STATE OF NEW YORK
________________________________________________________________________
9029
IN ASSEMBLY
January 10, 2020
___________
Introduced by M. of A. GOODELL -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the financial services law, the tax law and the public
health law, in relation to enacting the Health Care Tax Reform Act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "Health
2 Care Tax Reform Act".
3 § 2. Legislative findings. The Legislature hereby finds that:
4 (a) The affordability of health care and health insurance is extremely
5 important in ensuring that the maximum number of New York State resi-
6 dents can obtain high quality affordable health care;
7 (b) Health care and health insurance are currently subject to several
8 taxes that directly and indirectly increase the cost of health insurance
9 coverage, including an annual flat tax on all privately insured people
10 in New York State called the covered lives assessment that raises the
11 costs to health plans by $1.1 Billion, a 9.63% sales tax surcharge on
12 certain hospital based health services that costs consumers $3.6
13 Billion, a 1.75% flat tax on all commercial health insurance policies
14 that costs consumers $350 Million, and a gross receipts tax on insurance
15 companies called a section 206 assessment that costs health plans $149
16 Million a year;
17 (c) Collectively, the taxes on health care and health insurance cost
18 consumers a total of over $5 Billion in 2018, which exceeds the total
19 amount of taxes paid by corporations through the franchise taxes and
20 exceeds all other types of taxes except for personal income taxes and
21 general sales taxes; and
22 (d) The taxes on health care and health insurance are fundamentally
23 regressive taxes because the taxes are unrelated to a consumer's wealth
24 or ability to pay, directly impact hospitalization costs at a time when
25 consumers are facing some of their greatest health care challenges,
26 directly increase the cost of health insurance, and are counterproduc-
27 tive to the public policy objective of making health insurance as
28 affordable as possible.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13935-03-9
A. 9029 2
1 § 3. Section 206 of the financial services law is amended by adding a
2 new subsection (g) to read as follows:
3 (g) For the fiscal year commencing on April first, two thousand twen-
4 ty-one, the commissioner shall only collect eighty per centum of any
5 assessments collected pursuant to this section in the fiscal year
6 commencing on April first, two thousand twenty, and provided further,
7 however, that for the fiscal year commencing on April first, two thou-
8 sand twenty-two, the commissioner shall only collect sixty per centum of
9 any assessments collected pursuant to this section in the fiscal year
10 commencing on April first, two thousand twenty, and provided further,
11 however, that for the fiscal year commencing on April first, two thou-
12 sand twenty-three, the commissioner shall only collect forty per centum
13 of any assessments collected pursuant to this section in the fiscal year
14 commencing on April first, two thousand twenty, and provided further,
15 however, that for the fiscal year commencing on April first, two thou-
16 sand twenty-four, the commissioner shall only collect twenty per centum
17 of any assessments collected pursuant to this section in the fiscal year
18 commencing on April first, two thousand twenty, and provided further,
19 however, that for the fiscal year commencing on April first, two thou-
20 sand twenty-five, no such assessment under this section shall be
21 collected.
22 § 4. Section 1502-a of the tax law, as amended by section 2 of part
23 B-1 of chapter 57 of the laws of 2009 and as further amended by section
24 104 of part A of chapter 62 of the laws of 2011, is amended to read as
25 follows:
26 § 1502-a. Tax on non-life insurance corporations. (a) In lieu of the
27 tax imposed by section fifteen hundred one of this article, every domes-
28 tic insurance corporation, every foreign insurance corporation and every
29 alien insurance corporation, other than such corporations transacting
30 the business of life insurance, (1) authorized to transact business in
31 this state under a certificate of authority from the superintendent of
32 financial services[,] or (2) that is a risk retention group as defined
33 in subsection (n) of section five thousand nine hundred two of the
34 insurance law, [or (3) that is a health maintenance organization
35 required to obtain a certificate of authority under article forty-four
36 of the public health law,] shall, for the privilege of exercising corpo-
37 rate franchises or for carrying on business in a corporate or organized
38 capacity within this state, and in addition to any other taxes imposed
39 for such privilege, pay a tax on all gross direct premiums, less return
40 premiums thereon, written on risks located or resident in this state.
41 The tax imposed by this section shall be computed in the manner set
42 forth in subdivision (a) of section fifteen hundred ten of this article
43 as such subdivision applied to taxable years beginning before January
44 first, two thousand three, except that the rate of tax imposed by this
45 section shall be [one and seventy-five hundredths percent on all gross
46 direct premiums, less return premiums thereon, for accident and health
47 insurance contracts, including contracts with health maintenance organ-
48 izations for health services, and] two percent on all [other] such
49 premiums except accident and health insurance contracts, including
50 contracts with health maintenance organizations for health services.
