MEDIA, IS  CONSISTENT  WITH  THE  MARKETING  PLAN
 DEVELOPED  IN THE MEMORANDUM OF UNDERSTANDING PURSUANT TO THE PROVISIONS
 OF SECTION FOUR THOUSAND EIGHT HUNDRED FIFTY-THREE OF THIS ARTICLE.
   6. THE COMPTROLLER MAY PROVIDE THAT AN AUDIT SHALL BE CONDUCTED OF THE
 OPERATIONS AND FINANCIAL POSITION OF THE PROGRAM DEPOSITORY AND  MANAGER
 AT  ANY TIME IF THE COMPTROLLER HAS ANY REASON TO BE CONCERNED ABOUT THE
 FINANCIAL POSITION,  THE  RECORDKEEPING  PRACTICES,  OR  THE  STATUS  OF
 ACCOUNTS OF SUCH PROGRAM DEPOSITORY AND MANAGER.
   7.  DURING  THE TERM OF ANY CONTRACT WITH A PROGRAM MANAGER, THE COMP-
 TROLLER SHALL CONDUCT AN EXAMINATION OF SUCH MANAGER AND ITS HANDLING OF
 ACCOUNTS. SUCH EXAMINATION SHALL BE CONDUCTED  AT  LEAST  BIENNIALLY  IF
 SUCH  MANAGER  IS  NOT  OTHERWISE SUBJECT TO PERIODIC EXAMINATION BY THE
 A. 4545                             9

 SUPERINTENDENT OF FINANCIAL  SERVICES,  THE  FEDERAL  DEPOSIT  INSURANCE
 CORPORATION OR OTHER SIMILAR ENTITY.
   8.  (A)  IF SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM MANAGER
 OR DEPOSITORY IS NOT RENEWED, AFTER THE END OF ITS TERM:
   (I) ACCOUNTS PREVIOUSLY ESTABLISHED AND HELD IN AN INVESTMENT  INSTRU-
 MENT AT SUCH FINANCIAL ORGANIZATION MAY BE TERMINATED;
   (II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO SUCH ACCOUNTS;
   (III)  NO NEW ACCOUNTS MAY BE PLACED WITH SUCH FINANCIAL ORGANIZATION;
 AND
   (IV) EXISTING ACCOUNTS HELD BY SUCH DEPOSITORY SHALL REMAIN SUBJECT TO
 ALL OVERSIGHT AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER.
   (B) IF THE  COMPTROLLER  TERMINATES  A  FINANCIAL  ORGANIZATION  AS  A
 PROGRAM  MANAGER OR DEPOSITORY, THEY SHALL TAKE CUSTODY OF ACCOUNTS HELD
 BY SUCH FINANCIAL ORGANIZATION AND SHALL SEEK TO PROMPTLY TRANSFER  SUCH
 ACCOUNTS TO ANOTHER FINANCIAL ORGANIZATION THAT IS SELECTED AS A PROGRAM
 MANAGER  OR DEPOSITORY AND INTO INVESTMENT INSTRUMENTS AS SIMILAR TO THE
 ORIGINAL INSTRUMENTS AS POSSIBLE.
   9. THE COMPTROLLER MAY ENTER INTO  SUCH  CONTRACTS  AS  NECESSARY  AND
 PROPER FOR THE IMPLEMENTATION OF THE PROGRAM.
   §  4855.  PROGRAM  REQUIREMENTS;  NEW  YORK  STATE HEALTH CARE SAVINGS
 ACCOUNT.  1. NEW YORK HEALTH CARE SAVINGS ACCOUNTS ESTABLISHED  PURSUANT
 TO THE PROVISIONS OF THIS ARTICLE SHALL BE GOVERNED BY THE PROVISIONS OF
 THIS SECTION.
