Minimum Standards for Form, Content and Sale of Health Insurance, Including Standards for Full ...
NY-ADR
9/19/18 N.Y. St. Reg. DFS-25-18-00005-E
NEW YORK STATE REGISTER
VOLUME XL, ISSUE 38
September 19, 2018
RULE MAKING ACTIVITIES
DEPARTMENT OF FINANCIAL SERVICES
EMERGENCY RULE MAKING
I.D No. DFS-25-18-00005-E
Filing No. 843
Filing Date. Aug. 31, 2018
Effective Date. Aug. 31, 2018
Minimum Standards for Form, Content and Sale of Health Insurance, Including Standards for Full and Fair Disclosure
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Amendment of Part 52 (Regulation 62) of Title 11 NYCRR.
Statutory authority:
Financial Services Law, sections 202, 302; General Municipal Law, section 205-cc; Insurance Law, sections 301, 3201, 3217, 3221 and 4237
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
Chapter 334 of the Laws of 2017 added a new General Municipal Law Section 205-cc requiring every legally organized fire district, department or company in this state to provide eligible volunteer firefighters with enhanced cancer benefits. The benefits may either be self-funded by a fire district, department or company or be provided in an insurance policy. This amendment to Insurance Regulation 62 is necessary because Insurance Regulation 62 currently does not permit the combination of benefits required under the statute. The amendment also establishes minimum standards for the policies providing this insurance coverage.
The benefits required pursuant to General Municipal Law Section 205-cc must be provided beginning on January 1, 2019. Fire districts, departments and companies will soon begin seeking volunteer firefighter enhanced cancer insurance policies. To provide insurers with sufficient time to develop their policy forms and premium rates and receive approval prior to January 1, 2019, it is imperative that this amendment be promulgated on an emergency basis for the public’s general welfare.
Subject:
Minimum Standards for Form, Content and Sale of Health Insurance, Including Standards for Full and Fair Disclosure.
Purpose:
To establish minimum requirements for policies of volunteer firefighter enhanced cancer insurance.
Text of emergency rule:
Section 52.16(a) is amended to read as follows:
(a) No policy or certificate shall provide benefits for specified diseases, or for procedures or treatments unique to specified diseases, and no policy or certificate shall provide additional benefits for such specified diseases or procedures, unless the policy or certificate meets the standards set forth in section 52.15 or section 52.22 of this [part] Part.
Section 52.18(d) is amended by adding a new paragraph (3) to read as follows:
(3) No group or blanket policy of accident and health insurance may offset the payment of benefits thereunder by benefits provided pursuant to General Municipal Law section 205-cc.
A new section 52.22 is added to read as follows:
Section 52.22 Volunteer firefighter enhanced cancer insurance.
(a) General Municipal Law section 205-cc requires every legally organized fire district, department or company in this state to provide and maintain for each eligible volunteer firefighter an enhanced cancer disability benefit insurance program. The law requires the Division of Homeland Security and Emergency Services’ Office of Fire Prevention and Control to promulgate regulations, in consultation with the Department of Financial Services and the Workers’ Compensation Board, to implement General Municipal Law section 205-cc. Those regulations are contained in 9 NYCRR 210. This section establishes the minimum requirements for policies issued in satisfaction of those requirements.
(b) Definitions. As used in this section:
(1) Active volunteer firefighter shall have the meaning set forth in 9 NYCRR 210.
(2) Cancer means a disease caused by an uncontrolled division of abnormal cells in a part of the body or a malignant growth or tumor resulting from the division of abnormal cells affecting the prostate or breast, lymphatic, hematological, digestive, urinary, neurological, or reproductive systems, or melanoma.
(3) Insured firefighter means a volunteer firefighter covered under the policy and who meets the eligibility requirements for coverage set forth in 9 NYCRR 210.
(4) Total disability shall have the meaning set forth in 9 NYCRR 210.
(5) Volunteer firefighter enhanced cancer insurance means a blanket insurance policy or certificate that provides cancer benefits to volunteer firefighters in accordance with General Municipal Law section 205-cc.
(c) General Rules.
(1) A volunteer firefighter enhanced cancer insurance policy or certificate issued in satisfaction of the requirements of General Municipal Law section 205-cc shall be clearly labeled as “volunteer firefighter enhanced cancer insurance.” An insurer shall issue a policy of volunteer firefighter enhanced cancer insurance only as a stand-alone policy and shall not issue the coverage combined or offered in conjunction with any other insurance.
(2) Every volunteer firefighter enhanced cancer insurance policy or certificate shall conspicuously set forth the following statement on the first page of the policy or certificate in boldface type: “This is a limited policy (or certificate). It pays benefits only for specific losses from cancer. Read it carefully.”
