S T A T E O F N E W Y O R K
________________________________________________________________________
1570
2009-2010 Regular Sessions
I N S E N A T E
February 3, 2009
___________
Introduced by Sens. GOLDEN, BONACIC, HANNON, O. JOHNSON -- read twice
and ordered printed, and when printed to be committed to the Committee
on Health
AN ACT to amend the public health law, in relation to establishing an
alternative benefits demonstration program and creating health oppor-
tunity accounts
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Article 2 of the public health law is amended by adding a
new title 5-B to read as follows:
TITLE 5-B
ALTERNATIVE BENEFITS DEMONSTRATION PROGRAM
SECTION 266. ALTERNATIVE BENEFITS DEMONSTRATION PROGRAM.
267. DEFINITIONS.
268. IMPLEMENTATION.
269. USE OF HEALTH OPPORTUNITY ACCOUNTS.
269-A. REPORTS.
S 266. ALTERNATIVE BENEFITS DEMONSTRATION PROGRAM. ANY OTHER PROVISION
OF ANY OTHER LAW TO THE CONTRARY NOTWITHSTANDING, THE COMMISSIONER IS
HEREBY AUTHORIZED AND DIRECTED TO APPLY TO THE SECRETARY OF HEALTH AND
HUMAN SERVICES TO ESTABLISH A DEMONSTRATION PROGRAM FOR PROVISION OF
ALTERNATE BENEFITS THROUGH A HEALTH OPPORTUNITY ACCOUNTS PROGRAM PURSU-
ANT TO SECTION 6082 OF THE DEFICIT REDUCTION ACT OF 2005, (P. L.
109-171), AND IF APPROVED, TO ESTABLISH SUCH PROGRAM IN NOT MORE THAN
TEN, NOR LESS THAN FIVE COUNTIES, FOR ELIGIBLE INDIVIDUALS AS DEFINED IN
THIS TITLE, SUBJECT TO THE REQUIREMENTS AND RESTRICTIONS OF THIS TITLE.
THE PROGRAM SHALL TERMINATE IF FEDERAL APPROVALS FOR THE PROGRAM SHALL
CEASE OR BE WITHDRAWN, OR IF THERE IS NO FEDERAL FINANCIAL PARTIC-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06345-01-9
S. 1570 2
IPATION, OR IF THE COMMISSIONER SHALL DETERMINE, PURSUANT TO THE STUDY
AUTHORIZED IN THIS TITLE, THAT THE PROGRAM IS NOT MEETING AND CANNOT
MEET ITS GOALS.
S 267. DEFINITIONS. AS USED IN THIS TITLE:
1. "ELIGIBLE INDIVIDUAL" MEANS AN INDIVIDUAL WHO IS WORKING OR LOOKING
FOR WORK, OR WHO IS ENROLLED IN A JOB TRAINING PROGRAM, AND WHO IS
ELIGIBLE FOR THE MEDICAL ASSISTANCE PROGRAM OR SUCH OTHER PROGRAMS AS
WILL ALLOW SUCH INDIVIDUAL TO QUALIFY FOR THE DEMONSTRATION PROGRAM, AND
WHO VOLUNTARILY ENROLLS IN THE DEMONSTRATION PROGRAM. SUCH ELIGIBLE
INDIVIDUALS MAY INCLUDE INDIVIDUALS WHO ARE ENROLLED IN MEDICAID MANAGED
CARE PLANS, IF THE COMMISSIONER, ON RECOMMENDATION OF THE ADVISORY
COMMITTEE, DETERMINES TO INCLUDE THEM; PROVIDED HOWEVER THAT THE DETER-
MINATION TO INCLUDE SUCH INDIVIDUALS SHALL BE SUBJECT TO FEDERAL
REQUIREMENTS AND LIMITATIONS CONCERNING SUCH INDIVIDUALS. AN ELIGIBLE
INDIVIDUAL SHALL NOT INCLUDE INDIVIDUALS (A) WHO ARE SIXTY-FIVE YEARS OF
AGE OR OLDER; OR (B) WHO ARE DISABLED; OR (C) WHO ARE ELIGIBLE FOR
MEDICAL ASSISTANCE ONLY BECAUSE THEY ARE (OR WERE WITHIN THE PREVIOUS
SIXTY DAYS) PREGNANT; OR (D) WHO HAVE BEEN ELIGIBLE FOR MEDICAL ASSIST-
ANCE FOR A CONTINUOUS PERIOD OF LESS THAN THREE MONTHS; OR (E) ANY
OTHERS PROHIBITED FROM ELIGIBILITY BY FEDERAL REQUIREMENTS, OR WHO ARE
EXCLUDED BY THE COMMISSIONER ON RECOMMENDATION OF THE ADVISORY COMMIT-
TEE.
