Preservation of public health and general welfare.
Specific reasons underlying the finding of necessity:
Chapter 748 of the Laws of 2006, commonly referred to as “Timothy's Law”, became effective on January 1, 2007. This law amends Sections 3221 and 4303 of the Insurance Law to require health insurance coverage for inpatient and outpatient mental health services. Insurers, Article 43 corporations, and HMOs are required to amend policies and contracts and/or modify premium rates to comply with the requirements of Timothy's Law. Because the bill became effective date two weeks after it was signed, affected insurers, Article 43 corporations and HMOs were not able to obtain prior approval of policy form and rate submissions that pertain to the mental health benefits. Nonetheless, policyholders, certificateholders and members must be made aware of the impact of Timothy's Law on their benefits as soon as possible.
To inform policyholders, certificateholders and members as soon as possible of the details of these new benefits, this amendment requires affected insurers, Article 43 corporations and HMOs to provide written notification explaining the key features of the mental health benefits required under Timothy's Law to affected policyholders, certificateholders, and members. The notice must state that a formal contract and/or certificate amendment will be sent that will explain the new benefits in greater detail. The notice must contain a toll-free customer telephone number that certificateholders and members may use to contact the company with questions concerning these benefits. Insurers were required to provide the notice by February 15, 2007.
This amendment is necessary to require insurers, Article 43 corporations, and HMOs to provide notice to policyholders, certificateholders and members of the coverage. It is imperative that consumers be aware of the availability of this coverage. Inasmuch as the coverage is already mandated for the preservation of the public health and general welfare, the amendment must be continued on an emergency basis until such time as it can be adopted in final form.
Subject:
Minimum standards for the form, content and sale of health insurance, including standards for full and fair disclosure.
Purpose:
To require insurers, article 43 corporations and HMO's to send notices to their policyholders, certificateholders, and members describing chapter 748 of the Laws of 2006.
Text of emergency rule:
Subdivision (d) of section 52.70 is amended by adding a new paragraph (9) to read as follows:
(9) Every insurer issuing school blanket insurance policies pursuant to Insurance Law section 3221 shall send written notice of the enactment of Chapter 748 of the Laws of 2006 (commonly referred to as “Timothy's Law”) to all affected policyholders, certificateholders and members. If permitted by the school blanket policy, insurers may provide notice to the group policyholder for distribution to individual certificateholders but shall be responsible for providing the notice. The notice shall be provided no later than February 15, 2007. The notice shall:
(i) describe the key features of the benefits required under Chapter 748 of the Laws of 2006;
(ii) state that a formal contract or certificate amendment shall be forthcoming that will explain the new benefits in greater detail;
(iii) provide a toll-free customer service telephone number that insureds may call to contact the insurer with questions concerning the new law; and
(iv) advise the policyholders that their premiums may be adjusted.
Subdivision (e) of Section 52.70 is amended by adding a new paragraph (5) to read as follows:
(5) Every insurer, Article 43 corporation and health maintenance organization (“HMO”) shall send written notice of the enactment of Chapter 748 of the Laws of 2006 to all affected group policyholders, certificateholders, and members. If permitted by the group contract, an insurer, Article 43 corporation or HMO may provide notice to the group policyholder for distribution to individual certificateholders and members, but such insurer, Article 43 corporation or HMO ultimately shall be responsible for providing the notice. The notice shall be provided no later than February 15, 2007. The notice shall:
(i) describe the key features of the benefits required pursuant to Chapter 748 of the Laws of 2006;
(ii) state that a formal contract or certificate amendment will be forthcoming that will explain the new benefits in greater detail;
(iii) provide a toll-free customer service telephone number that insureds may call to contact the insurer, Article 43 corporation, or HMO with questions concerning the new law; and
(iv) advise the policyholders that their premiums may be adjusted.
This notice is intended
to serve only as a notice of emergency adoption. This agency does not intend to adopt the provisions of this emergency rule as a permanent rule. The rule will expire November 4, 2007.
Text of emergency rule and any required statements and analyses may be obtained from:
Thomas Fusco, Insurance Department, 65 Court St., Rm. 7, Buffalo, NY 14202, (716) 847-7618, email: tfusco@ins.state.ny.us
Regulatory Impact Statement
1. Statutory authority: The Superintendent's authority for the 38th amendment to 11 NYCRR 52 derives from Sections 201, 301, 1109, 3103, 3201, 3217, 3221, 4235, 4303, 4305 and 4308 of the Insurance Law.
Sections 201 and 301 of the Insurance Law authorize the Superintendent to prescribe regulations interpreting the provisions of the Insurance Law, and to effectuate any power given to him under the provisions of the Insurance Law to prescribe forms or otherwise make regulations.
Section 1109 authorizes the Superintendent to promulgate regulations to effectuate the purposes and provisions of the Insurance Law and Article 44 of the Public Health Law with respect to contracts between a health maintenance organization and its subscribers.
Section 3103 provides that any policy of insurance delivered or issued for delivery in this state in violation of any of the provisions of the Insurance Law shall be valid and binding upon the insurer issuing the same, but in all respects in which its provisions are in violation of the requirements or prohibitions of the Insurance Law it shall be enforceable as if it conformed with such requirements or prohibitions.
Section 3201 authorizes the Superintendent to approve accident and health insurance policies for delivery or issuance for delivery in this state.
