Relates to implementation of the Affordable Health Care Act

Summary of provisions

Section 1 of the bill would amend Insurance Law § 3105 to provide that no misrepresentation shall void a contract of hospital, medical, surgical or prescription drug expense insurance unless, in addition to being material, the misrepresentation was intentional.

Sections 2, 24, 31 and 35 of the bill would amend Insurance Law 3216(a)(4), 4235(f)(1) and (2), 4304(d)(1) and (3) and 4305(c)(1) to require a policy or contract of hospital, medical, surgical or prescription drug expense insurance that covers children to provide coverage to a married or unmarried child until attaining age twenty-six, regardless of the child's financial dependence, residency, student status or employment and to make other technical corrections.

Sections 3, 13, and 25 of the bill would amend Insurance Law 3216(i)(9), 3221 (k)(4), and 4303(a)(2) to amend the existing definition of "emergency condition," add definitions of "emergency services," and "to stabilize" and conform the existing requirements for coverage of emergency services with the enhanced protections of 2719A(b) of the Public Health Service Act, 42 U.S.C. § 300gg-19a(b) with respect to grandfathered and non-grandfathered health plans.

Section 4 of the bill would amend Insurance Law § 3216(i)(11) to make technical corrections to the mammography coverage requirements for consistency with Insurance Law §§ 3221 and 4303. Section 4 would also add the mammography coverage requirements of § 2713 of the Public Health Service Act, 42 U.S.C. § 300gg-13 and clarify that the coverage required by the Public Health Service Act shall not be subject to annual deductibles or coinsurance, nor applicable to grandfathered health plans.

Sections 5, 17 and 28 of the bill would amend Insurance Law 3216(i)(15), 3221 (1)(14) and 4303(t) to add the cervical cytology coverage requirements of § 2713 of the Public Health Service Act, 42 U.S.C. § 300gg-13 and to clarify that the coverage required by the Public Health Service Act shall not be subject to annual deductibles or coinsurance, nor applicable to grand fathered health plans.

Sections 6, 15 and 26 of the bill would amend Insurance Law 3216(i)(17), 3221 (1)(8) and 4303(j) to add the preventive care and screening coverage requirements for children and adults of § 2713 of the Public Health Service Act, 42 U.S.C. § 300gg-13 and to clarify that the coverage required by the Public Health Service Act shall not be subject to annual deductibles or coinsurance, nor applicable to grandfathered health plans.

Sections 7, 18 and 29 of the bill would amend Insurance Law 3216(i)(24)(E), 3221 (1)(15)(E), and 4303(aa)(5) to conform the existing definitions of "prehospital emergency medical services" and "emergency condition" with the enhanced protections of § 2719A of the Public Health Service Act, 42 U.S.C. § 300gg-19a for grand fathered and non-grandfathered health plans.

Sections 8,40 and 60 of the bill would amend Insurance Law §§ 3217-c and 4306-b and Public Health Law §§ 4406-b to conform the existing requirements regarding direct access to primary and preventative obstetric and gynecologic services with § 2719A of the Public Health Service Act, 42 USC. § 300gg-19a for grandfathered and nongrandfathered health plans.

Sections 9, 41 and 59 of the bill would add new Insurance Law 3217-e, 4306-d and amend Public Health Law § 4403(7) to require an insurer or HMO that provides for the designation of a primary care provider to permit an insured/enrollee to designate any participating primary care provider who is available to accept the insured/enrollee, and in the case of a child, to permit the insured/enrollee to designate a physician (allopathic or osteopathic) who specializes in pediatrics if such provider participates in the network of the insurer or HMO.

Sections 10 and 42 of the bill would add new Insurance Law §§ 3217-f and 4306-e to prohibit insurers from establishing a lifetime limit on the dollar amount of essential health benefits in an individual, group or blanket policy or contract of hospital, medical, surgical or prescription drug expense insurance; to provide that for policy or contract years beginning January 1,2014, insurers are prohibited from establishing an annual limit on the dollar amount of essential health benefits in an individual, group or blanket policy or contract of hospital, medical, surgical or prescription drug expense insurance, other than a grandfathered individual policy or contract; and to provide that for policy or contract years beginning prior to January 1, 2014, insurers may establish restricted annual limits on the dollar amount of essential health benefits consistent with § 2711 of the Public Health Service Act, 42 U.S.C. § 300gg-11 or any regulations thereunder.

Sections 11, 19, 20 and 21 of the bill would amend Insurance Law 3221(e), 3221(m), 3221(p) and 3221(q) to clarify that the term "dependent" includes a child as described in Insurance Law § 4235(f).