2. "ENROLLMENT" MEANS THE VOLUNTARY ENROLLMENT BY AN ELIGIBLE INDIVID-
UAL IN THE ALTERNATIVE BENEFITS PLAN AUTHORIZED BY THIS TITLE. ENROLL-
MENT SHALL BE FOR A PERIOD OF TWELVE MONTHS, AND MAY BE EXTENDED FOR
ADDITIONAL PERIODS OF TWELVE MONTHS AT THE OPTION OF THE ELIGIBLE INDI-
VIDUAL. AN ELIGIBLE INDIVIDUAL WHO, FOR ANY REASON, UNENROLLS OR IS
UNENROLLED FROM THE PROGRAM SHALL NOT BE PERMITTED TO REENROLL FOR A
PERIOD OF TWELVE MONTHS FROM THE DATE OF SUCH UNENROLLMENT.
3. "DEDUCTIBLE" MEANS AN AMOUNT WHICH IS ONE HUNDRED TEN PERCENT OF
THE ANNUALIZED AMOUNT OF STATE AND FEDERAL CONTRIBUTIONS MADE BY THE
COMMISSIONER TO A HEALTH OPPORTUNITY ACCOUNT PURSUANT TO THIS SECTION.
UPON RECOMMENDATION OF THE ADVISORY COMMITTEE, THE COMMISSIONER MAY
ESTABLISH A TIERED SCHEDULE OF ANNUAL DEDUCTIBLES, BASED ON FAMILY OR
INDIVIDUAL INCOME, CONSISTENT WITH FEDERAL REQUIREMENTS FOR SUCH TIERED
SCHEDULE.
4. "HEALTH OPPORTUNITY ACCOUNT" MEANS AN ACCOUNT OPENED BY OR ON
BEHALF OF AN ELIGIBLE INDIVIDUAL PURSUANT TO THE DEMONSTRATION PROGRAM
AUTHORIZED BY THIS TITLE. SUCH ELIGIBLE INDIVIDUAL SHALL BE DEEMED THE
OWNER OF THE ACCOUNT, SUBJECT TO THE RESTRICTIONS AND REQUIREMENTS OF
THIS TITLE AND OF ANY FEDERAL REQUIREMENTS AND LIMITATIONS CONCERNING
SUCH ACCOUNTS. CONTRIBUTIONS TO A HEALTH OPPORTUNITY ACCOUNT MAY BE MADE
FROM THE STATE AND FEDERAL GOVERNMENTS, AND OTHER PERSONS AND ENTITIES,
INCLUDING CHARITABLE ORGANIZATIONS, AS MAY BE PERMITTED BY THE SECRETARY
UNDER THE TERMS OF THE DEMONSTRATION PROGRAM, PROVIDED HOWEVER THAT THE
COMBINED STATE AND FEDERAL SHARE OF CONTRIBUTIONS TO A HEALTH OPPORTU-
NITY ACCOUNT ON BEHALF OF AN INDIVIDUAL SHALL NOT EXCEED TWENTY-FIVE
HUNDRED DOLLARS ANNUALLY FOR EACH INDIVIDUAL OR FAMILY MEMBER WHO IS AN
ADULT AND ONE THOUSAND DOLLARS FOR EACH INDIVIDUAL OR FAMILY MEMBER WHO
IS A CHILD, AND PROVIDED FURTHER THAT THE LIMITATIONS ON SUCH CONTRIB-
UTIONS SHALL BE ANNUALLY ADJUSTED BY THE ANNUAL PERCENTAGE INCREASE IN
THE MEDICAL CARE COMPONENT OF THE CONSUMER PRICE INDEX FOR ALL URBAN
CONSUMERS AS PERMITTED BY THE SECRETARY. THE COMMISSIONER SHALL SEEK TO
MAXIMIZE FEDERAL CONTRIBUTIONS TO HEALTH OPPORTUNITY ACCOUNTS ESTAB-
LISHED PURSUANT TO THIS SECTION.
