BILL NUMBER:  S6496A

 TITLE OF BILL :  An act to amend the insurance law, in relation to
discounting uninsured dental services

 PURPOSE OR GENERAL IDEA OF BILL :

To prevent insurance companies from including in their contracts any
provisions that relate to or affect dental services that they do not
insure.

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1 prevents an insurance or managed care company from including
in any insurance or managed care contract any provisions that relate
to or affect dental services that are not covered by the contract.

Section 2 makes the bill effective January 1, 2018, and applicable to
any insurance or managed care contracts issued or entered into on or
after that date.

 JUSTIFICATION :

Existing New York State Insurance Law - Section 4224(d) (1) of the
Insurance Law - prohibits interdependent sales whereby an, insurer
puts into its insurance policies products or services that are not
              

insured as a means of interdependently selling that policy and the
uninsured items to its insureds. Some insurers are routinely flouting
that law by including in their dental plans discounts on dental
services they do not insure and then requiring dentists to provide
such discounts in order to be a participating provider in the dental
insurance plan. In effect, the insurer subsidizes the sale of its
insurance plan to patients by using money from dentists offered in the
form of discounts on uninsured dental services. Simultaneously, the
insurer is selling that discount product to patients as part of the
insurance policy as an inducement to buy the insurance policy.  This
pernicious marketing practice to sell dental insurance plans by
coupling them to discounts on uninsured dental services has been
allowed to continue because regulators have had difficulty
distinguishing between insured and uninsured dental services. The bill
makes it clear that no insurer can place into their contracts any
provisions relating to dental services that they do not insure.

This bill is necessary to restore sensible enforcement of the law
against interdependent sales with respect to dental insurance plans.
Many other states have outlawed this practice directly in a similar
way, using the logic that dental insurers should not be influencing
the prices or other aspects of dental services that they do not insure
at all and never pay for. However, New York does not need this logic,
compelling though it is, because New York long ago prevented
interdependent sales schemes in insurance plans and this law merely
clarifies that it applies to uninsured dental services as it would to
any other improper interdependent sales scheme. Several dental
insurers, including Cigna and Delta Dental, do not engage in this
practice in New York in recognition of the pernicious aspects of doing
so. The law is timed to take effect on January 1, 2018, and only to
apply to insurance or managed care contracts issued or entered into on
or after that date.

 PRIOR LEGISLATIVE HISTORY :

None.

 FISCAL IMPLICATIONS :

None to the state.
 EFFECTIVE DATE :
This act shall take effect on January 1, 2018, and apply to insurance
and managed care contracts issued or entered into on or after that
date.