Section 12 of the bill would amend Insurance Law § 3221 (h) with respect to conversion policies to prohibit an insurer from imposing a lifetime limit on benefits that are defined as essential health benefits under § 1302(b) of the Affordable Care Act, 42 U.S.C. 18022(b).

Sections 14 and 30 of the bill would amend Insurance Law 3221(k)(13) and 4303(bb) to add the bone mineral density coverage requirements of §2713 of the Public Health Service Act, 42 U.S.C. 300gg-13 and to clarify that the coverage required by the Public Health Service Act shall not be subject to annual deductibles or coinsurance, nor applicable to grandfathered health plans.

Sections 16 and 27 of the bill would amend Insurance Law §§ 3221 (1)(11) and 4303(p) to add the mammography coverage requirements of 2713 of the Public Health Service Act, 42 U.S.C. § 300gg-13 and to clarify that the coverage required by the Public Health Service Act shall not be subject to annual deductibles or coinsurance, nor applicable to grandfathered health plans.

Sections 22, 34 and 39 of the bill would amend Insurance Law §§ 3221 (r)(1) and (2), 4304(m)(1) and (2) and 4305(1)(1) and (2) to make technical corrections to provisions regarding coverage for children until age 29.

Sections 23 and 43 of the bill would add new Insurance Law §§ 3232(f), (g), (h), (i) and (j) and 4318(f), (g), (h), (i) and (j) to prohibit insurers in an individual, group or blanket policy or contract of hospital, medical, surgical or prescription drug expense insurance, other than in an individual policy or contract that is a grandfathered health plan, from imposing a pre-existing condition exclusion on children under the age of 19, for consistency with 2704 of the Public Health Service Act, 42 U.S.C. § 300gg-3. Sections 23 and 43 would also provide that beginning January 1, 2014, pursuant to the requirements of §2704 of the Public Health Service Act, 42 U.S.C. § 300gg-3 insurers are prohibited from imposing a pre-existing condition exclusion in any individual, group or blanket policy of hospital, medical, surgical or prescription drug expense insurance other than in an individual policy or contract that is a grandfathered health plan.

Sections 32 and 33 of the bill would amend Insurance Law §§ 4304(e) and 4304(k)(5) to clarify that the term "dependent" includes a child as described in Insurance Law § 4304(d).

Sections 36, 37 and 38 of the bill would amend Insurance Law 4305(d), 4305(e) and 4305(k) to clarify that the term "dependent" includes a child as described in Insurance Law § 4305(c).

Section 44 of the bill would amend Insurance Law § 4321 (c) to provide that with respect to non-grand fathered standardized HMO direct payment contracts, no copayment shall apply to preventive services or bone mineral density coverage required pursuant to § 2713 of the Public Health Service Act, 42 U.S.C. § 300gg-13.

Section 45 of the bill would add a new Insurance Law § 4322(b)(4)(F) to require that non-grand fathered standardized HMO and POS direct payment contracts provide coverage for preventive health services required by § 2713 of the Public Health Service Act, 42 U.S.C. 300gg-13.

Section 46 of the bill would amend Insurance Law § 4322(b)(26) to require that non-grandfathered standardized HMO and POS direct

payment contracts provide bone mineral density coverage required by 2713 of the Public Health Service Act, 42 U.S.C. § 300gg-13.

Section 47 of the bill would amend Insurance Law § 4322(c) and (d) to provide that no copayment shall apply to preventive services or bone mineral density coverage required pursuant to § 2713 of the Public Health Service Act, 42 U.S.C. § 300gg-13. Section 47 would further provide that an out-of-plan lifetime benefit maximum shall not apply to any benefit defined as an essential health benefit in § 1302(b) of the Affordable Care Act, 42 U.S.C. § 18022(b).

Section 48 of the bill would add a new Insurance Law § 4326(d)(15) to require that non-grandfathered Healthy New York contracts provide coverage for preventive health services required by § 2713 of the Public Health Service Act, 42 U.S.C. § 300gg-13.

Section 49 of the bill would amend Insurance Law §4326(e)(6) and (7) to require an individual Healthy New York contract that is a grandfathered health plan to maintain the $3,000 calendar year limit on prescription drug coverage; to provide that the maximum dollar amount on coverage for prescription drugs in an individual contract that is not a grand fathered health plan or in any group contract shall be consistent with §2711 of the Public Health Service Act, 42 U.S.C. § 300gg-11 or any regulations thereunder; and to provide that a copayment shall not apply to preventive health services provided in accordance with Insurance Law § 4322(d)(15).