   2.  A NEW YORK HEALTH CARE SAVINGS ACCOUNT MAY BE OPENED BY ANY PERSON
 WHO DESIRES TO SAVE MONEY FOR THE PAYMENT OF THE QUALIFIED HEALTH  CARE-
 RELATED  EXPENSES  OF  THE DESIGNATED BENEFICIARY OR THEIR MEMBER OF THE
 FAMILY. AN ACCOUNT OWNER MAY DESIGNATE ANOTHER PERSON AS SUCCESSOR OWNER
 OF THE ACCOUNT IN THE EVENT OF THE DEATH OF THE ORIGINAL ACCOUNT  OWNER.
 SUCH PERSON WHO OPENS AN ACCOUNT OR ANY SUCCESSOR OWNER SHALL BE CONSID-
 ERED THE ACCOUNT OWNER AS DEFINED IN SECTION FOUR THOUSAND EIGHT HUNDRED
 FIFTY-TWO OF THIS ARTICLE.
   (A) AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
 THE PROGRAM AND CONTAIN THE FOLLOWING:
   (I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
 CATION NUMBER OF THE ACCOUNT OWNER;
   (II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
   (III)  THE NAME, ADDRESS, AND SOCIAL SECURITY NUMBER OF THE DESIGNATED
 BENEFICIARY; AND
   (IV) SUCH OTHER INFORMATION AS THE PROGRAM MAY REQUIRE.
   (B) THE COMPTROLLER AND THE DEPARTMENT MAY ESTABLISH A NOMINAL FEE FOR
 SUCH APPLICATION.
   3. ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS  TO
 THE ACCOUNT AFTER THE ACCOUNT IS OPENED.
   4.  CONTRIBUTIONS  TO ACCOUNTS MAY BE MADE IN CASH OR MAY BE DEPOSITED
 BY A TAXPAYER WHO HAS ELECTED TO CONTRIBUTE ALL OR A PORTION OF A REFUND
 OF PERSONAL INCOME TAX TO AN ACCOUNT THAT  HAS  BEEN  ESTABLISHED  UNDER
 THIS ARTICLE.
   (A)  TAXPAYER  CONTRIBUTIONS  SHALL  BE  MADE BY DIRECT DEPOSIT TO THE
 DESIGNATED ACCOUNT. THE AMOUNT ELECTED TO BE CONTRIBUTED BY THE TAXPAYER
 MUST BE AT LEAST TWENTY-FIVE DOLLARS AND MAY BE APPLIED  AS  A  CONTRIB-
 UTION ONLY FOR THE TAX YEAR IN WHICH THE REFUND IS ISSUED.
   (B)  THE ELECTION SHALL BE MADE ON A FORM PRESCRIBED BY THE DEPARTMENT
 OF TAXATION AND FINANCE AND FILED WITH THE TAXPAYER'S TAX RETURN FOR THE
 TAX YEAR OR AT SUCH OTHER TIME AND IN SUCH OTHER MANNER AS  THE  DEPART-
 MENT MAY PRESCRIBE. THE DEPARTMENT SHALL PRESCRIBE THE MAXIMUM NUMBER OF
 A. 4545                            10
 
 ACCOUNTS  TO  WHICH  A TAXPAYER MAY ELECT TO CONTRIBUTE A PORTION OF THE
 REFUND.
   (C)  THE ELECTION TO CONTRIBUTE ALL OR A PORTION OF A REFUND SHALL NOT
 BE REVOCABLE.
   (D) ALL OR A PORTION OF A REFUND MAY NOT BE CONTRIBUTED TO AN  ACCOUNT
 THAT  HAS  BEEN  ESTABLISHED  UNDER  THIS  ARTICLE  IF THE AMOUNT OF THE
 TAXPAYER'S ELECTED REFUND FOR SUCH TAX YEAR  IS  REDUCED  BY  ANY  OTHER
 SECTIONS  OF  THE  TAX LAW TO THE AMOUNT LESS THAN THE MINIMUM AMOUNT OF
 CONTRIBUTION AUTHORIZED UNDER THIS SECTION.
