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A07828 Summary:

BILL NOA07828A
 
SAME ASSAME AS S05715-A
 
SPONSORWeinstein
 
COSPNSR
 
MLTSPNSR
 
Amd SS5-101 & 5-335, Gen Ob L
 
Protects the parties to a tort settlement from any claims by an insurer.
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A07828 Actions:

BILL NOA07828A
 
06/05/2013referred to judiciary
06/12/2013reported referred to codes
06/17/2013reported referred to rules
06/17/2013amend and recommit to rules 7828a
06/18/2013reported
06/18/2013rules report cal.479
06/18/2013ordered to third reading rules cal.479
06/20/2013passed assembly
06/20/2013delivered to senate
06/20/2013REFERRED TO RULES
06/21/2013SUBSTITUTED FOR S5715A
06/21/20133RD READING CAL.1619
06/21/2013PASSED SENATE
06/21/2013RETURNED TO ASSEMBLY
11/01/2013delivered to governor
11/13/2013signed chap.516
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A07828 Floor Votes:

DATE:06/20/2013Assembly Vote  YEA/NAY: 132/10
AbbateYCrespoYGoodellNOLupardoYPaulinYSimanowitzY
AbinantiYCrouchYGottfriedYLupinacciYPeoples-StokesYSimotasY
ArroyoYCurranYGrafYMageeYPerryYSkartadosY
AubryYCusickYGuntherYMagnarelliYPretlowYSkoufisY
BarclayYCymbrowitzYHawleyYMaiselYQuartYSolagesY
BarrettYDenDekkerYHeastieERMalliotakisYRaYStecY
BarronYDinowitzYHennesseyYMarkeyYRabbittYSteckY
BenedettoYDiPietroNOHevesiYMayerYRaiaYStevensonAB
BlankenbushYDupreyYHikindERMcDonaldYRamosYStirpeY
BorelliYEnglebrightYHooperYMcDonoughYReilichYSweeneyY
BoylandABEspinalYJacobsYMcKevittYRiveraYTediscoY
BraunsteinYFahyYJaffeeYMcLaughlinYRobertsYTenneyNO
BrennanYFarrellYJohnsYMillerYRobinsonYThieleY
BrindisiYFinchYJordanYMillmanYRodriguezYTitoneY
BronsonYFitzpatrickYKatzNOMontesanoYRosaYTitusY
Brook-KrasnyYFriendNOKavanaghYMorelleYRosenthalYWalterNO
BuchwaldYGabryszakYKearnsYMosleyYRozicYWeinsteinY
ButlerYGalefYKellnerYMoyaYRussellYWeisenbergY
CahillYGanttYKimYNojayYRyanYWeprinY
CamaraYGarbarinoYKolbYNolanYSaladinoYWrightY
CerettoYGibsonYLalorNOOaksYSantabarbaraYZebrowskiY
ClarkYGiglioYLavineYO'DonnellYScarboroughYMr SpkrY
ColtonYGjonajERLentolYOrtizYSchimelY
CookYGlickYLiftonYOtisYSchimmingerNO
CorwinNOGoldfederYLopezYPalmesanoNOSepulvedaY

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A07828 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7828A
 