S. 1570 3
5. "SECRETARY" MEANS THE SECRETARY OF THE FEDERAL DEPARTMENT OF HEALTH
AND HUMAN SERVICES.
6. "ADVISORY COMMITTEE" MEANS AN ADVISORY COMMITTEE APPOINTED BY THE
COMMISSIONER TO AID IN THE DESIGN AND IMPLEMENTATION OF THE DEMON-
STRATION PROGRAM AUTHORIZED BY THIS TITLE. THE COMMITTEE SHALL CONSIST
OF TEN PERSONS, OF WHOM FOUR SHALL BE PERSONS WITH AT LEAST FIVE YEARS
EXPERIENCE AT EXECUTIVE LEVELS IN THE PROVISION OF HEALTH CARE IN THIS
STATE, THREE SHALL BE EXPERTS IN THE ELECTRONIC TRANSMISSION OF FUNDS
AND PAYMENT FOR SERVICES, OR PERSONS WITH EXPERTISE IN THE USE OF
SAVINGS ACCOUNTS FOR THE PAYMENT OF HEALTH CARE SERVICES, AND THREE
SHALL BE CONSUMERS OR ADVOCATES FOR CONSUMERS LIKELY TO BE OR BECOME
ELIGIBLE INDIVIDUALS PURSUANT TO THE TERMS OF THIS DEMONSTRATION.
7. "MEDICAID ASSISTANCE PROGRAM" MEANS MEDICAL ASSISTANCE FOR NEEDY
PERSONS AS AUTHORIZED BY TITLE ELEVEN OF ARTICLE FIVE OF THE SOCIAL
SERVICES LAW AND OTHER APPLICABLE STATE LAW.
S 268. IMPLEMENTATION. 1. THE COMMISSIONER SHALL TAKE SUCH STEPS AS
SHALL BE NECESSARY TO DEVELOP THE APPLICATION FOR THE ALTERNATIVE BENE-
FITS PROGRAM AUTHORIZED BY THIS SECTION AND SECTION 6082 OF THE DEFICIT
REDUCTION ACT OF 2005 (P.L. 109-171), AND TO ESTABLISH AGREEMENTS WITH
AT LEAST THREE BUT NOT MORE THAN TEN COUNTIES FOR THE IMPLEMENTATION OF
THE PROGRAM IF APPROVED BY THE SECRETARY. IF APPROVED BY THE SECRETARY,
THE COMMISSIONER IS AUTHORIZED TO AND SHALL IMPLEMENT THE PROGRAM IN
COUNTIES SELECTED PURSUANT TO THIS SUBDIVISION. THE COMMISSIONER SHALL
CONSULT WITH THE ADVISORY COMMITTEE IN THE DESIGN AND DEVELOPMENT OF THE
APPLICATION.
2. THE COMMISSIONER MAY COORDINATE ADMINISTRATION OF HEALTH OPPORTU-
NITY ACCOUNTS THROUGH THE USE OF A THIRD ADMINISTRATOR, TO THE EXTENT
PERMITTED BY FEDERAL REQUIREMENTS FOR THE PROGRAM. THE COMMISSIONER
SHALL NOT USE A THIRD PARTY ADMINISTRATOR IF EXPENDITURES FOR THE USE OF
SUCH ADMINISTRATOR ARE NOT REIMBURSABLE IN THE SAME MANNER AS OTHER
ADMINISTRATIVE EXPENDITURES PURSUANT TO SECTION 1903(A)(7) OF THE SOCIAL
SECURITY ACT. THE COMMISSIONER MAY USE A REQUEST FOR PROPOSALS OR
REQUEST FOR QUALIFICATIONS PROCESS IN SELECTING SUCH THIRD PARTY ADMIN-
ISTRATOR, AND SHALL CONSULT WITH THE ADVISORY COMMITTEE IN THE DESIGN OF
SUCH RFP AND RFQ.
