§ 217. Employee notification and remittance of premiums; group
policies of accident and health insurance. 1. Statement of public
policy. The legislature finds that in today's society health and
accident insurance coverage for medical care and treatment is of prime
importance to all employees and their dependents within the state of New
York. Adequate and prospective planning is necessary to insure that such
coverage is in effect at the time of commencement of the need for
medical and health care. Many employees and their dependents in New York
State are covered through group policies issued to their employers,
employee organizations or trustees of employee welfare funds and no
statutory provision has heretofore afforded these employees and their
dependents the right as certificate holders of a group accident or group
health policy to receive notification of the intended termination or
substitution of the group policy and to have premiums remitted to
insurers on their behalf should they choose to exercise continuation
privileges available under law.

Accordingly, it is the declared public policy of the state of New York
that sufficient and timely notice be afforded each employee covered
under a group accident or group health policy of the intended
termination or substitution of such policy and that employers be
required to remit premiums to insurers on behalf of individuals
exercising their right to continuation coverage under the law.

2. Definitions. As used in this section:

(a) "Policyholder" shall mean any person, co-partnership, corporation,
trade association, joint stock association, incorporated or
unincorporated association, trustees or labor organization as defined in
subsections (c) and (g), respectively, of section four thousand four
hundred two of the insurance law or any other entity to whom a policy or
contract of group accident, group health or group accident and health
insurance has been issued.

For the purpose of this section, "policyholder" shall also include any
group remitting agent.

(b) "Certificate holder" shall mean any person insured, on either a
contributory or non-contributory basis, by a policy or contract of group
accident, group health or group accident and health insurance, as well
as persons covered by group remittance policies.

3. Notification. A policyholder shall, subsequent to receipt from the
insurer of notice of termination pursuant to subsection (k) of section
four thousand two hundred thirty-five of the insurance law provide
written notice to the certificate holders of such policy of such
termination. In any case where the policyholder is substituting such
policy with another policy providing similar coverage for the same
certificate holders, the policyholder shall provide certificate holders
with a written notice including therein the name of the substituted
insurer. Where the employees are represented by a labor organization,
such notice shall be given to the representative of that labor
organization. Such written notice shall be in accordance with the rules
and regulations of the superintendent of financial services, promulgated
pursuant to subsection (l) of section four thousand two hundred
thirty-five of the insurance law.

4. Exception. The provisions of subdivision three of this section
shall not be deemed to apply if, within ten days subsequent to receipt
of notice of termination from the insurer, the policyholder has taken
necessary steps whereby the intended termination is rendered null and
void.

5. Where the policyholder has contracted with another insurer to
replace the existing insurer for the providing of similar and continuous
coverage for the same certificate holders he shall file an affidavit
with the commissioner of labor and superintendent of financial services
to that effect.

6. Remittance of premiums. Any policyholder who receives notification
from an individual entitled to exercise a right to continuation of
coverage by the policyholder's insurer pursuant to section three
thousand two hundred twenty-one of the insurance law, shall, no later
than thirty days subsequent to receipt of premiums from such individual,
remit such premiums to the insurer on behalf of such individual and
provide evidence to the individual that the premium has been remitted.

6-a. Residence location to accompany enrollment data. When a
policyholder provides information to an insurer or health maintenance
organization certified under article forty-four of the public health law
or licensed pursuant to the insurance law regarding the initial or
continued enrollment eligibility of a certificate holder, the policy
holder must include the current united states postal service zip code
and state in which the certificate holder currently resides.

7. Penalties. (a) Any policyholder who fails to comply with this
section, shall forfeit to the people of the State a sum up to five
thousand dollars, to be recovered by the commissioner in a civil action.
Where the policyholder is a corporation, trade association, joint stock
association, incorporated or unincorporated association, the president,
secretary and treasurer thereof shall be liable for any forfeiture.

(b) In addition to such penalty, where the failure to comply involves
the failure to notify an employee of the termination of a group accident
or group health policy pursuant to subdivision three of this section or
the failure to remit premiums pursuant to subdivision six of this
section, or the failure to provide an individual with notice of
termination pursuant to subdivision six of section one hundred
ninety-five of this chapter, the policy holder shall also be liable, in
a civil action brought by the individual entitled to receive the notice
of termination or exercise the right to continuation of coverage in a
court of competent jurisdiction, to appropriate damages which shall
include reimbursement for medical expenses which were not covered by the
policyholder's insurer by virtue of his termination of the policy or
failure to remit such premiums.