SPONSOR: Weinstein
  TITLE OF BILL: An act to amend the general obligations law, in relation to protecting parties to the settlement of a tort claim from certain unwarranted lien, reimbursement and subrogation claims   PURPOSE OF BILL: Chapter 494 of the laws of 2009, inter alia added a new subdivision 4 to section 5-101 of the general obligations law and amended section 5-335 of the general obligations law. That legislation was intended to protect parties to the settlement of a tort claim from certain unwarranted lien, reimbursement and subrogation claims by insur- ers. The purpose of this bill is to correct any misunderstanding as to the applicability and scope of that law by refining its definition and applicability to precluding liens, reimbursements and subrogation claims with respect to any cost of health care services, loss of earnings or other economic loss to the extent those losses or expenses have been or are obligated to be paid or reimbursed by an insurer.   SUMMARY OF PROVISIONS OF BILL: This bill would provide for the following: 1) It will now be conclusively presumed that, except with respect to Medicare, Medicaid, Automobile No-Fault or Workers' Compensation payments for which there is a statutory right of reimbursement, the monies paid in settlement of any personal injury or wrongful death action did not include compensation for the losses or expenses that were or will be paid by an insurer; and 2) Except for those payments made by Medicare, Medicaid or an insurer providing Workers' Compensation benefits for which there is a statutory right of reimbursement, no defendant that enters into a settlement with the personal injury or wrongful death plaintiff shall be thereafter subject to any insurers' claim for subrogation or reimbursement.   JUSTIFICATION: In 2009, the legislature enacted the current General Obligations Law §§ 5-101 and 5-335 to protect plaintiffs and defendants from unwarranted liens, reimbursement and subrogation claims by insur- ers. Since the 2009 enactment of the current law, it has been relied upon by all parties to settlements involving tort claims. In a recent federal court decision (Wurtz v. Rawlings Co., LLC, 2013 WL 1248631 (E.D.N.Y.)), federal ERISA law was found to preempt New York's General Obligation Law with regard to an insurer's (of an ERISA plan) right of subrogation, undermining the intent of this legislature. This bill is a corrective measure that will bring the General Obligation Law clearly under ERISA's savings clause, which allows States to regu- late an insurer's subrogation rights. As this was the legislature's original intent, the bill will apply to all settlements entered into on or after November 12, 2009 -- the effective date of that year's amend- ments to the relevant provisions of the General Obligations Law. This will ensure that parties who have entered into settlements in the expec- tation that New York law apply, will not now be harmed by this federal court's ruling.   LEGISLATIVE HISTORY: New bill, 2013.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT: None.   EFFECTIVE DATE: Immediately apply to any settlement entered into on or after November 12, 2009.
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A07828 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7828--A
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 5, 2013
                                       ___________
 
        Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
          Committee on Judiciary -- reported and referred to  the  Committee  on
          Codes  --  reported  and  referred  to the Committee on Rules -- Rules
          Committee discharged, bill amended, ordered reprinted as  amended  and
          recommitted to the Committee on Rules
 

        AN  ACT  to amend the general obligations law, in relation to protecting
          parties to the settlement of a tort  claim  from  certain  unwarranted
          lien, reimbursement and subrogation claims
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Legislative intent. The legislature finds that  the  resol-
     2  ution  and  settlement of certain types of claims have been impeded as a
     3  result of health insurers' attempts  to  intervene  into  pending  liti-
     4  gation,  as  well  as  similar  attempts  to  institute  subrogation and
     5  reimbursement actions against litigants.  As  a  result,  settlement  of
     6  claims  made by accident victims and others are imperiled and prevented,
     7  thus causing undue burdens and pressures upon the court system. In addi-

     8  tion, defendants in such actions are being subjected to claims  made  by
     9  health insurers, exposing them to additional liability.
    10    Chapter 494 of the laws of 2009 was enacted to add a new subdivision 4
    11  to section 5-101 of the general obligations law and to add a new section
    12  5-335  of the general obligations law "in relation to protecting parties
    13  to the settlement  of  a  tort  claim  from  certain  unwarranted  lien,
    14  reimbursement  and subrogation claims".  However, one federal court, the
    15  United States District Court for the Eastern District of  New  York,  in
    16  Wurtz v. Rawlings Co., LLC, 2013 WL1248631 (E.D.N.Y), has held that this
    17  legislation  was  preempted  to  the  extent  it  applies to any insured
    18  employee benefit plan covered by the Employee Retirement Income Security
    19  Act of 1974, as amended (ERISA).  The instant legislation is intended to

    20  make clear the original purpose of  sections  5-101  and  5-335  of  the
    21  general  obligations  law  which  is to ensure that insurers will not be
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11329-05-3