3. THE COMMISSIONER SHALL REQUIRE THAT PROVIDERS OF SERVICE PROVIDE
SUCH SERVICES TO THE OWNER OF A HEALTH OPPORTUNITY ACCOUNT IN THE SAME
MANNER AND FOR THE SAME RATES AND PAYMENTS AS IF THE INDIVIDUAL WAS
ENROLLED IN THE MEDICAL ASSISTANCE PROGRAM AND NOT THIS DEMONSTRATION
PROGRAM, AND AS IF THE DEDUCTIBLE WAS NOT APPLICABLE.
4. THE COMMISSIONER, AFTER CONSULTING WITH THE SUPERINTENDENT OF
BANKS, THE ADVISORY COMMITTEE, AND OTHERS THE COMMISSIONER DEEMS APPRO-
PRIATE, SHALL PROVIDE FOR A METHOD WHEREBY WITHDRAWALS MAY BE MADE FROM
A HEALTH OPPORTUNITY ACCOUNT FOR PAYMENT OF ELIGIBLE MEDICAL CARE
EXPENSES USING AN ELECTRONIC SYSTEM. IN NO CASE SHALL WITHDRAWALS FROM
THE ACCOUNT BE PERMITTED IN CASH.
S 269. USE OF HEALTH OPPORTUNITY ACCOUNTS. THE COMMISSIONER SHALL
PRESCRIBE BY RULE AND REGULATION THE PERMITTED USES OF FUNDS IN HEALTH
OPPORTUNITY ACCOUNTS. SUCH RULE AND REGULATION SHALL REQUIRE:
1. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, FUNDS IN A HEALTH
OPPORTUNITY ACCOUNT SHALL ONLY BE USED FOR PAYMENT OF MEDICAL CARE, AS
SUCH TERM IS DEFINED IN SECTION 213(D) OF THE INTERNAL REVENUE CODE, OR
FOR THE PURCHASE OF HEALTH INSURANCE COVERAGE; IN THE CASE OF AN ACCOUNT
OWNER WHO HAS BEEN ENROLLED IN THE PROGRAM FOR AT LEAST ONE YEAR, SUCH
FUNDS MAY ALSO BE USED FOR EDUCATIONAL EXPENDITURES FOR JOB TRAINING AND
TUITION EXPENSES OR OTHER EXPENDITURES APPROVED BY THE COMMISSIONER ON
S. 1570 4
RECOMMENDATION OF THE ADVISORY COMMITTEE, PROVIDED (A) THAT SUCH EXPEND-
ITURES SHALL BE MADE ONLY TO INSTITUTIONS AND PROGRAMS APPROVED BY THE
COMMISSIONER, (B) THAT THE PURPOSE OF SUCH EXPENDITURES IS TO ENABLE THE
INDIVIDUAL TO ACQUIRE SKILLS AND TRAINING, AND (C) THAT ANY SUCH EXPEND-
ITURES FOR ITEMS OTHER THAN MEDICAL CARE ARE APPROVED BY THE SECRETARY.