Section 50 of the bill would amend Insurance Law § 4326(k) to prohibit a Healthy New York contract, other than an individual contract that is a grand fathered health plan, from imposing a pre-existing condition exclusion on children under the age of 19 for conformance with § 2704 of the Public Health Service Act, 42 U.S.C. § 300gg-3. Section 51 would also prohibit a Healthy New York contract, other than a grand fathered individual contract, from imposing a pre-existing condition exclusion beginning January 1, 2014, pursuant to the requirements of § 2704 of the Public Health Service Act, 42 U.S.C. § 300gg-3.

Sections 51 and 61 of the bill would amend Insurance Law § 4900(c) and Public Health Law § 4900(3) to amend the definition of "emergency condition" for conformance with § 2719A(b) of the Public Health Service Act, 42 U.S.C. § 300gg-19a(b).

Sections 52 and 62 of the bill would amend Insurance Law § 4900(g-7) and Public Health Law § 4900(7-g) to remove the requirement that an insured or enrollee have a life-threatening or disabling condition or disease to be eligible for an external appeal of a rare disease.

Sections 53 and 63 of the bill would amend Insurance Law 4910(b)(1)(A) and (B) and Public Health Law § 4910(2)(a)(i) and (ii) to permit an insured or enrollee to pursue an external appeal when a health care service does not meet the health care plan's requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit including when the insured or enrollee is deemed to have exhausted or is not required to complete an internal appeal pursuant to § 2719 of the Public Health Service Act, 42 U.S.C. § 300gg-19.

Sections 54 and 64 of the bill would amend Insurance Law 4910(b)(2)(A), (B) and (C) and Public Health Law § 4910(2)(b)(i), (ii) and (iii) to permit an insured or enrollee to pursue an external appeal of an experimental or investigational treatment denial when the insured or enrollee is deemed to have exhausted or is not required to complete an internal appeal pursuant to § 2719 of the Public Health Service Act, 42 U.S.C. § 300gg-19 and to remove the requirement that an insured or enrollee have a life threatening or disabling condition or disease to be eligible for an external appeal of an experimental or investigational treatment denial.

Sections 55 and 65 of the bill would amend Insurance Law § 4910(c) and Public Health Law § 4910(3) to reduce the $50 fee that a health care plan may currently charge an insured or enrollee for an external appeal to $25 and to provide that an insured or enrollee shall not pay more than $75 within a single plan year.

Sections 56 and 66 of the bill would add new Insurance Law 4912(b)(6) and Public Health Law § 4912(2)(f) to require an organization to be accredited by a nationally recognized private accrediting organization in order to be a certified as an external appeal agent.

Sections 57 and 67 of the bill would amend Insurance Law § 4914(b)(1) and (3) and Public Health Law § 49l4(2)(a) and (c) to provide that an insured or enrollee shall have four months to file an external appeal; to permit an insured or enrollee to obtain an expedited external appeal for reasons permitted by § 2719 of the Public Health Service Act, 42 U.S.C § 300gg-19; and to require that an expedited external appeal be completed in no more than 72 hours.

Sections 58 and 68 of the bill would amend Insurance Law 4914(b)(4)(B)(ii)(a) and Public Health Law § 4914(2)(d)(B)(ii)(1) to remove the requirement that an insured or enrollee have a life-threatening or disabling condition or disease to be eligible for an external appeal of an experimental or investigational treatment denial.

Section 69 of the bill would provide that if any provision of the act or the application thereof shall be held to be invalid, such invalidity shall not affect other provisions of the act which can be given effect without the invalid provision, and, to that end, the provisions of the act are severable.

Section 70 of the bill sets forth the effective date.

Existing law

Insurance Law § 3105 addresses representations by the insured. Insurance Law § 3216 sets forth the requirements for individual accident and health insurance policies issued by commercial insurers. Insurance Law §§ 3217-c and 4306-b and Public Health Law § 4406-b set forth requirements for an insured's direct access to primary and preventive obstetric and gynecologic care. Insurance Law §3221 sets forth requirements for group and blanket accident and health insurance policies issued by commercial insurers. Insurance Law 3232 and 4318 set forth requirements for pre-existing condition

exclusions in health insurance policies. Insurance Law § 4235 sets forth requirements for group accident and health insurance policies issued by commercial insurers, including permissible groups. Insurance Law § 4303 sets forth benefit requirements for contracts issued by Article 43 corporations. Insurance Law § 4304 sets forth requirements for individual contracts issued by Article 43 corporations. Insurance Law § 4305 sets forth requirements for group contracts issued by Article 43 corporations. Insurance Law §§ 4321 and 4322 set forth the requirements for standardized direct payment contracts issued by health maintenance organizations. Insurance Law § 4326 sets forth the requirements for individual and small group contracts issued under the Healthy New York program. Article 49 of the Insurance Law and the Public Health Law establishes a right to utilization review and external appeal for consumers and, in certain cases, health care providers. Public Health Law § 4403 sets forth standards for issuance of a certificate of authority for a health maintenance organization.

