Creates exceptions to the general prohibition on rebating

BILL NUMBER:S4950

Title of bill

An act to amend the insurance law, in relation to exceptions to the general prohibition on rebating

Purpose

To modernize the insurance law to allow licensed brokers, agents and benefit consultants to assist insurers and employers in the interpretation, management and communication of the insurance policy or annuity contract and its resulting costs, and to assist insurers and employers in the development and implementation of wellness programs, disease management and care coordination services and other incidental or ancillary programs and services.

Summary of provisions

Section 1 of the bill would add a new subsection (d) to §3239 of the insurance law, to enumerate certain exceptions to the anti-rebating and inducement laws for services that insurance producers may provide within the scope of their licensure and as part of commissions paid or fees earned, to insurance carriers and policyholders, such as the development and implementation of wellness programs, disease management and care coordination services and other programs designed to improve quality of care and health outcomes of insured employees, subscribers or enrollees.

Section 2 of the bill would add a new subsection (f) to §4224 of the insurance law, to allow insurance producers, within the scope of their licensure and as part of commissions paid or fees earned, to provide certain services to assist insurers and policyholders in the interpretation, management and communication of insurance policies or annuity contracts and their costs, as well as the development and implementation of wellness programs, disease management and care coordination services, administration of COBRA and New York State continuation of coverage benefits, administration of flexible spending accounts (FSAs) and health reimbursement or savings accounts (HSAs), clinical health advocacy services, including employee, subscriber or enrollee communications, hotlines, "help desks," and web site development, preparation of annual benefit statements, maintenance of membership records, premium reconciliation and billing services, including retiree billing, compliance support, including completion of ERISA form 5500, and financial modeling.

Section 3 of the bill would provide for an immediate effective date.

Justification

The fast-paced and competitive insurance marketplace continues to evolve, and insurance producers must change with it. Integral to this is the modernization of certain statutory restrictions that are old and outmoded. Chief amongst these are the anti-rebating and inducement laws that were originally designed to protect insurance producers and consumers alike from offering and accepting illegal inducements for the sale of insurance products. In today's sophisticated health insurance market, licensed insurance brokers, agents and benefits consultants must be able to offer a full

value-added services platform, such as providing benefits concierge, employee communications, benefits web sites and help desks, benefits statements, compliance support, in order to attract business and close the sale. Employer groups of all sizes are increasingly looking not only for traditional advice in selecting health plan benefits design and coverage options, underwriting to reduce claims losses, and claims servicing and policyholder advocacy, but are also demanding back-office human resources support.

The statutory exceptions and allowances prescribed in this bill would modernize the insurance law with respect to health insurance, and allow insurance producers to keep abreast of the market by lawfully providing such services within the scope of their licensure and practice and as part of commissions paid or fees earned.

Moreover, this bill would codify many of the incidental services excepted from the insurance anti-rebating and inducement laws listed in NYS Insurance Department Circular Letter No.9 (2009) - http://www.ins.state.ny.us/circltr/2009/c109_09.htm

Legislative history

New bill.

Fiscal implications

None.

Effective date

This act shall take effect immediately.