NY State Senate Bill 2009-S2736

Senate Bill S2736

2009-2010 Legislative Session

Requires health insurers and non-profit health plans to provide option for coverage of unmarried children until age 26

download bill text pdf

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to insurance
Feb 27, 2009	referred to insurance

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2009-S2736 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3216, 3221 & 4304, add §§4302-a & 215, Ins L

2009-S2736 (ACTIVE) - Summary

Requires health insurers and nonprofit health plans to provide option for coverage of unmarried children until age 26.

2009-S2736 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S2736

 TITLE OF BILL :

An act to amend the insurance law, in relation to requiring accident
and health insurers and non-profit health plans to provide coverage of
unmarried children until age twenty-six and directing the
superintendent of insurance to order a study thereof; and providing
for the repeal of such provisions upon expiration thereof


 PURPOSE :

This bill requires that health insurers must offer to families covered
by such insurers the ability to include their unmarried dependent
children under the age of 26. While insurers under this bill must
offer this new coverage, this coverage will be offered through a
contract rider so that the only insureds that accept the terms of such
rider will receive its benefits and pay for its cost. In addition, for
employers that purchase such rider, they may share the cost of such
rider with those employees that wish to obtain the benefits of this
new dependent care rider.

 SUMMARY OF PROVISIONS :

Sections 1 and 2: Amends Insurance Law section 3216 to require that

health insurers that offer individual accident and health insurance
policies must offer to their policyholders the ability to include
their children after reaching the age of20 until such child becomes
26. Under this bill, an insurer must allow a family to keep covering
that family's dependent children until the age of 26.  Any family that
continues coverage of an unemancipated child up to the age of 26 would
need to pay an additional charge for such coverage either in the
family rate or by a insurance contract rider. This provision would not
alter the benefits that certain children up to the age of 23 currently
receive if they are in college or those dependent children who are
incapable of self-sustaining employment due to mental illness. Those
employers that provide health insurance for their employees can enter
into separate premium cost sharing arrangements for those employees
that wish to have this new dependent care rider for their
unemancipated children.  Sections 3 and 4: Amends Insurance Law
section 3221 to require that insurers that offer small group health
insurance must offer families the option to continue to provide
coverage to unemancipated children under the age of26. As stated
above, this provision does not mean that all small group policies must
contain this expanded benefit for dependent children up to the age of
26 as is currently the case for college students up to age 23 or for
dependent children who are incapable of self-sustaining employment due
to mental illness. It simply means that insurers must offer the
coverage and policy holders that accept such offer must pay for the
cost of this new policy rider. Further, the insurer could require
increased premiums by altering the family premium rate or by assessing
a separate insurance contract rider premium rate.

Section 5 and 6: Adds a new Insurance Law section 4302-a and amends
section 4304 to mandate that Article 43 health insurers must offer the
same dependent care coverage as provided in Article 32 to include
children under the age of 26 under a family policy or via a policy
rider.

Section 7: Adds Insurance Law section 214 to have the Superintendent
of Insurance conduct a study of the utilization trends and experience
and rate and premium impact to health insurance consumers of the
additional insurance coverage of dependent care provided for under
this bill. This study must be conducted by September 1, 2011 so that
the state Legislature has ample time to review this report and use it
in its deliberations to extend the provisions of this act which sunset
on December 31, 2012.

Section 8: This bill sunsets on December 31, 2012.

 EXISTING LAW :
Under current law, an unemancipated child over the age of 19 must be
dropped from a family's health insurance coverage unless such child is
in college or is incapable of self-sustaining employment.

 JUSTIFICATION :

Under current law, certain unemancipated child are allowed to retain
health insurance coverage under their family's plan.  This includes
college students until reaching the age of 23. It seems unfair that an
unemancipated child living at home who instead of going to college
seeks employment cannot be covered by the same family health insurance
policy.  The institution of community rating in assigning health
insurance premiums encouraged younger and healthier persons to drop
their coverage because they were paying the same rate as older
persons, healthier.

Enacting this bill should encourage younger people to retain health
insurance coverage and get them use to the idea they need such
coverage and derive benefits by retaining this coverage.  Once a child
is dropped from coverage, it is much more difficult to entice such a
person to regain health insurance unless it is offered by an employer.
More and more, employers are no longer offering health insurance
benefits to its employees, so there is a diminishing ability for
persons between the age of 19 and under 26 to secure health insurance
benefits.

The idea for this bill came from the work of the Task Force on the
Future of Health Insurance created by the Commonwealth Fund. That Task
Force issued a report entitled "Job-Based Health Insurance in the
Balance: Employer Views of Coverage in the Work Place" dated March
2004.

