Sec. 52.1. Preamble

(a) Health insurance provides the mechanism through which most people purchase or pay for their health care. Good health care is facilitated by an insurance mechanism that helps the consumer make an informed choice as to the best coverage available to meet his or her health care needs and those of his or her family.

(b) At present, thousands of varieties of insurance policies, offering various kinds of insurance protection against the financial cost of sickness, accidents and disability, are sold by insurance companies in New York State. The only policies allowed by this regulation represent real efforts to improve coverage available to the general public, or represent policies that are “tailor-made” to fit the needs of particular policyholders.

(c) The insurance industry should be encouraged to provide new forms of coverage and new ways of reducing health care costs. But innovations should provide health care benefits of real economic value. Health insurance policies designed merely to produce superficial differences or play upon people's fears of particular diseases, and insurance policies which are unduly complex or unduly limited, do not meaningfully expand consumer choice, but instead serve to confuse and make intelligent choice more difficult. Those coverages which are of no substantial economic benefit or are contrary to the health care needs of the public, or contain provisions which serve only to confuse or obfuscate, are prohibited by this Part.

(d) In order to assist health insurance consumers in New York State to better understand and evaluate the benefits provided in the policies offered by licensed insurers in this State, insurers are required to make a full and fair disclosure of policy benefits based upon minimum standards contained in this Part.

(e) To facilitate the administrative supervision of this Part, as well as other related insurance requirements, existing rules in the form of guidelines for the submission and approval of policy forms are incorporated in this Part.

(f) Recognizing that, as part of the contract approval process, the Superintendent of Financial Services has a statutory duty to assure that health insurance benefits are reasonable in relation to the premiums charged, procedures and requirements for the filing of premium rates have been incorporated into this Part. One method of determining whether benefits are reasonable, in relation to the premium charged, is to determine the percentage of the premium collected that is expected to be returned to all policy-holders in the form of benefits. This percentage of return is known as the expected loss ratio. In order to prevent the insurer from retaining an unreasonable percentage of the premiums collected for expenses, commissions and profit, minimum expected loss ratio standards have been established.

(g) Knowing that the policy premium to be charged by an insurer is an overriding concern of the health insurance consumer, and that the consumer should be made aware of what percentage of the premium the insurer intends to return in the form of benefits to all of the policyholders buying that contract, disclosure of the expected benefit ratio is required in the disclosure statement.

(h) When the premium rates are filed and eventually approved as part of the department's approval of the contract, the representation by the insurer as to the expected future loss ratio of that contract is an important factor in obtaining department approval and is the basis for the department's conclusion that benefits are reasonable in relation to the premium charged. Because actuarial science is not exact, and unforeseen factors can cause change in the insurer's assumptions, the department permits increases in the premium rates originally filed, when the insurer reserves the right to change premiums.

(i) The department has found, however, that many companies that filed anticipated loss ratios in the past, and received contract and rate approval on the basis of those anticipated loss ratios, never experienced loss ratios even close to the department's minimums and took no action to correct the situation by reducing premiums, increasing benefits, refunding premiums or paying dividends. In order to be certain that insurers do take appropriate action to fairly treat purchasers of health insurance contracts where reasonable expected loss ratios are not met, a procedure for monitoring of loss ratios has been established, as well as requirements for insurer action by filing a corrective plan with the department.

(j) The superintendent, having the general authority to prescribe regulations not inconsistent with the provisions of the Insurance Law and the specific authority to issue regulations establishing minimum standards for the form, content and sale of health insurance policies and having received a certification from the Commissioner of Health in accordance with section 3217 of the Insurance Law recommending elimination of certain provisions relating to the sale of such policies which are contrary to the health care needs of the public, has established the rules set forth in section 52.27 of this Part, applicable to policies or contracts providing hospital and/or medical expense or indemnity benefits. The Commissioner of Health has specifically certified that “... the use of tests for the detection of the human immunodeficiency virus, its antibody or antigen by insurers selling health insurance policies or contracts, is contrary to the health care needs of the public...”. In promulgating these rules, the superintendent has taken into account that the human immunodeficiency virus (HIV) test is not a diagnostic test for AIDS; that the conclusions to be drawn from the test are not dispositive of a diagnosis of AIDS; that health insurance coverage is essential to one's health and welfare; that denial of health insurance is a most serious consequence of a testing procedure which indicates only exposure to a virus; and that the certification of the Commissioner of Health identifying the unique nature of the public health problems created by AIDS is persuasive and bears directly on the health care needs of the public. In view of the evolving data concerning testing for AIDS, the superintendent will periodically request from the Commissioner of Health a review of his May 1, 1987 certification.

(k) The Medicare Catastrophic Coverage Act of 1988 made significant changes in the benefits provided under Medicare beginning January 1, 1989. The benefit changes were phased in over a time period running through 1993. The superintendent promulgated minimum standards for Medicare supplement insurance that became effective in 1989. Minimum standards for 1990 were promulgated by the department in 1989.