   5. AN ACCOUNT OWNER MAY WITHDRAW ALL OR PART OF THE  BALANCE  FROM  AN
 ACCOUNT ON SIXTY DAYS NOTICE OR SUCH SHORTER PERIOD AS MAY BE AUTHORIZED
 UNDER  RULES  GOVERNING THE PROGRAM. SUCH RULES SHALL INCLUDE PROVISIONS
 THAT WILL GENERALLY ENABLE THE DETERMINATION AS TO WHETHER A  WITHDRAWAL
 IS A NONQUALIFIED WITHDRAWAL OR A QUALIFIED WITHDRAWAL.
   6.  (A)  AN  ACCOUNT OWNER MAY CHANGE THE DESIGNATED BENEFICIARY OF AN
 ACCOUNT TO AN INDIVIDUAL WHO IS A MEMBER OF  THE  FAMILY  OF  THE  PRIOR
 DESIGNATED  BENEFICIARY IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY THE
 MEMORANDUM OF UNDERSTANDING PURSUANT TO THE PROVISIONS OF  SECTION  FOUR
 THOUSAND EIGHT HUNDRED FIFTY-THREE OF THIS ARTICLE.
   (B)  AN  ACCOUNT  OWNER MAY TRANSFER ALL OR A PORTION OF AN ACCOUNT TO
 ANOTHER NEW YORK HEALTH CARE SAVINGS ACCOUNT, THE SUBSEQUENT  DESIGNATED
 BENEFICIARY OF WHICH IS A MEMBER OF THE FAMILY.
   (C)  CHANGES  IN  DESIGNATED  BENEFICIARIES  AND  TRANSFERS UNDER THIS
 SUBDIVISION SHALL NOT BE PERMITTED TO THE EXTENT THAT THEY  WOULD  CAUSE
 ALL  ACCOUNTS FOR THE SAME BENEFICIARY TO EXCEED THE PERMITTED AGGREGATE
 MAXIMUM ACCOUNT BALANCE.
   7. THE PROGRAM SHALL PROVIDE SEPARATE ACCOUNTING FOR  EACH  DESIGNATED
 BENEFICIARY.
   8.  NO ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF ANY ACCOUNT SHALL BE
 PERMITTED TO DIRECT THE INVESTMENT OF ANY CONTRIBUTIONS TO AN ACCOUNT OR
 THE EARNINGS THEREON MORE THAN TWO TIMES IN ANY CALENDAR YEAR.
   9. NEITHER AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY  MAY  USE  AN
 INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
 IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.
   10.  THE  COMPTROLLER SHALL PROMULGATE RULES OR REGULATIONS TO PREVENT
 CONTRIBUTIONS ON BEHALF OF A DESIGNATED  BENEFICIARY  IN  EXCESS  OF  AN
 AMOUNT  THAT  WOULD CAUSE THE AGGREGATE ACCOUNT BALANCE FOR ALL ACCOUNTS
 FOR A DESIGNATED BENEFICIARY TO EXCEED A  MAXIMUM  ACCOUNT  BALANCE,  AS
 ESTABLISHED  FROM  TIME TO TIME BY THE COMPTROLLER AND THE DEPARTMENT ON
 THE BASIS OF HEALTH CARE COSTS IN THE STATE, WITH ADEQUATE SAFEGUARDS TO
 PREVENT MORE CONTRIBUTIONS  THAN  NECESSARY  TO  PROVIDE  FOR  QUALIFIED
 HEALTH CARE EXPENSES OF THE BENEFICIARY OR THEIR MEMBER OF THE FAMILY.
   11. (A) IF THERE IS ANY DISTRIBUTION FROM AN ACCOUNT TO ANY INDIVIDUAL
 OR  FOR  THE  BENEFIT  OF  ANY  INDIVIDUAL  DURING A CALENDAR YEAR, SUCH
 DISTRIBUTION SHALL BE REPORTED TO THE INTERNAL REVENUE SERVICE  AND  THE
 ACCOUNT  OWNER,  THE  DESIGNATED  BENEFICIARY, OR THE DISTRIBUTEE TO THE
 EXTENT REQUIRED BY FEDERAL LAW OR REGULATION.
