Relates to authorizing the issuance of certain accident and health insurance policies to an institution of higher education

Summary of provisions

The bill amends § 3240(a) of the insurance law to clarify that New York law does not prohibit the issuance of policies offering certain "excepted benefits," such as dental, vision, or intercollegiate sports injury coverage, to institutions of higher learning The bill also adds a new § 3240(j) of the insurance law to clarify that an "intercollegiate sports injury" accident insurance policy should be considered primary coverage and any "student accident and health policy" issued to a college or university should be considered secondary to such intercollegiate sports injury coverage, so long as the coverage provided under the interscholastic sports policy meets the conditions provided in § 3240(a)(1)(A)(ii)(I)-(VII) of the bill,

Existing law

Existing law does not distinguish between traditional student accident and health insurance policies providing coverage for hospital, medical and surgical expense and policies of excepted benefits (such as dental, vision, accident or supplemental insurance policies) Current regulations allow for the exclusion of interscholastic sports injuries in blanket policies; however, the Department of Financial Services (DFS) has raised questions regarding the permissibility of such exclusions, in view of recent statutory changes. See 11 NYCRR 52 16(c)(4)(iv)

Justification

New York recently enacted legislation designed to conform their requirements for student health insurance to the requirements set forth in the Affordable Care Act ("ACA"), including the ACA requirement that student health insurance policies include a comprehensive set of "essential health benefits" which are not subject to annual or lifetime dollar limitations. New York's conforming legislation was aimed at traditional student health insurance policies subject to ACA requirements Such policies are typically offered by institutions of higher education as a comprehensive health insurance option for students that do not have access to health insurance through a parent's plan. However, New York's legislation did not distinguish between traditional student health insurance policies and "excepted benefits" policies such as accident, dental, and vision policies, which are also currently being purchased by institutions of higher learning.

New York has interpreted its ACA conforming legislation as requiring all policies issued to students of institutions of higher education to include comprehensive essential health benefits without annual or life-time dollar limitations. This interpretation has raised questions

regarding whether it is permissible to issue student policies in the college market providing dental coverage; vision coverage; and other intercollegiate sports injury coverage recognized by the ACA as "excepted benefits " Such policies do not offer "essential health benefits" without limitation Dental policies, foi example, do not typically include maternity or mammography benefits because it falls outside of the intended scope of the policy. However, dental policies do provide students with important health coverage that may not be included in their comprehensive medical plan. New York's interpretation has also raised questions as to whether insurers can provide institutions of higher learning with accident policies protecting student athletes when they are injured during intercollegiate sports competitions These policies are critical to the financial well-being of the institutions and their students.

Relating to the intercollegiate sports injury coverage, the NCAA currently extends catastrophic coverage to student athletes. The NCAA picks up all of a student athlete's expenses over and above $90,000 Schools must find a way to cover the first $90,000 in expenses (smaller colleges that do not participate in the NCAA have similar arrangements with different athletic associations, although the dollar amounts after which the athletic association assumes liability may differ- i e , $25K or $50K). NCAA coverage is first dollar coverage and it is available without restrictions as to networks or providers, so the coverage is typically more flexible than the coverage available to students for the first $90,000 in expenses NCAA coverage also has a "longer tail" than the coverage provided by the college, which allows athletes to receive benefits from the NCAA policy even after they have graduated.

New York has interpreted its ACA conforming legislation to prohibit insurers from issuing sports accident policies covering the first $90,000 of a student athlete's expenses as required by the NCAA. Additionally, New York has interpreted the conforming legislation as prohibiting any coordination of benefits between student health policies with accident policies providing coverage of interscholastic sports injuries. Prohibiting coordination between student health policies and the NCAA policies unnecessarily forces up the cost of student health insurance premiums, which places New York's schools and their sports programs at a financial disadvantage.

Although DFS has not directed companies to terminate existing excepted benefits policies issued to institutions of higher education, DFS has refused to approve policy amendments and new policies. Insurers and institutions of higher education cannot operate effectively without clarification.

Although DFS has not directed companies to terminate existing excepted benefits policies issued to institutions of higher education, DFS has refused to approve policy amendments and new policies. Insurers and institutions of higher education cannot operate effectively without clarification

Legislative history

Section 3240 of the Insurance Law was enacted in Part D of the FY 2013/14 Budget S 2606-d/A 3006-D

Fiscal implications

None

Effective date

This act shall take effect immediately and shall be deemed to have been in full force and effect on the same date as section 411 of part D of chapter 56 of the laws of 2013 took effect.