Section 3217 authorizes the Superintendent to issue regulations to establish minimum standards for the form, content and sale of health insurance.
Section 3221 sets forth standard health insurance policy provisions.
Section 4235 establishes requirements for group accident and health insurance.
Article 43 of the Insurance Law sets forth requirements for non-profit medical and dental indemnity corporations and non-profit health or hospital corporations, including requirements pertaining to minimum benefits of individual and small group contracts. Section 4303 and 4305 set forth required benefits and standard provisions for group contracts. Section 4308 authorizes the Superintendent to approve contracts, certificates, applications, riders and endorsements issued by Article 43 corporations and HMOs.
2. Legislative objectives: The statutory sections cited above establish a framework for the form, content and sale of health insurance. The proposed amendment to Regulation 62 is consistent with legislative objectives in that it would ensure that the policyholders, certificateholders, and members receive notice of the mental health benefits to which they are now entitled by operation of law as soon as possible prior to the formal revision of the insurance policy forms.
3. Needs and benefits: This emergency amendment requires insurers, Article 43 corporations, and HMOs to provide written notice to insureds by February 15, 2007 of the details of Chapter 748 of the Laws of 2006 (commonly referred to as “Timothy's Law”). The notice shall also provide a toll-free customer service telephone number that insureds may use to contact the company with questions concerning mental health coverage.
Chapter 748 of the Laws of 2006 became effective on January 1, 2007, less than two weeks after it was signed into law. The law requires insurance companies, Article 43 corporations and HMOs to provide coverage for inpatient and outpatient mental health services in certain policies and contracts that are issued, renewed, modified, altered or amended on or after that date. Typically, insurers, Article 43 corporations and HMOs advise policyholders, certificateholders and members of the addition of a new benefit to their coverage by making a formal amendment to their policies, contracts and certificates of coverage in advance of the effective date. But because of the short time frame between the law's enactment and its effective date, insurers, Article 43 corporations and HMOs were not able to develop formal amendments to their policies, contracts and certificates on a timely basis. This emergency regulation requires insurers, Article 43 corporations and HMOs to notify their policyholders, certificateholders and members of the impact of Chapter 748 on their coverage and to provide a toll-free customer service telephone number from which policyholders, certificateholders and members may obtain information about their mental health coverage. The notice required by this regulation serves to education consumers about the possible impact of Timothy's Law on their coverage until such time as their policy, certificate or contract is amended to address the benefit. It is important that the notice be provided to affected parties no later than February 15, 2007 because a significant number of policies and contracts were renewed or were issued on January 1, 2007, and thus are subject to Timothy's Law requirements.
The regulation therefore promotes the general welfare and public health.
4. Costs: This regulation imposes no compliance costs upon state or local governments.
There will be minimal additional costs of compliance to insurers, Article 43 corporations and HMOs that may need to delegate or reassign staffing responsibilities to prepare and distribute the notices. There are no costs to the Insurance Department. The notice requirement is one-time only and not ongoing since insurers must conform their policies to explicitly provide for the coverage mandated by Timothy's Law.
5. Local government mandates: The proposed regulation imposes no new programs, services, duties or responsibilities on local government.
6. Paperwork: The proposed regulation imposes no new reporting requirements. However, there are paperwork associated with preparing and distributing the notice.
7. Duplication: There are no known federal or other state requirements that duplicate, overlap or conflict with this regulation.
8. Alternatives: There are no significant alternatives to be considered at this time due to the short timeframe between the date of enactment and the effective date of the law.
9. Federal standards: There are no minimum standards of the federal government for the same of similar subject areas.
10. Compliance schedule: The provisions of this amendment will take effect immediately. Insurers, Article 43 corporations and HMOs shall have until February 15, 2007 to send written notice to their insureds.
Regulatory Flexibility Analysis
This amendment will not impose any adverse economic impact or reporting, recordkeeping or other compliance requirements on small businesses or local governments.
This amendment will affect insurers, Article 43 corporations and HMOs licensed to do business in this state. Based upon information provided in the annual statements filed with the Insurance Department, insurers, Article 43 corporations and HMOs do not fall within the definition of small business found in Section 102(8) of the State Administrative Procedure Act because none of them are both independently owned and have under one hundred employees. This amendment does not apply to or affect local governments. As a result, there are no reporting, recordkeeping or other affirmative acts that a small business or local government will have to undertake to comply with this proposed regulation. The amendment will not impose any compliance costs on local governments or small businesses.
Rural Area Flexibility Analysis
The amendment will not impose any adverse impact on rural areas or reporting, recordkeeping or other compliance requirements on public or private entities in rural areas. Insurers, Article 43 corporations and HMOs to which the amendment applies do business in every county of the state, including rural areas as defined under State Administrative Procedure Act Section 102(13). Since the amendment applies to the health insurance market throughout New York, not only to rural areas, the same regulation will apply to regulated entities across the state. Therefore, there is no adverse impact on rural areas as a result of this amendment.
Job Impact Statement
The amendment to Regulation 62 will not adversely impact job or employment opportunities in New York. The proposed amendments are likely to have no measurable impact on jobs. The notice is a one-time only requirement. Insurers and health maintenance organizations may need to delegate or reassign staffing responsibilities to prepare and distribute the notices; however, it is anticipated that such responsibilities will be handled by existing personnel.