51 (b) In lieu of the tax imposed by section fifteen hundred one of this
52 article, every domestic insurance corporation, every foreign insurance
53 corporation and every alien insurance corporation, other than such
54 corporations transacting the business of life insurance that is a health
55 maintenance organization required to obtain a certificate of authority
56 under article forty-four of the public health law, shall, for the privi-
A. 9029 3
1 lege of exercising corporate franchises or for carrying on business in a
2 corporate or organized capacity within this state, and in addition to
3 any other taxes imposed for such privilege, pay a tax on all gross
4 direct premiums, less return premiums thereon, written on risks located
5 or resident in this state. The tax imposed by this section shall be
6 computed in the manner set forth in subdivision (a) of section fifteen
7 hundred ten of this article as such subdivision applied to taxable years
8 beginning before January first, two thousand three, except that the rate
9 of tax imposed by this section shall be one and seventy-five hundredths
10 percent on all gross direct premiums, less return premiums thereon, for
11 accident and health insurance contracts, including contracts with health
12 maintenance organizations for health services, provided, however, that
13 for the taxable year beginning January first, two thousand twenty-one,
14 the percentage shall be one and four tenths percent, and provided
15 further, however, that for the taxable year beginning January first, two
16 thousand twenty-two, the percentage shall be one and five hundredths
17 percent, and provided further, however, that for the taxable year begin-
18 ning January first, two thousand twenty-three, the percentage shall be
19 seven tenths of one percent, and provided further, however, that for the
20 taxable year beginning January first, two thousand twenty-four, the
21 percentage shall be thirty-five hundredths of one percent, and provided
22 further, however, that for the taxable years beginning on and after
23 January first, two thousand twenty-five, no such tax shall be imposed.
24 (c) All the other provisions in section fifteen hundred ten of this
25 article as amended from time to time, other than subdivision (b) of such
26 section, shall apply to the tax imposed by this section. In no event
27 shall the tax imposed under this section be less than two hundred fifty
28 dollars.
29 § 5. Subdivision 2 of section 2807-j of the public health law, as
30 amended by section 41 of part B of chapter 58 of the laws of 2005 and
31 paragraphs (b), (c), (d), and (e) as amended by section 50 of part B of
32 chapter 58 of the laws of 2009, is amended to read as follows:
33 2. (a) The total percentage allowance for any period during the period
34 January first, nineteen hundred ninety-seven through December thirty-
35 first, nineteen hundred ninety-nine and on and after January first, two
36 thousand, for a designated provider of services applicable to a payor
37 shall be determined in accordance with this subdivision and applied to
38 net patient service revenues.
39 (b) The total percentage allowance for each payor, other than govern-
40 mental agencies, or health maintenance organizations for services
41 provided to subscribers eligible for medical assistance pursuant to
42 title eleven of article five of the social services law, or approved
43 organizations for services provided to subscribers eligible for the
44 family health plus program pursuant to title eleven-D of article five of
45 the social services law, and other than payments for a patient that has
46 no third-party coverage in whole or in part for services provided by a
47 designated provider of services, shall be:
48 (i) the sum of (A) eight and eighteen-hundredths percent, provided,
49 however, that for services provided on and after July first, two thou-
50 sand three, the percentage shall be eight and eighty-five hundredths
51 percent, and further provided that for services provided on and after
52 January first, two thousand six, the percentage shall be eight and nine-
53 ty-five hundredths percent, and further provided that for services
54 provided on and after April first, two thousand nine, the percentage
55 shall be nine and sixty-three hundredths percent, and further provided
56 that for services provided on and after April first, two thousand twen-
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1 ty, the percentage shall be twenty-two and sixty-one hundredths percent,
2 and further provided that for services provided on and after April
3 first, two thousand twenty-one, the percentage shall be sixteen and
4 ninety-six hundredths percent, and further provided that for services
5 provided on and after April first, two thousand twenty-two, the percent-
6 age shall be eleven and thirty-one hundredths percent, and further
7 provided that for services provided on and after April first, two thou-
8 sand twenty-three, the percentage shall be five and sixty-five
9 hundredths percent, and further provided that for services provided on
10 and after April first, two thousand twenty-four, the percentage shall be
11 zero percent, plus (B) twenty-four percent, provided, however, that for
12 services provided on and after July first, two thousand three, the
13 percentage shall be twenty-five and ninety-seven hundredths percent, and
14 further provided that for services provided on and after January first,
15 two thousand six, the percentage shall be twenty-six and twenty-six