2. IF THE OWNER OF A HEALTH OPPORTUNITY ACCOUNT BECOMES INELIGIBLE TO
CONTINUE AS AN ELIGIBLE INDIVIDUAL UNDER THIS SECTION BECAUSE OF AN
INCREASE IN INCOME OR ASSETS, (A) NO ADDITIONAL CONTRIBUTION SHALL BE
MADE TO THE ACCOUNT BY THE COMMISSIONER, (B) THE BALANCE IN THE ACCOUNT
SHALL BE REDUCED BY TWENTY-FIVE PERCENT OF THE AMOUNT OF STATE AND
FEDERAL FUNDS DEPOSITED INTO THE ACCOUNT BY THE COMMISSIONER, EXCEPT AS
OTHERWISE PROVIDED HEREIN; PROVIDED HOWEVER THAT (C) THE ACCOUNT SHALL
REMAIN AVAILABLE TO THE ACCOUNT HOLDER FOR THREE YEARS AFTER THE DATE ON
WHICH SUCH OWNER BECOMES INELIGIBLE FOR WITHDRAWALS UNDER THE SAME TERMS
AND CONDITIONS AS IF SUCH OWNER REMAINED ELIGIBLE, AND SUCH WITHDRAWALS
SHALL BE TREATED AS MEDICAL ASSISTANCE IN ACCORDANCE WITH THIS DEMON-
STRATION PROGRAM. FOR PURPOSES OF COMPUTING THE REDUCTION OF TWENTY-FIVE
PER CENT REQUIRED BY PARAGRAPH (B) OF THIS SUBDIVISION, ANY WITHDRAWALS
FROM THE ACCOUNT FOR PAYMENT OF ELIGIBLE EXPENSES SHALL FIRST BE CREDIT-
ED TO STATE AND FEDERAL CONTRIBUTIONS, AND NOT TO CONTRIBUTIONS BY OTHER
INDIVIDUALS AND ENTITIES.
3. THE OWNER OF A HEALTH OPPORTUNITY ACCOUNT WHO BECOMES INELIGIBLE TO
CONTINUE AS AN ELIGIBLE INDIVIDUAL UNDER THIS SECTION SHALL NOT BE
REQUIRED TO PURCHASE INSURANCE AS A CONDITION OF CONTINUING TO USE OR
MAINTAIN THE ACCOUNT.
4. AMOUNTS CONTAINED IN OR CONTRIBUTED TO A HEALTH OPPORTUNITY ACCOUNT
SHALL NOT BE COUNTED AS INCOME OR ASSETS FOR PURPOSES OF DETERMINING
ELIGIBILITY FOR BENEFITS UNDER MEDICAL ASSISTANCE.
5. THE COMMISSIONER, UPON RECOMMENDATION OF THE ADVISORY COMMITTEE,
SHALL ESTABLISH PROCEDURES TO PENALIZE AN INDIVIDUAL WHO MAKES UNQUALI-
FIED WITHDRAWALS FROM A HEALTH OPPORTUNITY ACCOUNT, INCLUDING DISQUALI-
FYING SUCH PERSON FROM CONTINUING ENROLLMENT IN THE PROGRAM AND CLOSING
THE ACCOUNT, RECOUPING COSTS FROM SUCH NONQUALIFIED WITHDRAWALS, AND
OTHER APPROPRIATE ACTIONS.
6. ANY OTHER PROVISION OF ANY OTHER LAW TO THE CONTRARY NOTWITHSTAND-
ING, THE COMMISSIONER MAY, UPON RECOMMENDATION OF THE ADVISORY COMMITTEE
AND IF THE SECRETARY SHALL APPROVE, PROVIDE APPROPRIATE INCENTIVES FOR
THE USE OF PREVENTATIVE CARE BY THE OWNER OF THE ACCOUNT, INCLUDING
WAIVING THE DEDUCTIBLE FOR USE OF PREVENTATIVE CARE AND REDUCING THE
REDUCTION REQUIRED PURSUANT TO PARAGRAPH (B) OF SUBDIVISION TWO OF THIS
SECTION FOR AN OWNER WHO BECOMES INELIGIBLE TO CONTINUE AS AN ELIGIBLE
INDIVIDUAL, OR WAIVING OF CO-PAYS FOR SUCH CARE. FOR PURPOSES OF THIS
SUBDIVISION, PREVENTATIVE CARE IS ANY CARE THAT QUALIFIES AS PREVENTA-
TIVE CARE FOR PURPOSES OF SECTION 223(C)(2)(C) OF THE INTERNAL REVENUE
CODE, INCLUDING BUT NOT LIMITED TO, PERIODIC HEALTH EVALUATIONS, INCLUD-
ING TESTS AND DIAGNOSTIC PROCEDURES ORDERED IN CONNECTION WITH ROUTINE
EXAMINATIONS, SUCH AS ANNUAL PHYSICALS; ROUTINE PRENATAL AND WELL-CHILD
CARE; CHILD AND ADULT IMMUNIZATIONS; TOBACCO CESSATION PROGRAMS; OBESITY
WEIGHT-LOSS PROGRAMS; SCREENING SERVICES; AND OTHER CARE WHICH QUALIFIES
UNDER SUCH SECTION.