        A. 7828--A                          2
 
     1  able to claim or access any monies paid in settlement of  a  tort  claim
     2  whether  by way of a lien, a reimbursement claim, subrogation, or other-
     3  wise so that the burden of payment for health care services,  disability
     4  payments,  lost  wage  payments or any other benefits for the victims of
     5  torts will be borne by the insurer and not any party to a settlement  of
     6  such  a  victim's tort claim.   This law is specifically directed toward

     7  entities engaged in providing health insurance, thus falling  under  the
     8  "savings"  clause  contained  in ERISA, which reserves to the states the
     9  right and the ability to regulate insurance.
    10    § 2. Subdivision 4 of section 5-101 of the general obligations law, as
    11  added by section 7 of part F of chapter 494 of  the  laws  of  2009,  is
    12  amended to read as follows:
    13    4.  As  used  in  section  5-335  of  this article, the term ["benefit
    14  provider"] "insurer" means any [insurer,  health  maintenance  organiza-
    15  tion,  health  benefit  plan,  preferred provider organization, employee
    16  benefit plan] insurance company  or  other  entity  which  provides  for
    17  payment  or reimbursement of health care expenses, health care services,

    18  disability payments, lost wage payments or any other  benefits  under  a
    19  policy  of  insurance  or  an  insurance  contract with an individual or
    20  group.
    21    § 3. Section 5-335 of the general obligations law, as added by section
    22  8 of part F of chapter 494 of the laws of 2009, is amended  to  read  as
    23  follows:
    24    §  5-335.  Limitation of [non-statutory] reimbursement and subrogation
    25  claims in personal injury and wrongful death actions. (a) When a [plain-
    26  tiff] person settles [with] a claim, whether in litigation or otherwise,
    27  against one or more [defendants in an action] other persons for personal
    28  injuries, medical, dental, or podiatric malpractice, or wrongful  death,
    29  it  shall  be conclusively presumed that the settlement does not include

    30  any compensation for the cost of health care services, loss of  earnings
    31  or  other economic loss to the extent those losses or expenses have been
    32  or are obligated to be paid or reimbursed by [a benefit provider, except
    33  for those payments as to which there is a statutory right of  reimburse-
    34  ment]  an insurer.   By entering into any such settlement, a [plaintiff]
    35  person shall not be deemed to have taken an action in derogation of  any
    36  [nonstatutory]  right  of any [benefit provider] insurer that paid or is
    37  obligated to pay those losses or expenses;  nor  shall  a  [plaintiff's]
    38  person's  entry  into  such  settlement  constitute  a  violation of any

    39  contract between the [plaintiff]  person  and  such  [benefit  provider]
    40  insurer.
    41    [Except  where  there is a statutory right of reimbursement, no party]
    42  No person entering into such a settlement shall be subject to a subroga-
    43  tion claim or claim for reimbursement by [a benefit provider] an insurer
    44  and [a benefit provider] an insurer shall  have  no  lien  or  right  of
    45  subrogation or reimbursement against any such settling [party] person or
    46  any  other  party  to such a settlement, with respect to those losses or
    47  expenses that have been or are obligated to be  paid  or  reimbursed  by
    48  said [benefit provider] insurer.
    49    (b)  This  section shall not apply to a subrogation claim for recovery

    50  of additional first-party benefits provided pursuant to  article  fifty-
    51  one of the insurance law. The term "additional first-party benefits", as
    52  used  in  this  subdivision,  shall  have  the  same meaning given it in
    53  section 65-1.3 of title 11 of the codes, rules and  regulations  of  the
    54  state of New York as of the effective date of this statute.
    55    (c)  This  section  shall  not apply to a subrogation or reimbursement
    56  claim for recovery of benefits provided by Medicare or Medicaid, specif-

        A. 7828--A                          3
 
     1  ically authorized pursuant to article fifty-one of the insurance law, or
     2  pursuant to a policy of insurance or  an  insurance  contract  providing
     3  workers' compensation benefits.
     4    §  4.  This  act  shall take effect immediately and shall apply to all

     5  settlements entered into on or after November 12, 2009.
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