Bill Text: NY A07153 | 2023-2024 | General Assembly | Introduced
Bill Title: Creates the health insurance guaranty fund.
Spectrum: Partisan Bill (Democrat 27-0)
Status: (Introduced) 2024-01-03 - referred to insurance [A07153 Detail]
Download: New_York-2023-A07153-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7153 2023-2024 Regular Sessions IN ASSEMBLY May 11, 2023 ___________ Introduced by M. of A. SIMONE, STIRPE, HEVESI, FAHY, SEAWRIGHT, BENEDET- TO, MAGNARELLI, WEPRIN, THIELE, PAULIN, BRAUNSTEIN, OTIS, COLTON, JEAN-PIERRE, PEOPLES-STOKES, HUNTER, STECK, D. ROSENTHAL, LAVINE, L. ROSENTHAL, DICKENS, GONZALEZ-ROJAS -- Multi-Sponsored by -- M. of A. COOK, EPSTEIN, GLICK, LUPARDO, SIMON -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law and the state finance law, in relation to creating the health insurance guaranty fund The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subsection (e) of section 7402 of the insurance law is 2 amended to read as follows: 3 (e) Is found, after examination, to be in such condition that its 4 further transaction of business will be hazardous to its policyholders, 5 creditors, or the public. This shall include a health insurer, as 6 defined in article eighty-one of this chapter, that is consistently 7 unable to meet the requirements of section three thousand two hundred 8 twenty-four-a of this chapter. 9 § 2. Section 7403 of the insurance law is amended by adding a new 10 subsection (e) to read as follows: 11 (e)(1) Upon a determination by the superintendent and the rehabilita- 12 tor that funds from the New York health insurance consumer protection 13 security fund are necessary to meet the requirements of article eighty- 14 one of this chapter, the superintendent shall make available such funds 15 as are necessary, pursuant to the requirements of such article. 16 (2) The superintendent shall advance such funds as may be necessary 17 pursuant to subsection (d) of section eight thousand one hundred four of 18 this chapter. The rehabilitator and the superintendent shall establish a 19 plan, if possible, for repayment of the advance, at a rate of interest 20 determined by the superintendent. 21 (3) Advances, pursuant to paragraph two of this subsection, shall, in 22 all respects except to rate of interest, be subject to the provisions of 23 section one thousand three hundred seven of this chapter, provided that 24 in the event that an insurer which has received an advance pursuant to EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07942-01-3A. 7153 2 1 this subsection is subsequently the subject of an order of liquidation, 2 the claim of the fund for the advance and any accrued interest shall 3 have priority above claims of all nonsecured creditors, provided the 4 requirements of article eighty-one of this chapter have been met, and 5 shall be paid immediately to the fund or as soon as assets are available 6 therefor. 7 § 3. Paragraph 1 of subsection (f) of section 7405 of the insurance 8 law, as amended by chapter 33 of the laws of 2005, is amended to read as 9 follows: 10 (1) No later than one hundred eighty days after a final order of 11 liquidation with an adjudication of insolvency of an insurer by a court 12 of competent jurisdiction of this state, the liquidator may in his sole 13 discretion make application to the court for approval of a proposal to 14 disburse assets out of marshalled assets, from time to time as such 15 assets become available, to any fund established by article seventy-six 16 of this chapter, article six-A of the workers' compensation law [and], 17 any foreign entity performing a similar function, and any fund estab- 18 lished pursuant to article eighty-one of this chapter, provided that the 19 requirements of subsection (a) of section eight thousand one hundred 20 three of this chapter have been met, having obligations because of such 21 insolvency. If the liquidator determines that there are insufficient 22 assets to disburse, the application authorized by this subsection shall 23 be considered satisfied by a filing by the liquidator stating the 24 reasons for this determination. 25 § 4. The insurance law is amended by adding a new article 81 to read 26 as follows: 27 ARTICLE 81 28 HEALTH INSURANCE GUARANTY FUND 29 Section 8101. Purpose. 30 8102. Definitions. 31 8103. New York health insurance consumer protection security 32 fund. 33 8104. Powers of the superintendent. 34 § 8101. Purpose. The purpose of this article is to protect covered 35 individuals against the failure or inability of a health insurer to 36 perform its contractual obligations due to financial impairment or 37 insolvency. To provide this protection, the legislature hereby creates a 38 New York health insurance consumer protection security fund to serve as 39 a guaranty fund mechanism capable of insuring that the financial obli- 40 gations of health insurers to their enrollees and health care providers 41 are satisfied. 42 § 8102. Definitions. As used in this article: 43 (a) "Fund" means the New York health insurance consumer protection 44 security fund created by this article. 45 (b) "Health insurer" means any organization or entity providing 46 reimbursement for a covered expense under any individual, group or blan- 47 ket policy or contract covering the kinds of insurance described in item 48 (i) of paragraph three of subsection (a) of section one thousand one 49 hundred thirteen of this chapter and licensed under article thirty-two 50 or forty-two of this chapter, which is not a member of, or participant 51 in, or a subsidiary of a member of or participant in, the funds created 52 pursuant to articles seventy-five, seventy-six, and seventy-seven of 53 this chapter; a corporation organized under article forty-three of this 54 chapter; or an organization certified under article forty-four of the 55 public health law.A. 7153 3 1 (c) "Contractual obligation" means any payment or reimbursement owed 2 by a health insurer for a covered benefit under a policy, contract, or 3 comprehensive health benefits plan. 4 (d) "Impaired health insurer" means a health insurer for whom the 5 superintendent has initiated a proceeding under the provisions of arti- 6 cle seventy-four of this chapter. 7 (e) "Commissioner" means the commissioner of taxation and finance. 