   (B) STATEMENTS SHALL BE PROVIDED TO EACH ACCOUNT OWNER AT  LEAST  ONCE
 EACH  YEAR WITHIN SIXTY DAYS AFTER THE END OF THE TWELVE MONTH PERIOD TO
 WHICH THEY RELATE. THE STATEMENT SHALL IDENTIFY THE  CONTRIBUTIONS  MADE
 DURING  A PRECEDING TWELVE MONTH PERIOD, THE TOTAL CONTRIBUTIONS MADE TO
 THE ACCOUNT THROUGH THE END OF THE PERIOD, THE VALUE OF THE  ACCOUNT  AT
 THE  END  OF  SUCH PERIOD, DISTRIBUTIONS MADE DURING SUCH PERIOD AND ANY
 OTHER INFORMATION THAT THE COMPTROLLER SHALL REQUIRE TO BE  REPORTED  TO
 THE ACCOUNT OWNER.
 A. 4545                            11
 
   (C)  STATEMENTS AND INFORMATION RELATING TO ACCOUNTS SHALL BE PREPARED
 AND FILED TO THE EXTENT REQUIRED BY FEDERAL AND STATE TAX LAW.
   12.  (A)  A  LOCAL  GOVERNMENT  OR  ORGANIZATION  DESCRIBED IN SECTION
 501(C)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, MAY OPEN AND
 BECOME THE ACCOUNT OWNER OF AN ACCOUNT TO  FUND  QUALIFIED  HEALTH  CARE
 EXPENSES  FOR  PERSONS  WHOSE IDENTITY WILL BE DETERMINED UPON DISBURSE-
 MENT.
   (B) IN THE CASE OF ANY ACCOUNT OPENED PURSUANT  TO  PARAGRAPH  (A)  OF
 THIS  SUBDIVISION  THE  REQUIREMENT SET FORTH IN SUBDIVISION TWO OF THIS
 SECTION THAT A DESIGNATED BENEFICIARY BE DESIGNATED WHEN AN  ACCOUNT  IS
 OPENED  SHALL  NOT APPLY AND EACH INDIVIDUAL WHO RECEIVES AN INTEREST IN
 SUCH ACCOUNT AS A QUALIFIED HEALTH CARE EXPENSE SHALL BE  TREATED  AS  A
 DESIGNATED BENEFICIARY WITH RESPECT TO SUCH INTEREST.
   13.  AN ANNUAL FEE MAY BE IMPOSED UPON THE ACCOUNT OWNER FOR THE MAIN-
 TENANCE OF THE ACCOUNT.
   14. THE PROGRAM SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
 EACH ACCOUNT OWNER AND PROSPECTIVE ACCOUNT OWNER OF A  NEW  YORK  HEALTH
 CARE SAVINGS ACCOUNT:
   (A)  THE  TERMS  AND  CONDITIONS FOR PURCHASING A NEW YORK HEALTH CARE
 SAVINGS ACCOUNT;
   (B) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
   (C) THE PERSON OR ENTITY ENTITLED TO TERMINATE  THE  NEW  YORK  HEALTH
 CARE SAVINGS ACCOUNT;
   (D) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENEFITS
 UNDER THE HEALTH CARE SAVINGS AGREEMENT;
   (E)  THE  TERMS  AND  CONDITIONS  UNDER  WHICH  MONEY MAY BE WHOLLY OR
 PARTIALLY WITHDRAWN FROM THE PROGRAM, INCLUDING, BUT NOT LIMITED TO, ANY
 REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
   (F) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO AND
 DISTRIBUTIONS FROM ACCOUNTS; AND
   (G) ALL OTHER RIGHTS AND OBLIGATIONS PURSUANT TO HEALTH  CARE  SAVINGS
 AGREEMENTS,  AND  ANY  OTHER  TERMS,  CONDITIONS,  AND PROVISIONS DEEMED
 NECESSARY AND APPROPRIATE BY THE TERMS OF THE MEMORANDUM OF  UNDERSTAND-
 ING  ENTERED INTO PURSUANT TO SECTION FOUR THOUSAND EIGHT HUNDRED FIFTY-
 THREE OF THIS ARTICLE.