There is a growing trend to requiring insurers to offer extended
coverage for dependent children under an individual's family policy.
Currently, 18 states have enacted similar bills that either require
insurers to provide coverage for dependent children up to pages as old
as 30 years old. This bill is more modest in its scope because each
insured that accepts this added coverage must pay an additional
premium rider cost. The states that have adopted this extended
dependent child coverage are New Jersey, Colorado, Connecticut,
Delaware, Idaho, Indiana, Maine, Maryland, Massachusetts, Montana, New
Hampshire, New Mexico, Rhode Island, South Dakota, Texas, Utah, West
Virginia, and Washington.

 LEGISLATIVE HISTORY :

The previously un-amended Senate Bill 575 which allowed insurers to
offer coverage, but did not mandate them to do so became law under a
Budget Bill, Chapter 58 of the Laws of 2007, Part A, sections 65-d and
65-e.

 FISCAL IMPLICATIONS :

Encouraging more dependent children to retain health insurance
coverage under their family plans may reduce uncompensated care that
is provided for at our State's hospitals.

 LOCAL FISCAL IMPLICATIONS :

None.
 EFFECTIVE DATE :
On the January 1st next succeeding this bills enactment and shall
apply to all policies issued, renewed or amended after such date.
Such law would sunset on December 31, 2013.

2009-S2736 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2736

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 27, 2009
                               ___________

Introduced  by  Sens. LARKIN, BONACIC, HANNON, LEIBELL, MORAHAN, SALAND,
  SEWARD, VOLKER -- read twice and ordered printed, and when printed  to
  be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to requiring accident and
  health  insurers  and  non-profit  health plans to provide coverage of
  unmarried children until age twenty-six and directing the  superinten-
  dent  of  insurance  to  order  a study thereof; and providing for the
  repeal of such provisions upon expiration thereof

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 4 of subsection (a) of section 3216 of the insur-
ance law, as amended by section 65-d of part A of chapter 58 of the laws
of 2007, is amended to read as follows:
  (4) "Dependent children" (A) shall include any children under a speci-
fied age which shall not exceed age nineteen except:
  (i) Any unmarried dependent child, regardless of age, who is incapable
of self-sustaining employment by reason of mental illness, developmental
disability,  or mental retardation as defined in the mental hygiene law,
or physical handicap and who became so incapable prior  to  the  age  at
which dependent coverage would otherwise terminate, shall be included in
coverage subject to any pre-existing conditions limitation applicable to
other dependents.
  (ii)  Any  unmarried  student at an accredited institution of learning
may be considered a dependent child until attaining age twenty-three.
  (B) may include[, at the option of  the  insurer,]  AND  EACH  INSURER
SHALL  OFFER  COVERAGE  FOR any unmarried child OVER THE AGE OF NINETEEN
until attaining age [twenty-five] TWENTY-SIX.
  S 2. Paragraph 3 of subsection (c) of section 3216  of  the  insurance
law is amended to read as follows:
  (3)  It  purports  to insure only one person, except that a policy may
insure, originally or by subsequent amendment, members of a  family,  as

