Enacts Ian's Law, which provides enhanced consumer protections in the event of an insurer's discontinuance of coverage

17 Co-sponsors

• Neil D. Breslin
• Ruben Diaz
• Brian X. Foley
• Ruth Hassell-Thompson
• Shirley L. Huntley
• Craig M. Johnson
• Liz Krueger
• Velmanette Montgomery
• George Onorato
• Kevin S. Parker
• Diane J. Savino
• Daniel L. Squadron
• Toby Ann Stavisky
• Andrea Stewart-Cousins
• Antoine M. Thompson
• David J. Valesky
• Eric Adams

BILL NUMBER:S6263C

Title of bill

An act to amend the insurance law, in relation to providing enhanced consumer protections in the event of an insurer's discontinuance of coverage

Purpose or general idea of bill

Closes an existing loophole in New York State Insurance Law which allows health insurance companies to discontinue entire classes of policies as a pretext to dropping a high-cost individual's insurance policy.

Summary of specific provisions

This bill amends Section 3221(p) and 4305(j) of the Insurance Law to:

(1) require insurers to certify to the Insurance Department that they: (i) provided written notice to all individuals covered by an affected class of policies that they wish to discontinue a class of policies; (ii) offered each policyholder in the class the option to purchase any other medical coverage currently being offered by the insurer; and (iii) are not dropping a class of policies as a pretext or with the intent to dropping an individual policyholder; and

(2) create a review process by the Insurance Department Superintendent to ensure that policyholders with serious medical conditions who have utilized benefits related to their serious medical condition within the past 12 months get to keep coverage of those benefits when their insurance company discontinues their class of policies.

Justification

Existing law currently protects consumers by banning insurance companies from dropping them due to their claims experience or health status. However, there is currently a loophole which allows insurance companies to drop coverage for an entire class of policyholders due to one high cost individual.

Ian Pearl was a victim of that loophole. Mr. Pearl requires 24-hour nursing care due to muscular dystrophy - a benefit that had been covered by his insurance company, issued in the state of New York as part of a small group policy. His insurance company allegedly took the claims history of Mr. Pearl and other severely ill and disabled policyholders into account when deciding which class of policies to terminate, and referred to cases like Mr. Pearl's as "dogs" they could get rid of.

This bill will add a strong consumer protection mechanism for the current law that states that no one with a serious medical condition who is covered under an insurance policy shall lose their coverage of benefits they have utilized in the last 12 months related to their

serious medical condition when their insurance company discontinues their class of policies.

Prior legislative history

New bill.

Fiscal implications for state and local governments

None.

Effective date

This act shall take effect on the first of January next succeeding the date on which it shall have become a law.