   15. HEALTH CARE SAVINGS AGREEMENTS SHALL BE SUBJECT TO  SECTION  FOUR-
 TEEN-C OF THE BANKING LAW AND THE "TRUTH-IN-SAVINGS" REGULATIONS PROMUL-
 GATED THEREUNDER.
   §  4856.  PROGRAM  LIMITATIONS;  NEW  YORK  STATE  HEALTH CARE SAVINGS
 ACCOUNT.  1. NOTHING IN THIS ARTICLE SHALL BE CONSTRUED TO:
   (A) GIVE ANY DESIGNATED BENEFICIARY ANY RIGHTS OR LEGAL INTEREST  WITH
 RESPECT  TO  AN ACCOUNT UNLESS THE DESIGNATED BENEFICIARY IS THE ACCOUNT
 OWNER;
   (B) CREATE STATE RESIDENCY FOR AN INDIVIDUAL MERELY BECAUSE THE  INDI-
 VIDUAL IS A DESIGNATED BENEFICIARY OR THEIR MEMBER OF THE FAMILY; OR
   (C)  GUARANTEE  THAT  AMOUNTS  SAVED  PURSUANT  TO THE PROGRAM WILL BE
 SUFFICIENT TO COVER THE QUALIFIED HEALTH CARE EXPENSES OF  A  DESIGNATED
 BENEFICIARY OR THEIR MEMBER OF THE FAMILY.
   2.  (A) NOTHING IN THIS ARTICLE SHALL CREATE OR BE CONSTRUED TO CREATE
 ANY OBLIGATION OF THE COMPTROLLER, THE STATE, OR ANY AGENCY  OR  INSTRU-
 MENTALITY OF THE STATE TO GUARANTEE FOR THE BENEFIT OF ANY ACCOUNT OWNER
 OR DESIGNATED BENEFICIARY WITH RESPECT TO:
   (I) THE RATE OF INTEREST OR OTHER RETURN ON ANY ACCOUNT; AND
   (II) THE PAYMENT OF INTEREST OR OTHER RETURN ON ANY ACCOUNT.
   (B)  THE  COMPTROLLER  AND  THE DEPARTMENT BY RULE OR REGULATION SHALL
 PROVIDE THAT EVERY CONTRACT, APPLICATION, DEPOSIT SLIP, OR OTHER SIMILAR
 A. 4545                            12
 
 DOCUMENT THAT MAY BE USED  IN  CONNECTION  WITH  A  CONTRIBUTION  TO  AN
 ACCOUNT  CLEARLY  INDICATE  THAT THE ACCOUNT IS NOT INSURED BY THE STATE
 AND NEITHER THE PRINCIPAL DEPOSITED NOR THE INVESTMENT RETURN IS GUARAN-
 TEED BY THE STATE.
   § 3. Subsection (b) of section 612 of the tax law is amended by adding
 a new paragraph 44 to read as follows:
   (44)  (A)  EXCESS  DISTRIBUTIONS RECEIVED DURING THE TAXABLE YEAR BY A
 DISTRIBUTEE OF A NEW YORK HEALTH CARE SAVINGS ACCOUNT ESTABLISHED  UNDER
 THE  NEW  YORK  HEALTH  CARE  SAVINGS PROGRAM PROVIDED FOR UNDER ARTICLE
 FORTY-EIGHT-A OF THE PUBLIC  HEALTH  LAW,  TO  THE  EXTENT  SUCH  EXCESS
 DISTRIBUTIONS  ARE DEEMED ATTRIBUTABLE TO DEDUCTIBLE CONTRIBUTIONS UNDER
 PARAGRAPH FORTY-EIGHT OF SUBSECTION (C) OF THIS SECTION.