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09815-01-9

S. 2736                             2

defined  herein,  upon  the application of an adult member of the family
who shall be deemed the policyholder, AND, AT THE OPTION OF THE INSURED,
SHALL INCLUDE DEPENDENT CHILDREN AS DEFINED IN SUBPARAGRAPH (B) OF PARA-
GRAPH  FOUR  OF  SUBSECTION  (A)  OF  THIS SECTION. IN ANY CASE IN WHICH
COVERAGE OF SUCH DEPENDENT CHILDREN IS PROVIDED, THE COST OF SUCH COVER-
AGE SHALL BE PAID FOR BY THE POLICYHOLDER.
  S 3. Section 3221 of the insurance law is  amended  by  adding  a  new
subsection (a-1) to read as follows:
  (A-1)  AN  INSURER  SHALL  OFFER COVERAGE TO ANY UNMARRIED CHILD OF AN
INSURED WHEN SUCH CHILD IS OVER THE AGE OF NINETEEN AND HAS NOT ATTAINED
THE AGE OF TWENTY-SIX. PROVIDED, THAT SUCH COVERAGE SHALL NOT  LIMIT  OR
OTHERWISE  QUALIFY  ANY  COVERAGE  PROVIDED  BY THE INSURER TO DEPENDENT
CHILDREN AS DEFINED IN SUBPARAGRAPH (A) OF PARAGRAPH FOUR OF  SUBSECTION
(A)  OF  SECTION  THREE  THOUSAND  TWO  HUNDRED SIXTEEN OF THIS ARTICLE.
PROVIDED, FURTHER, THAT,  SHOULD  COVERAGE  OF  DEPENDENT  CHILDREN,  AS
DEFINED  IN  SUBPARAGRAPH  (B)  OF  PARAGRAPH  FOUR OF SUBSECTION (A) OF
SECTION THREE THOUSAND TWO HUNDRED SIXTEEN OF THIS ARTICLE, BE PROVIDED,
THE COST OF SUCH COVERAGE SHALL BE PAID FOR BY THE EMPLOYER OR PERSON IN
WHOSE NAME SUCH POLICY IS ISSUED; PROVIDED THAT SUCH EMPLOYER OR  PERSON
MAY  REQUIRE  SUCH  MEMBER OF AN INSURED GROUP TO PAY PART OR ALL OF THE
POLICY RIDER COST.
  S 4. Paragraph 7 of subsection (a) of section 3221  of  the  insurance
law is amended to read as follows:
  (7)  The ages, to which the insurance provided therein shall be limit-
ed; and the ages, for which additional restrictions are placed on  bene-
fits,  and  the  additional  restrictions placed on the benefits at such
ages.  PROVIDED THAT, AT THE OPTION OF THE INSURED,  INSURANCE  COVERAGE
SHALL  BE PROVIDED FOR DEPENDENT CHILDREN AS DEFINED IN SUBPARAGRAPH (B)
OF PARAGRAPH FOUR OF  SUBSECTION  (A)  OF  SECTION  THREE  THOUSAND  TWO
HUNDRED  SIXTEEN  OF THIS ARTICLE. IN ANY CASE IN WHICH COVERAGE OF SUCH
DEPENDENT CHILDREN IS PROVIDED, THE COST OF SUCH COVERAGE SHALL BE  PAID
FOR  BY  THE  EMPLOYER  OR  PERSON  IN WHOSE NAME SUCH POLICY IS ISSUED;
PROVIDED THAT SUCH EMPLOYER OR PERSON MAY  REQUIRE  SUCH  MEMBER  OF  AN
INSURED GROUP TO PAY PART OR ALL OF THE POLICY RIDER COST.
  S  5.  The  insurance law is amended by adding a new section 4302-a to
read as follows:
  S 4302-A. COVERAGE OF CHILDREN. A CONTRACT ISSUED BY A MEDICAL  INDEM-
NITY  CORPORATION  OR HEALTH SERVICE CORPORATION SHALL, AT THE OPTION OF
THE HOLDER OF SUCH CONTRACT OR  PERSONS  HOLDING  INDIVIDUAL  CONTRACTS,
PROVIDE COVERAGE TO ANY UNMARRIED CHILD OF A COVERED INDIVIDUAL FROM AGE
NINETEEN  UNTIL  AGE  TWENTY-SIX. PROVIDED, THAT SUCH COVERAGE SHALL NOT
LIMIT OR OTHERWISE QUALIFY ANY COVERAGE PROVIDED BY SUCH CORPORATION  TO
DEPENDENT  CHILDREN  AS DEFINED IN SUBPARAGRAPH (A) OF PARAGRAPH FOUR OF
SUBSECTION (A) OF SECTION THREE THOUSAND TWO  HUNDRED  SIXTEEN  OF  THIS
CHAPTER. IN ANY CASE IN WHICH COVERAGE OF DEPENDENT CHILDREN, AS DEFINED
IN SUBPARAGRAPH (B) OF PARAGRAPH FOUR OF SUBSECTION (A) OF SECTION THREE
THOUSAND  TWO  HUNDRED SIXTEEN OF THIS CHAPTER, IS PROVIDED, THE COST OF
SUCH COVERAGE SHALL BE PAID FOR BY THE  CONTRACT  HOLDER  OR  PERSON  IN
WHOSE  NAME SUCH CONTRACT IS ISSUED; PROVIDED THAT SUCH HOLDER OR PERSON
MAY REQUIRE THE COVERED PERSON TO PAY PART OR ALL OF THE CONTRACT  RIDER
COST.
  S  6.  Paragraph  1 of subsection (d) of section 4304 of the insurance
law, as amended by section 65-e of part A of chapter 58 of the  laws  of
2007, is amended to read as follows:
  (1)  No  contract  issued  pursuant to this section shall entitle more
than one person to benefits except that a contract issued and marked  as

