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A07737 Summary:

Amd 4304, Ins L
Changes notice requirements for conforming changes to discontinuance notices to not less than ninety days prior written notice.
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A07737 Actions:

05/11/2017referred to insurance
06/06/2017reported referred to rules
06/15/2017rules report cal.405
06/15/2017ordered to third reading rules cal.405
06/19/2017substituted by s5723
 05/22/20171ST REPORT CAL.1081
 05/23/20172ND REPORT CAL.
 06/14/2017PASSED SENATE
 06/14/2017referred to insurance
 06/19/2017substituted for a7737
 06/19/2017ordered to third reading rules cal.405
 06/19/2017passed assembly
 06/19/2017returned to senate
 09/13/2017SIGNED CHAP.317
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A07737 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  TITLE OF BILL: An act to amend the insurance law, in relation to conforming changes to discontinuance notices   PURPOSE: To make discontinuance notices consistent across not-for-profit, HMO, group and commercial plans   SUMMARY OF PROVISIONS: Section 1 of the bill reduces the time period not-for-profit and health maintenance organizations of a notice of the discontinuance of an insur- ance product from 5 months to 90 days. Section 2 of the bill provides an effective date.   JUSTIFICATION: Currently, not-for-profit (NFP) health plans and health maintenance organizations (HMOs) are required to give members notice of the discon- tinuance of an Individual insurance product 5 months prior to termi- nation of coverage, whereas both commercial Individual coverage and group coverage are required to give members a discontinuance notice 90 days prior to termination. This disparity in requirements reflects an arcane and unintended anomaly in the law which creates difficulties in plan administration and provides no tangible benefit to consumers. Specifically, the 5 month notice requirement would require, for January 1 renewals notice of policy discontinuance to be mailed prior to August 1st of the preceding year. Providing notice this far in advance of renewal is prior to both the finalization of rates approved by the Department of Financial Services ("DFS"), prior to the final approval of policy forms and prior to the decision by plans to participate on the Exchange. Thus, the current process not only forces plans to make deci- sions on discontinuing policies prematurely (prior to rates being final- ized), and perhaps unnecessarily alarming consumers, but the additional time is meaningless to consumers because other product options in the market are not available and the corresponding premium is for those alternative products has not yet been finalized. In addition to being administratively burdensome, requiring notices 5 month in advance causes unnecessary alarm for consumers. Consumers may believe that a product is being discontinued when plans have merely preserved their right to discontinue a product after consideration of the adequacy of the promulgated rate. Subsequently, based on the adequa- cy of the rate, the plan may determine not to discontinue to product. Limiting the notice to 90 days, consistent with all other polices, both eliminates the unnecessary anxiety that the 5 month notice bears, but also provides a more meaningful opportunity for consumers to select an alternative product, in the event the plan does in fact discontinue the product. This bill proposes to create a consistent standard across all health plans, which will result in administrative efficiencies and clear commu- nication of intentions to members.   LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediately.
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A07737 Text:

                STATE OF NEW YORK
                               2017-2018 Regular Sessions
                   IN ASSEMBLY
                                      May 11, 2017
        Introduced by M. of A. CAHILL -- read once and referred to the Committee
          on Insurance
        AN  ACT to amend the insurance law, in relation to conforming changes to
          discontinuance notices
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Item (i) of subparagraph (C) of paragraph 2 of subsection
     2  (c) of section 4304 of the insurance law, as amended by chapter  388  of
     3  the laws of 2014, is amended to read as follows:
     4    (i)  Discontinuance  of  a  class of contract upon not less than [five
     5  months'] ninety days' prior written notice. In exercising the option  to
     6  discontinue  coverage  pursuant  to  this item, the corporation must act
     7  uniformly without regard to any health status-related factor of enrolled
     8  individuals or individuals who may become eligible for such coverage and
     9  must offer to subscribers or group remitting agents, as may be appropri-
    10  ate, the option to purchase all other individual health insurance cover-
    11  age currently being offered by the corporation  to  applicants  in  that
    12  market.  Provided,  however,  the  superintendent  may, after giving due
    13  consideration to the public interest, approve a request made by a corpo-
    14  ration for the corporation to satisfy  the  requirements  of  this  item
    15  through  the  offering of contracts at each level of coverage as defined
    16  in section 1302(d) of the affordable care act, 42 U.S.C. § 18022(d) that
    17  contains the benefits described in paragraph one of  subsection  (b)  of
    18  section  four  thousand  three  hundred  twenty-eight of this chapter by
    19  another corporation, insurer or health maintenance  organization  within
    20  the  corporation's  same  holding  company system, as defined in article
    21  fifteen of this chapter.
    22    § 2. This act shall take effect immediately.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
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