16 hundredths percent, and further provided that for services provided on
17 and after April first, two thousand nine, the percentage shall be twen-
18 ty-eight and twenty-seven hundredths percent, and further provided that
19 for services provided on and after April first, two thousand twenty, the
20 percentage shall be twenty-two and sixty-one hundredths percent, and
21 further provided that for services provided on and after April first,
22 two thousand twenty-one, the percentage shall be sixteen and ninety-six
23 hundredths percent, and further provided that for services provided on
24 and after April first, two thousand twenty-two, the percentage shall be
25 eleven and thirty-one hundredths percent, and further provided that for
26 services provided on and after April first, two thousand twenty-three,
27 the percentage shall be five and sixty-five hundredths percent, and
28 further provided that for services provided on and after April first,
29 two thousand twenty-four, the percentage shall be zero percent, and plus
30 (C) for a specified third-party payor as defined in subdivision one-a of
31 section twenty-eight hundred seven-s of this article the percentage
32 allowance applicable for a general hospital for inpatient hospital
33 services pursuant to subdivision two of section twenty-eight hundred
34 seven-s of this article;
35 (ii) unless (A) an election in accordance with paragraph (a) of subdi-
36 vision five of this section to pay the allowance directly to the commis-
37 sioner or the commissioner's designee is in effect for a third-party
38 payor, and in addition (B) for a specified third-party payor an election
39 to pay the assessment in accordance with section twenty-eight hundred
40 seven-t of this article is in effect.
41 (c) If an election in accordance with subdivision five of this section
42 is in effect for a third-party payor and in addition in accordance with
43 section twenty-eight hundred seven-t of this article for a specified
44 third-party payor, the total percentage allowance factor shall be
45 reduced to eight and eighteen-hundredths percent, provided, however,
46 that for services provided on and after July first, two thousand three
47 the total percentage allowance factor shall be reduced to eight and
48 eighty-five hundredths percent, and further provided that for services
49 provided on and after January first, two thousand six, the total
50 percentage allowance factor shall be reduced to eight and ninety-five
51 hundredths percent, and further provided that for services provided on
52 and after April first, two thousand nine, the total percentage allowance
53 factor shall be reduced to nine and sixty-three hundredths percent and
54 further provided that for services provided on and after April first,
55 two thousand twenty, the percentage shall be seven and seventy-one
56 hundredths percent, and further provided that for services provided on
A. 9029 5
1 and after April first, two thousand twenty-one, the percentage shall be
2 five and seventy-nine hundredths percent, and further provided that for
3 services provided on and after April first, two thousand twenty-two, the
4 percentage shall be three and eighty-six hundredths percent, and further
5 provided that for services provided on and after April first, two thou-
6 sand twenty-three, the percentage shall be one and ninety-three
7 hundredths percent, and further provided that for services provided on
8 and after April first, two thousand twenty-four, the percentage shall be
9 zero percent.
10 (d) The total percentage allowance for payments by governmental agen-
11 cies, as determined in accordance with paragraphs (a) and (a-1) of
12 subdivision one of section twenty-eight hundred seven-c of this article
13 as in effect on December thirty-first, nineteen hundred ninety-six, or
14 health maintenance organizations for services provided to subscribers
15 eligible for medical assistance pursuant to title eleven of article five
16 of the social services law, or approved organizations for services
17 provided to subscribers eligible for the family health plus program
18 pursuant to title eleven-D of article five of the social services law,
19 shall be five and ninety-eight-hundredths percent, provided, however,
20 that for services provided on and after July first, two thousand three
21 the total percentage allowance shall be six and forty-seven hundredths
22 percent, and further provided that for services provided on and after
23 January first, two thousand six, the total percentage allowance shall be
24 six and fifty-four hundredths percent, and further provided that for
25 services provided on and after April first, two thousand nine, the total
26 percentage allowance shall be seven and four hundredths percent and
27 further provided that for services provided on and after April first,
28 two thousand twenty, the percentage shall be five and sixty-three
29 hundredths percent, and further provided that for services provided on
30 and after April first, two thousand twenty-one, the percentage shall be
31 four and twenty-two hundredths percent, and further provided that for
32 services provided on and after April first, two thousand twenty-two, the
33 percentage shall be two and eighty-two hundredths percent, and further
34 provided that for services provided on and after April first, two thou-
35 sand twenty-three, the percentage shall be one and forty-one hundredths
36 percent, and further provided that for services provided on and after
37 April first, two thousand twenty-four, the percentage shall be zero
38 percent.