S. 2736                             3

a  "family  contract"  may  provide that benefits will be furnished to a
husband and wife, or husband, wife and their dependent  child  or  chil-
dren,  or any child or children not over nineteen years of age, provided
that  an  unmarried student at an accredited institution of learning may
be considered a dependent until he becomes twenty-three  years  of  age,
provided  that  the  coverage  of any such "family contract" [may] SHALL
include, at the option of the insurer, any unmarried child FROM THE  AGE
OF  NINETEEN  until attaining age [twenty-five] TWENTY-SIX, and provided
also that the coverage of any such "family contract" shall  include  any
other  unmarried child, regardless of age, who is incapable of self-sus-
taining employment by reason of mental illness, developmental  disabili-
ty,  mental  retardation, as defined in the mental hygiene law, or phys-
ical handicap and who became so incapable prior to attainment of the age
at which dependent coverage would  otherwise  terminate,  so  that  such
child  may  be  considered  a dependent. Notwithstanding any rule, regu-
lation or law to the contrary, any "family contract" shall provide  that
coverage of newborn infants, including newly born infants adopted by the
insured  or  subscriber  if  such  insured  or subscriber takes physical
custody of the infant upon such infant's release from the  hospital  and
files a petition pursuant to section one hundred fifteen-c of the domes-
tic relations law within thirty days of birth; and provided further that
no  notice  of  revocation  to  the  adoption has been filed pursuant to
section one hundred fifteen-b of the domestic relations law and  consent
to the adoption has not been revoked, shall be effective from the moment
of  birth for injury or sickness including the necessary care and treat-
ment of medically diagnosed congenital defects and  birth  abnormalities
including premature birth, except that in cases of adoption, coverage of
the initial hospital stay shall not be required where a birth parent has
insurance  coverage  available  for  the  infant's  care. This provision
regarding coverage of newborn infants shall  not  apply  to  two  person
coverage.  In  the case of individual or two person coverages the corpo-
ration must also permit the person to whom the policy is issued to elect
such coverage of newborn infants from the moment of birth. If  notifica-
tion and/or payment of an additional premium or contribution is required
to  make  coverage  effective  for  a  newborn  infant, the coverage may
provide that such notice and/or payment be  made  within  no  less  than
thirty  days  of  the  day  of birth to make coverage effective from the
moment of birth. This election shall not be  required  in  the  case  of
student  insurance  or  where  the group remitting agent's plan does not
provide coverage for dependent children.  IN ANY CASE IN WHICH  COVERAGE
OF  DEPENDENT CHILDREN, AS DEFINED IN SUBPARAGRAPH (B) OF PARAGRAPH FOUR
OF SUBSECTION (A) OF SECTION THREE THOUSAND TWO HUNDRED SIXTEEN OF  THIS
CHAPTER, IS PROVIDED, THE COST OF SUCH COVERAGE SHALL BE PAID FOR BY THE
CONTRACT  HOLDER  OR  PERSON  IN  WHOSE  NAME  SUCH  CONTRACT IS ISSUED;
PROVIDED THAT SUCH HOLDER OR PERSON MAY REQUIRE THE  COVERED  PERSON  TO
PAY PART OR ALL OF THE CONTRACT RIDER COST.
  S  7. The insurance law is amended by adding a new section 215 to read
as follows:
  S 215. STUDY OF COVERAGE OF  DEPENDENT  CHILDREN.  THE  SUPERINTENDENT
SHALL  ORDER  A  STUDY  OF THE UTILIZATION TRENDS AND EXPERIENCE AND THE
RATE AND PREMIUM IMPACT TO HEALTH INSURANCE CONSUMERS OF THE  ADDITIONAL
INSURANCE  COVERAGE OF DEPENDENT CHILDREN REQUIRED BY THE CHAPTER OF THE
LAWS OF TWO THOUSAND NINE WHICH ADDED THIS SECTION. SUCH STUDY SHALL  BE
PERFORMED  BY  A  MEMBER OF THE AMERICAN ACADEMY OF ACTUARIES. THE STUDY
SHALL BE COMPLETED AND A REPORT SUBMITTED ON OR BEFORE SEPTEMBER  FIRST,

S. 2736                             4

TWO  THOUSAND  TWELVE TO THE GOVERNOR, THE SUPERINTENDENT, THE TEMPORARY
PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY.
  S  8.  This  act  shall take effect January 1, 2010 and shall apply to
policies and contracts issued, renewed, modified, altered or amended  on
or  after  such effective date; provided, that this act shall expire and
be deemed repealed December 31, 2013.

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