Relates to self-funded student health benefit plans

1 Co-sponsor

• Thomas F. O'Mara

BILL NUMBER:S7314A

Title of bill

An act to amend the insurance law, in relation to permitting institutions of higher education to self-fund accident and health insurance for their students

Purpose

To allow certain private colleges and universities to self-insure for their students' health insurance.

Summary of provisions

Amends section 1108 and adds a new section 1124 to the insurance law to allow for self-funded student health benefit plans.

Justification

Most of the fifty states allow private colleges and universities to self-insure for their students' health insurance. Colorado, Utah, and Montana have enacted legislation in the last year to permit this in their states. Harvard, Princeton, Dartmouth, Yale, the University of Minnesota and the entire University of California system of eleven campuses self-fund for student health insurance and provide excellent coverage.

Self-funded student health benefit plans allow these universities to provide their students with comprehensive health insurance coverage while reducing their administrative and risk charges.

Sixty percent of employees in the nation who are covered by employer provided health care plans receive their coverage under plans that are self-funded by their employers. At very large employers (those with 5,000 or more employees) it is 93%. Cornell University has self-funded for employee health care since 1938 with excellent results.

Self-funded plans offer significant advantages to employers, including, but not limited to, control over the design of benefit programs, lower administrative service costs, easier access to utilization and claims data which improves employers' ability to evaluate costs and implement cost containment measures, and improved cash flow generated by keeping funds in-house until needed for payment of claims. Well-designed self-funded plans offer students superior health coverage at the lowest possible prices. Universities in New York are working to control costs of attendance and have identified this as an important element of this endeavor and one that has been used successfully by their competitors outside New York State.

This bill would only apply to the most financially stable not-for-profit institutions of higher education that are governed by the New York State Board of Regents. These institutions could apply to the NYS Department of Financial Services where rules and regulations will be promulgated.

Legislative history

New bill.

Fiscal implications

None to State.

Effective date

January 1, 2013, provided that effective immediately, the superintendent of financial services may prescribe an application form and start accepting applications from institutions for certificates of authority; and promulgate any rules and regulations necessary for the implementation of the provisions of this act on its effective date.