39 (e) The total percentage allowance for payments for services provided
40 by designated providers of services for which there is no third-party
41 coverage in whole or in part shall be eight and eighteen-hundredths
42 percent, provided, however, that for services provided on and after July
43 first, two thousand three the total percentage allowance shall be eight
44 and eighty-five hundredths percent, and further provided that for
45 services provided on and after January first, two thousand six, the
46 total percentage allowance shall be eight and ninety-five hundredths
47 percent, and further provided that for services provided on and after
48 April first, two thousand nine, the total percentage allowance shall be
49 nine and sixty-three hundredths percent and further provided that for
50 services provided on and after April first, two thousand twenty, the
51 percentage shall be seven and seventy-one hundredths percent, and
52 further provided that for services provided on and after April first,
53 two thousand twenty-one, the percentage shall be five and seventy-nine
54 hundredths percent, and further provided that for services provided on
55 and after April first, two thousand twenty-two, the percentage shall be
56 three and eighty-six hundredths percent, and further provided that for
A. 9029 6
1 services provided on and after April first, two thousand twenty-three,
2 the percentage shall be one and ninety-three hundredths percent, and
3 further provided that for services provided on and after April first,
4 two thousand twenty-four, the percentage shall be zero percent. This
5 paragraph shall not apply to patient deductibles and coinsurance
6 amounts.
7 (f) The total percentage allowance for patient deductibles and coinsu-
8 rance amounts shall be the same percentage allowance applicable to
9 payments by the primary third-party payor covering the patient in each
10 case determined in accordance with paragraphs (a), (b) and (c) of this
11 subdivision.
12 (g) The total percentage allowance for secondary third-party payors
13 under coordination of benefits principles shall be the same percentage
14 allowance applicable to payments by the primary third-party payor in the
15 case determined in accordance with paragraphs (a), (b) and (c) of this
16 subdivision.
17 § 6. Subdivision 2 of section 2807-s of the public health law, as
18 added by chapter 639 of the laws of 1996, subparagraph (ii) of paragraph
19 (b) of subdivision 2 as amended by chapter 1 of the laws of 1999, para-
20 graph (c) as amended by section 15 of part A-3 of chapter 62 of the laws
21 of 2003, subparagraphs (ii) of paragraph (c) as amended and (iii) of
22 paragraph (c) as added by section 31 of part B of chapter 58 of the laws
23 of 2005, and subparagraph (iv) of paragraph (c) as added by section 21
24 of part A of chapter 58 of the laws of 2007, is amended to read as
25 follows:
26 2. (a) The regional percentage allowance for any period during the
27 period January first, nineteen hundred ninety-seven through December
28 thirty-first, nineteen hundred ninety-nine for all general hospitals in
29 the region applicable to a specified third-party payor, and applicable
30 to related patient coinsurance and deductible amounts and to secondary
31 third-party payors under coordination of benefits principles, shall be
32 the following, and shall be applied to inpatient hospital net patient
33 service revenues:
34 (b) the result expressed as a percentage of:
35 (i) for each region, the amount allocated to the region in accordance
36 with subdivision six of this section, divided by
37 (ii) the total estimated nineteen hundred ninety-six general hospital
38 inpatient revenue of all general hospitals in the region, excluding (A)
39 an estimate of revenue from services provided to beneficiaries of title
40 XVIII of the federal social security act (medicare), (B) an estimate of
41 revenue from services provided to patients eligible for payments by
42 governmental agencies, patients eligible for payments pursuant to the
43 comprehensive motor vehicle insurance reparations act, the workers'
44 compensation law, the volunteer firefighters' benefit law, and the
45 volunteer ambulance workers' benefit law, and self-pay patients, (C)
46 from general hospitals providing graduate medical education in the
47 aggregate an amount equal to the amount specified in subparagraph (i) of
48 this subdivision, other than the components of such amount allocable to
49 payors specified in clause (B) of this subparagraph, and (D) an estimate
50 of revenue reductions related to negotiated reimbursement in nineteen
51 hundred ninety-seven with specified third-party payors which shall be a
52 uniform statewide percentage estimated reduction.