8 § 8103. New York health insurance consumer protection security fund. 9 (a) Consistent with the provisions of subdivision one of section nine- 10 ty-eight-d of the state finance law, there is hereby established a New 11 York health insurance consumer protection security fund. Such fund shall 12 be used in the payment of unpaid contractual obligations, in whole or in 13 part, by an impaired health insurer, after application of any funds 14 available from a proceeding implemented pursuant to article seventy-four 15 of this chapter. 16 (b)(1) Payment into the fund by health insurers shall be made through 17 an assessment based on the premiums received by a health insurer for 18 business in this state for the most recent calendar year for which 19 premium information is available, excluding premiums received for indi- 20 viduals under title XIX of the social security act. The superintendent 21 shall establish assessment levels sufficient to fully pay all unpaid 22 claims of an impaired health insurer, pursuant to subsections (b), (c) 23 and (d) of section eight thousand one hundred four of this article, and 24 to repay any transfers made pursuant to subdivision five of section 25 seventy-two of the state finance law. 26 (2) The superintendent may exempt, abate or defer, in whole or in 27 part, the assessment of a health insurer if the superintendent deter- 28 mines that payment of the assessment would endanger the ability of the 29 health insurer to fulfill its contractual obligations or place the 30 health insurer in an unsafe or unsound financial condition. 31 (3) In the event an assessment against a health insurer is exempted, 32 abated or deferred, in whole or in part, the amount by which that 33 assessment is exempted, abated or deferred shall be assessed against 34 other health insurers in a manner consistent with this section. 35 (c) Repayment of health insurers when funds become available from a 36 proceeding pursuant to article seventy-four of this chapter shall be 37 proportionate to the contribution from each health insurer. 38 § 8104. Powers of the superintendent. (a) For any impaired health 39 insurer, the superintendent shall direct the commissioner to make 40 payments from the New York health insurance consumer protection security 41 fund to ensure that payments to health care providers, or indemnity 42 payments to covered individuals, are made in full for services provided 43 that would not otherwise be fully reimbursed despite the proceedings 44 implemented pursuant to article seventy-four of this chapter. Services 45 provided either prior to the implementation of a proceeding under arti- 46 cle seventy-four of this chapter or after implementation of such 47 proceeding shall be eligible for reimbursement, in part or in whole, 48 from the fund. Payment in full shall be determined by the terms of the 49 health insurance contract, any contract between a health care provider 50 and the impaired health insurer and any applicable state or federal laws 51 or regulations including but not limited to part H of chapter sixty of 52 the laws of two thousand fourteen and section two thousand nineteen-a of 53 the Public Health Services Act, as amended by the Patient Protection and 54 affordable Care Act. 55 (b) The superintendent shall direct the commissioner to make payments 56 to ensure that payment in full is made to health care providers, orA. 7153 4 1 indemnity payments to covered individuals, for services provided before 2 the implementation of proceedings pursuant to article seventy-four of 3 this chapter within thirty days of the implementation of such proceed- 4 ing. 5 (c) The superintendent shall direct the commissioner to ensure that 6 payment in full is made to health care providers, or indemnity payments 7 to covered individuals, for services provided after the implementation 8 of proceedings pursuant to article seventy-four of this chapter within 9 thirty days of receipt of a claim. 10 (d) If necessary, the superintendent shall direct the commissioner to 11 advance monies from the fund to comply with the provisions of 12 subsections (b) and (c) of this section. 13 (e) The superintendent shall notify the director of the budget of the 14 need for monies to be transferred pursuant to subdivision five of 15 section seventy-two of the state finance law to meet the requirements of 16 subsections (b), (c) and (d) of this section. 17 (f) The superintendent shall direct the commissioner to use the monies 18 of the fund to repay any transfers made pursuant to subdivision five of 19 section seventy-two of the state finance law, when such funds are paid 20 pursuant to subsection (b) of section eight thousand one hundred three 21 of this article. 22 (g) The superintendent shall ensure that the cost of assessments 23 established pursuant to subdivision (b) of section eight thousand one 24 hundred three of this article are not included in premiums by any health 25 insurer. 26 § 5. Section 72 of the state finance law is amended by adding a new 27 subdivision 5 to read as follows: 28 5. Notwithstanding any provision of law to the contrary, upon notifi- 29 cation from the superintendent of financial services of the need for 30 monies to meet the requirements of subsections (b), (c) and (d) of 31 section eight thousand one hundred four of the insurance law, the direc- 32 tor of the budget shall transfer such funds as are necessary. 33 § 6. The state finance law is amended by adding a new section 98-d to 34 read as follows: 35 § 98-d. New York health insurance consumer protection security fund. 36 1. There is hereby established in the custody of the commissioner of the 37 department of taxation and finance an account of the miscellaneous 38 special revenue fund to be known as the New York health insurance 39 consumer protection security fund account. 40 2. Notwithstanding any other law, rule or regulation to the contrary, 41 the commissioner of taxation and finance is hereby authorized and 42 directed to receive for deposit to the credit of the New York health 43 insurance consumer protection security fund account, assessments imposed 44 pursuant to article eighty-one of the insurance law and transfers from 45 the general fund pursuant to subdivision five of section seventy-two of 46 this article. 47 3. The commissioner of taxation and finance shall make payments from 48 the monies on deposit in the New York health insurance consumer 49 protection security fund account in the amounts and at the times deter- 50 mined by the superintendent of insurance. 51 § 7. This act shall take effect immediately and shall be applicable to 52 any health insurer determined by the superintendent of financial 53 services, on or after such effective date, to be insolvent within the 54 meaning of section 1309 of the insurance law.