(l) The Medicare Catastrophic Coverage Act of 1988 made significant changes in the benefits provided under Medicare beginning January 1, 1989. The benefit changes were phased in over a time period running through 1993. The superintendent promulgated minimum standards for Medicare supplement insurance for 1989 and the Ninth Amendment to Insurance Regulation No. 62 completed changes in the minimum standards for Medicare supplement insurance necessary for compliance with the Medicare Catastrophic Coverage Act of 1988 and addressed other areas of concern with respect to this type of insurance.

(m) As a result of the changes in the benefits provided under Medicare that were made pursuant to the Medicare Catastrophic Coverage Act of 1988, the superintendent promulgated new minimum standards for Medicare supplement insurance in the Eighth and Ninth Amendments to Insurance Regulation No. 62. In November, 1989, it became clear that Congress was considering action to repeal or modify the Medicare Catastrophic Coverage Act of 1988. Anticipating Congressional action, the superintendent promulgated the Twelfth Amendment to Insurance Regulation No. 62, which repealed the requirement that insurers notify existing Medicare supplement policy or certificate holders of changes in Medicare benefits resulting from the Medicare Catastrophic Coverage Act of 1988 and corresponding changes in Medicare supplement insurance benefits by December 1, 1989. The mailing of such notices would have been confusing and potentially misleading. At the close of the first session of the 101st Congress, Congress repealed provisions regarding Medicare benefits from the Medicare Catastrophic Coverage Act of 1988. The superintendent promulgated the Thirteenth Amendment to Insurance Regulation No. 62 to establish minimum standards for Medicare supplement insurance; to assure the orderly implementation and adjustment of Medicare supplement insurance benefits and premiums due to changes in the Federal Medicare program; to provide for the reasonable standardization of the coverage, terms and benefits of Medicare supplement insurance policies; to facilitate public understanding of such policies; to eliminate policy provisions that may duplicate Medicare benefits; to provide notice to former insureds of an offer to reinstitute coverage; and to provide full disclosure of policy benefits and benefit changes.

(n) Inasmuch as a policy of group accident, group health or group accident and health insurance may provide for the readjustment of the rate of premium based upon the experience thereunder, procedures and requirements for filing have been incorporated in this Part to assure that any such readjustment will not be unreasonable, inequitable or unfair, taking size, credibility and other relevant factors into consideration. Such procedures and requirements will promote an efficient and fair marketplace by curbing abuses associated with deceptively low new business rates and excessive or inequitable renewal rates. Such practices which violate subsections (g), (h) and (j) of section 4235 may jeopardize solvency, reduce availability and, in general, destabilize the market. Furthermore, basing renewal rates on experience which is not statistically reliable may result in inequitable treatment and make insurance protection unaffordable at a time when it is most needed.

(o) As a result of the changes in the benefits provided under the Federal Medicare program that were made pursuant to the Medicare Catastrophic Coverage Act of 1988 and the Medicare Catastrophic Coverage Repeal Act of 1989, the superintendent promulgated minimum standards for Medicare supplement insurance in the Eighth, Ninth, and Thirteenth Amendments to Insurance Regulation No. 62. In accordance with the Omnibus Budget Reconciliation Act of 1990, the superintendent promulgated the Seventeenth Amendment to Insurance Regulation No. 62 to establish revised minimum standards for Medicare supplement insurance policies or certificates delivered or issued for delivery on or after May 1, 1992. Such revised minimum standards were intended to provide for the reasonable standardization of coverage and simplification of terms and benefits of Medicare supplement insurance policies; to facilitate public understanding and comparison of such policies; to eliminate provisions contained in such policies that may be misleading or confusing in connection with the purchase of such policies or with the settlement of claims; and to provide for full disclosure in the sale of accident and health insurance coverages to persons eligible for Medicare.

(p)

(1) Subject to certain limited exceptions, Insurance Law section 3217 and regulations promulgated thereunder (section 52.16[c] of this Part) have long prohibited health insurance policies from limiting or excluding coverage based on type of illness, accident, treatment or medical condition. None of the exceptions apply to medically necessary abortions. As a result, insurance policies that provide hospital, surgical, or medical expense coverage are required to include coverage for abortions that are medically necessary.

(2) Section 52.16(o) of this Part makes explicit that group and blanket insurance policies that provide hospital, surgical, or medical expense coverage delivered or issued for delivery in this State shall not exclude coverage for medically necessary abortions. Section 52.16(o) of this Part also provides for an optional, limited exemption for religious employers as provided in that section while ensuring that coverage is maintained for any insured seeking a medically necessary abortion.