7. THE COMMISSIONER SHALL ESTABLISH ACCESS TO NEGOTIATED PROVIDER
PAYMENT RATES. IN THE CASE OF AN ELIGIBLE INDIVIDUAL PARTICIPATING IN
THIS DEMONSTRATION PROGRAM WHO (A) IS NOT ENROLLED WITH A MEDICAID
MANAGED CARE ORGANIZATION, THE COMMISSIONER SHALL PROVIDE THAT THE INDI-
VIDUAL MAY OBTAIN SERVICES FROM (I) ANY PARTICIPATING PROVIDER UNDER
THIS TITLE AT THE SAME PAYMENT RATES THAT WOULD BE APPLICABLE TO SUCH
S. 1570 5
SERVICES IF THE DEDUCTIBLE WAS NOT APPLICABLE; OR (II) ANY OTHER PROVID-
ER AT PAYMENT RATES THAT DO NOT EXCEED ONE HUNDRED TWENTY-FIVE PERCENT
OF THE PAYMENT RATE THAT WOULD BE APPLICABLE TO SUCH SERVICES FURNISHED
BY A PARTICIPATING PROVIDER UNDER THIS TITLE IF THE DEDUCTIBLE WAS NOT
APPLICABLE; OR (B) WHO IS ENROLLED WITH A MEDICAID MANAGED CARE ORGAN-
IZATION, THE COMMISSIONER SHALL ENTER INTO AN ARRANGEMENT WITH THE
ORGANIZATION UNDER WHICH THE INDIVIDUAL MAY OBTAIN SERVICES FROM ANY
OTHER PROVIDER AT PAYMENT RATES THAT DO NOT EXCEED ONE HUNDRED
TWENTY-FIVE PERCENT OF THE PAYMENT RATE THAT WOULD BE APPLICABLE TO SUCH
SERVICES FURNISHED BY A PARTICIPATING PROVIDER UNDER THIS TITLE IF THE
DEDUCTIBLE WAS NOT APPLICABLE. SUCH PAYMENT RATES SHALL BE COMPUTED
WITHOUT REGARD TO ANY COST SHARING THAT WOULD BE OTHERWISE APPLICABLE.
8. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS PREVENTING AN EMPLOY-
ER FROM PROVIDING HEALTH BENEFITS COVERAGE TO AN ELIGIBLE INDIVIDUAL
UNDER THE DEMONSTRATION PROJECT AUTHORIZED BY THIS SECTION, AND THE
COMMISSIONER SHALL MAKE APPROPRIATE EFFORTS TO PARTNER WITH EMPLOYERS
FOR THE PROVISION OF HEALTH CARE TO SUCH ELIGIBLE INDIVIDUALS.
S 269-A. REPORTS. THE COMMISSIONER SHALL REPORT TO THE GOVERNOR AND
THE LEGISLATURE FROM TIME TO TIME ON THE IMPLEMENTATION OF THE DEMON-
STRATION PROGRAM, AND SHALL PROVIDE AN INTERIM REPORT NOT LATER THAN THE
THIRD YEAR OF THE PROGRAM, AND A FINAL REPORT NOT LATER THAN MAY FIRST
OF THE FIFTH YEAR OF THE PROGRAM. THE INTERIM AND FINAL REPORTS SHALL
PROVE STATISTICAL NARRATIVES OF THE LEVELS OF ENROLLMENT IN THE PROGRAM,
THE COSTS AND SAVINGS ASSOCIATED WITH THE PROGRAM, AND AN EVALUATION OF
THE SUCCESS OF THE PROGRAM IN ATTAINING ITS GOALS.
S 2. This act shall take effect immediately.