53 (c) (i) The regional percentage allowance for the periods January
54 first, two thousand through June thirtieth, two thousand three, for all
55 general hospitals in the region applicable to specified third-party
56 payors, and applicable to related patient coinsurance and deductible
A. 9029 7
1 amounts, shall be the same regional percentage allowance calculated
2 pursuant to paragraph (b) of this subdivision for the period January
3 first, nineteen hundred ninety-nine through December thirty-first, nine-
4 teen hundred ninety-nine.
5 (ii) The regional percentage allowance for the periods July first, two
6 thousand three through December thirty-first, two thousand five, for all
7 general hospitals in the region applicable to specified third-party
8 payors, and applicable to related patient coinsurance and deductible
9 amounts, shall be the same regional percentage allowance calculated
10 pursuant to paragraph (b) of this subdivision for the period January
11 first, nineteen hundred ninety-nine through December thirty-first, nine-
12 teen hundred ninety-nine multiplied by one hundred eight and nineteen
13 hundredths percent.
14 (iii) The regional percentage allowance for the periods January first,
15 two thousand six through June thirtieth, two thousand seven, for all
16 general hospitals in the region applicable to specified third-party
17 payors, and applicable to related patient coinsurance and deductible
18 amounts, shall be the same regional percentage allowance calculated
19 pursuant to subparagraph (ii) of this paragraph for the period January
20 first, two thousand five through December thirty-first, two thousand
21 five multiplied by one hundred one and thirteen hundredths percent.
22 (iv) The regional percentage allowance for periods [on and after] July
23 first, two thousand seven through March thirtieth, two thousand twenty,
24 for all general hospitals in the region applicable to specified third-
25 party payors, and applicable to related patient coinsurance and deduct-
26 ible amounts, shall be the same regional percentage allowance calculated
27 pursuant to subparagraph (iii) of this paragraph for the period January
28 first, two thousand six through June thirtieth, two thousand seven.
29 (v) The regional percentage allowance for periods April first, two
30 thousand twenty through March thirtieth, two thousand twenty-one, for
31 all general hospitals in the region applicable to specified third-party
32 payors, and applicable to related patient coinsurance and deductible
33 amounts, shall be the same regional percentage allowance calculated
34 pursuant to paragraph (b) of this subdivision for the period January
35 first, nineteen hundred ninety-nine through December thirty-first, nine-
36 teen hundred ninety-nine multiplied by ninety-seven and seventy-one
37 hundredths percent.
38 (vi) The regional percentage allowance for periods April first, two
39 thousand twenty-one through March thirtieth, two thousand twenty-two,
40 for all general hospitals in the region applicable to specified third-
41 party payors, and applicable to related patient coinsurance and deduct-
42 ible amounts, shall be the same regional percentage allowance calculated
43 pursuant to paragraph (b) of this subdivision for the period January
44 first, nineteen hundred ninety-nine through December thirty-first, nine-
45 teen hundred ninety-nine multiplied by seventy-three and twenty-nine
46 hundredths percent.
47 (vii) The regional percentage allowance for periods April first, two
48 thousand twenty-two through March thirtieth, two thousand twenty-three,
49 for all general hospitals in the region applicable to specified third-
50 party payors, and applicable to related patient coinsurance and deduct-
51 ible amounts, shall be the same regional percentage allowance calculated
52 pursuant to paragraph (b) of this subdivision for the period January
53 first, nineteen hundred ninety-nine through December thirty-first, nine-
54 teen hundred ninety-nine multiplied by forty-eight and eighty-six
55 hundredths percent.
A. 9029 8
1 (viii) The regional percentage allowance for periods April first, two
2 thousand twenty-three through March thirtieth, two thousand twenty-four,
3 for all general hospitals in the region applicable to specified third-
4 party payors, and applicable to related patient coinsurance and deduct-
5 ible amounts, shall be the same regional percentage allowance calculated
6 pursuant to paragraph (b) of this subdivision for the period January
7 first, nineteen hundred ninety-nine through December thirty-first, nine-
8 teen hundred ninety-nine multiplied by twenty-four and forty-three
9 hundredths percent.
10 § 7. This act shall take effect immediately; provided, however, that
11 the amendments to section 2807-j of the public health law made by
12 section five of this act shall not affect the expiration of such section
13 and shall expire therewith; provided further, however, that the amend-
14 ments to section 2807-s of the public health law made by section six of
15 this act shall not affect the expiration of such section and shall
16 expire therewith.