   (B) (I) THE TERM "EXCESS DISTRIBUTIONS" MEANS DISTRIBUTIONS WHICH  ARE
 NOT:
   (I)  QUALIFIED  WITHDRAWALS WITHIN THE MEANING OF SUBDIVISION EIGHT OF
 SECTION FOUR THOUSAND EIGHT HUNDRED FIFTY-TWO OF THE PUBLIC HEALTH LAW;
   (II) WITHDRAWALS MADE AS A RESULT OF THE DEATH OR  DISABILITY  OF  THE
 DESIGNATED BENEFICIARY WITHIN THE MEANING OF SUBDIVISION NINE OF SECTION
 FOUR THOUSAND EIGHT HUNDRED FIFTY-FOUR OF THE PUBLIC HEALTH LAW; OR
   (III) TRANSFERS DESCRIBED IN PARAGRAPH B OF SUBDIVISION SIX OF SECTION
 FOUR THOUSAND EIGHT HUNDRED FIFTY-FIVE OF THE PUBLIC HEALTH LAW.
   (II)  EXCESS  DISTRIBUTIONS SHALL BE DEEMED ATTRIBUTABLE TO DEDUCTIBLE
 CONTRIBUTIONS TO THE EXTENT THE AMOUNT OF ANY SUCH EXCESS  DISTRIBUTION,
 WHEN  ADDED  TO  ALL  PREVIOUS  EXCESS  DISTRIBUTIONS  FROM THE ACCOUNT,
 EXCEEDS THE AGGREGATE OF ALL NONDEDUCTIBLE CONTRIBUTIONS TO THE ACCOUNT.
   § 4. Subsection (c) of section 612 of the tax law is amended by adding
 two new paragraphs 48 and 49 to read as follows:
   (48) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
 ONE OR MORE NEW YORK HEALTH CARE SAVINGS ACCOUNTS ESTABLISHED UNDER  THE
 NEW YORK HEALTH SAVINGS PROGRAM PROVIDED FOR UNDER ARTICLE FORTY-EIGHT-A
 OF  THE  PUBLIC HEALTH LAW, TO THE EXTENT NOT DEDUCTIBLE OR ELIGIBLE FOR
 CREDIT FOR FEDERAL INCOME TAX PURPOSES; PROVIDED, HOWEVER, THE EXCLUSION
 PROVIDED FOR IN THIS PARAGRAPH SHALL NOT EXCEED  FIVE  THOUSAND  DOLLARS
 FOR AN INDIVIDUAL OR HEAD OF HOUSEHOLD, AND FOR MARRIED COUPLES WHO FILE
 JOINT  TAX  RETURNS,  SHALL  NOT  EXCEED TEN THOUSAND DOLLARS; PROVIDED,
 FURTHER, THAT SUCH EXCLUSION SHALL BE  AVAILABLE  ONLY  TO  THE  ACCOUNT
 OWNER AND NOT TO ANY OTHER PERSON.
   (49)  DISTRIBUTIONS FROM A NEW YORK HEALTH CARE SAVINGS ACCOUNT ESTAB-
 LISHED UNDER THE NEW YORK STATE HEALTH CARE SAVINGS PROGRAM PROVIDED FOR
 UNDER ARTICLE FORTY-EIGHT-A OF THE PUBLIC  HEALTH  LAW,  TO  THE  EXTENT
 INCLUDIBLE IN GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES.
   § 5. This act shall take effect immediately and shall apply to taxable
 years  beginning  on  or  after the first of January next succeeding the
 date on which it shall have become a law.
   § 4. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion, section or part of this act shall be adjudged by a court of compe-
 tent jurisdiction to be invalid, such judgment shall not affect,  impair
 or invalidate the remainder thereof, but shall be confined in its opera-
 tion  to  the  clause, sentence, paragraph, subdivision, section or part
 thereof directly involved in the  controversy  in  which  such  judgment
 shall  have been rendered. It is hereby declared to be the intent of the
 legislature that this act would have been enacted even if  such  invalid
 provisions had not been included herein.
   §  5.  This  act shall take effect immediately provided, however, that
 the applicable effective date of Parts A through D of this act shall  be
 as specifically set forth in the last section of such Parts.