(q)

(1) The Federal Patient Protection and Affordable Care Act (ACA) requires all individual and small group accident and health insurance policies delivered or issued for delivery in this State that provide hospital, surgical, or medical expense coverage and are not grandfathered health plans, and all student accident and health insurance policies delivered or issued for delivery in this State to include coverage for 10 categories of essential health benefits. The essential health benefits provide a set of minimum standards that ensure that all individual and small group accident and health insurance policies that provide hospital, surgical, or medical expense coverage and are not grandfathered health plans, and all student accident and health insurance policies provide their insureds with comprehensive coverage for medically necessary care. Independent of the ACA, the Insurance Law and this Title include broad protections to ensure that all accident and health insurance coverage sold in this State is comprehensive and that insurers shall not discriminate against residents of this State based on race, color, creed, national origin, sex, age, marital status, disability, or preexisting condition.

(2) It is the policy of this State that all individual and small group accident and health insurance policies that provide hospital, surgical, or medical expense coverage and are not grandfathered health plans, and all student accident and health insurance policies provide insureds with essential health benefits and that insurers shall not discriminate against residents of this State based on race, color, creed, national origin, sex, age, marital status, disability, or preexisting condition, whether in issuing policies or setting premiums. Accordingly, irrespective of any changes to the essential health benefit rules in the ACA, as set forth in section 52.71 of this Part, this State will continue to require that individual and small group accident and health insurance policies that provide hospital, surgical, or medical expense coverage and are not grandfathered health plans, and student accident and health insurance policies cover the same essential health benefits and be subject to the same benchmark plan and model contract rules as currently apply. Similarly, irrespective of any changes to the anti-discrimination rules in the ACA, as set forth in section 52.72 of this Part, this State will continue to ensure that all New York insureds covered by small or large group or individual accident and health insurance policies that provide hospital, surgical, or medical expense coverage and student accident and health insurance policies are not subject to discrimination based on race, color, creed, national origin, sex, age, marital status, disability, or preexisting condition.

(r) It is the policy of this State that individuals have access to comprehensive preventive care services. A critical component of such comprehensive preventive care services is maternal depression screening and prompt referrals for treatment. Sections 52.17(a)(38) and 52.18(a)(13) of this Part make explicit that health insurance policies, including child health insurance plan policies, that cover maternal depression screening and prompt referrals for treatment must provide coverage under the mother’s policy and under the policy in which the infant is covered as such services are an important preventive service for both the mother and the infant.

(s) It is the policy of the State of New York to protect women’s access to comprehensive and affordable contraception. One of the greatest impediments to gender equality is the inability to make justified reproductive health decisions or decide when and whether to become a parent. Contraception has been a critical tool for women to gain economic and social independence. The use, accessibility, and availability of contraception also reduces the rate of unintended pregnancy and abortion. Irrespective of whether the Federal government rolls back access to reproductive health care, the State of New York will protect women’s unassailable right to their reproductive freedom. Chapter 25 of the Laws of 2019 and part M of chapter 57 of the Laws of 2019 amended Insurance Law sections 3216(i)(17)(E), 3221(l)(16), and 4303(cc) to require every policy that provides medical, major medical, or similar comprehensive type coverage to provide broad contraceptive coverage. Chapter 25 also requires the superintendent to promulgate regulations establishing a process, including time-frames, for an insured, an insured’s designee, or an insured’s health care provider to request coverage of a non-covered contraceptive drug, device, or product. Section 52.74 of this Part establishes such a process.

(t)

(1) On April 7, 2020, Governor Andrew M. Cuomo issued Executive Order 202.14, which temporarily modified Insurance Law sections 3216(d)(1)(C) and 4306(g), subject to consideration by the superintendent of the liquidity and solvency of the applicable insurer or HMO, to extend the period for the payment of premiums to the later of the expiration of the applicable contractual grace period and 11:59 p.m. on June 1, 2020 for any comprehensive health insurance policyholder or contract holder under an individual policy who is facing a financial hardship as a result of the COVID-19 pandemic; require that such insurer or HMO be responsible for the payment of claims during such period; and bar such insurer or HMO from retroactively terminating the insurance policy for non-payment of premium during such period.

(2) The Executive Order also granted the superintendent the authority to promulgate an emergency regulation, subject to consideration by the superintendent of the liquidity and solvency of the applicable insurer, HMO, or student health plan, to extend the period for the payment of premiums to the later of the expiration of the applicable contractual grace period and 11:59 p.m. on June 1, 2020 for any small group or student blanket comprehensive health insurance policy, or any child health insurance plan policy where the policyholder or contract holder pays the entire premium, for any policyholder or contract holder who is facing financial hardship as a result of the COVID-19 pandemic; require that such insurer, HMO, or student health plan be responsible for the payment of claims during such period; and bar such insurer, HMO, or student health plan from retroactively terminating the insurance policy for non-payment of premium during such period. Section 52.63 of this Part implements that directive.

(3) This subdivision and section 52.63 of this Part are promulgated pursuant to Executive Order 202.14 and for the duration specified therein, which may be extended.