Prior legislative history

This is a new bill.

Statement in support

The Patient Protection and Affordable Care Act, Pub. L. 111-148, was enacted on March 23, 2010. The Health Care and Education Reconciliation Act, Pub. L. 111-152, was enacted on March 30, 2010. These Acts, collectively referred to as the "Affordable Care Act", establish consumer protections and mandated benefit requirements ("six month reforms") that apply to health insurance policies issued or renewed on or after September 23, 2010. The Departments of Treasury, Labor, and Health and Human Services also issued several interim regulations to clarify and implement certain provisions of the Affordable Care Act.

The Affordable Care Act and regulations promulgated thereunder include the following protections: requirements for coverage of preventive services for children and adults with no cost-sharing; coverage of children to age 26 regardless of financial dependency, residency, student status or employment; prohibitions on pre-existing condition exclusions for children up to age 19; direct access to obstetric and gynecologic services; choice of primary care physician; coverage of out-of-network emergency services without pre-authorization; internal and external appeals; prohibitions on the dollar amount of lifetime and annual limits with respect to essential health benefits; and permitting rescissions only for fraud or intentional misrepresentation of material fact.

The Affordable Care Act does not preempt state laws that meet or exceed protections offered in the Affordable Care Act. However, state laws that do not meet or exceed the Affordable Care Act protections must be amended for compliance with the Affordable Care Act. New York State Insurance Law and Public Health Law currently include provisions relating to the areas addressed by the "six month changes". This bill would ensure that existing protections in New York State Insurance Law and Public Health Law that meet or exceed the Affordable Care Act protections are maintained, while remaining

provisions are brought into compliance. To the extent that there is overlap between the existing state requirements for coverage of preventive health services and the new Affordable Care Act requirements, coverage must be provided for those overlapping preventive health services with no cost sharing.

Certain Affordable Care Act requirements do not apply to policies that were in effect on March 23, 2010, the date the Affordable Care Act was enacted ("grandfathered health plans"). This bill would maintain the exception for "grand fathered health plans" other than with respect to the requirements for direct access to obstetric and gynecologic services, choice of primary care physician, coverage of emergency services and external appeals. The exception for "grand fathered health plans" was not maintained in the bill with respect to requirements for direct access to obstetric and gynecologic services and choice of primary care physician because existing New York requirements are very similar to the Affordable Care Act requirements and extending the Affordable Care Act requirements would provide consistency among coverages, without impacting cost. In addition, the exception for "grand fathered health plans" was not maintained with respect to requirements for coverage of emergency services and external appeals because uniformity is needed in these areas for consistent claims handling and costs should not be impacted.

The changes contained in this bill are necessary in order for New York State to implement and enforce the federal standards enacted in the Affordable Care Act and the regulations promulgated thereunder.

Budget implications

There are no budget implications from this bill.

Effective date

This bill would take effect immediately. However, for policies renewed on or after that date but before September 23, 2011, the act would take effect upon the renewal date. Further, sections eight, nine, ten, fourteen, fifteen, sixteen, seventeen, eighteen, twenty-three, twenty-six, twenty-seven, twenty-eight, twenty-nine, thirty, forty, forty-one, forty-two and forty-three of the act would, with respect to blanket policies of hospital, medical, surgical or prescription drug expense insurance covering students pursuant to Insurance Law 4237(a)(3)(C), take effect on January 1, 2012 and apply to policies issued or renewed on or after that date. Further, sections fifty-two, fifty-three, fifty-four, fifty-five, fifty-six, fifty-seven, fifty-eight, sixty-two, sixty-three, sixty-four, sixty-five, sixty-six, sixty-seven and sixty-eight of the act would take effect on the later of July 1, 2011 or the date the external appeal requirements of § 2719 of the Public Health Service Act, 42 U.S.C. 300gg-19 are determined to be effective by the Secretary of Health and Human Services and apply to a final adverse determination issued on and after that date.