(3) An insurer may not impose any preexisting condition limitation or exclusion on coverage for an insured firefighter.
(4) Benefits shall be payable under the policy without regard to other coverage except:
(i) benefits shall not be payable if the insured is already provided paid firefighter benefits under General Municipal Law Article 10; and
(ii) the monthly disability benefit provided pursuant to subdivision (d)(1)(iii) of this section shall be secondary to disability benefits from any other source (other than individual disability income insurance purchased by the insured firefighter) such as group or blanket disability, Social Security disability or workers’ compensation benefits. Where the policy is secondary, benefits shall be limited to the difference between the amount paid from the other source and the benefit specified in the policy.
(5) The policy shall comport with the claims process requirements provided in 9 NYCRR 210.
(6) The exclusions in section 52.16(c) of this Part shall not be applicable to this coverage. A claim for benefits may be denied only for the reasons set forth in 9 NYCRR 210.
(7) Conditions for nonrenewal or termination by the insurer shall be fully set forth in the policy. Notices of nonrenewal or termination shall provide for at least 60 days’ prior written notice to the policyholder.
(8) Any change in premium rates shall be subject to the prior approval of the superintendent. The insurer shall provide each policyholder with at least 60 days’ prior written notice before implementing an approved rate adjustment.
(d) Benefits.
(1) In accordance with General Municipal Law section 205-cc, every volunteer firefighter enhanced cancer insurance policy shall include each of the following benefits:
(i) A lump sum benefit of $25,000 for each diagnosis payable to the insured firefighter upon acceptable proof to the insurer of a diagnosis by a board-certified physician in the medical specialty appropriate for the type of cancer diagnosed that there are one or more malignant tumors characterized by the uncontrollable and abnormal growth and spread of malignant cells with invasion of normal tissue and that either:
(a) there is metastasis; and
(1) surgery, radiotherapy, or chemotherapy is medically necessary; or
(2) there is a tumor of the prostate, provided that it is treated with radical prostatectomy or external beam therapy; or
(b) the insured firefighter has terminal cancer, the firefighter’s life expectancy is 24 months or less from the date of diagnosis, and will not benefit from, or has exhausted, curative therapy.
(ii) A lump sum benefit of $6,250 for each diagnosis payable to the insured firefighter upon acceptable proof to the insurer of a diagnosis by a board-certified physician in the medical specialty appropriate for the type of cancer involved that either:
(a) there is carcinoma in situ such that surgery, radiotherapy, or chemotherapy has been determined to be medically necessary;
(b) there are malignant tumors that are treated by endoscopic procedures alone; or
(c) there are malignant melanomas.
(iii) A monthly benefit of $1,500, of which the first payment shall be made six months after total disability and submission of acceptable proof of such disability to the insurer that the disability is caused by cancer and that such cancer precludes the insured firefighter from serving as a firefighter. Such benefit shall continue for up to 36 consecutive monthly payments.
(a) Any insured firefighter receiving such monthly benefits may be required to have his or her condition reevaluated. In the event any such reevaluation reveals that the insured firefighter has regained the ability to perform duties as a firefighter, then his or her monthly benefits shall cease the last day of the month of reevaluation.
(b) In the event that there is a subsequent reoccurrence of a disability caused by cancer that precludes the insured firefighter from serving as a firefighter, he or she shall be entitled to receive any remaining monthly payments.
(iv) A death benefit in the amount of $50,000 that is payable to the insured firefighter or his or her beneficiary upon acceptable proof by a board-certified physician that the insured firefighter's death resulted from complications associated with cancer.
(2) The combined total of all lump sum benefits received during an insured firefighter’s lifetime pursuant to subparagraphs (i) and (ii) of paragraph (1) of this subdivision shall not exceed $50,000.
(3) An insured firefighter shall remain eligible for the benefits in subparagraphs (i), (ii) and (iv) of paragraph (1) of this subdivision for 60 months after the formal cessation of the insured firefighter’s status as an active volunteer firefighter.
(4) Any policy that conditions payment upon pathological diagnosis of a covered cancer shall also provide that if such a pathological diagnosis is medically inappropriate, a clinical diagnosis will be accepted in lieu thereof. Any type of medically appropriate diagnosis shall be accepted.
A new subdivision 52.45(k) is added to read as follows:
(k) Volunteer firefighter enhanced cancer insurance. The minimum loss ratio for volunteer firefighter enhanced cancer insurance shall be 75 percent.
This notice is intended
to serve only as a notice of emergency adoption. This agency intends to adopt the provisions of this emergency rule as a permanent rule, having previously submitted to the Department of State a notice of proposed rule making, I.D. No. DFS-25-18-00005-EP, Issue of June 20, 2018. The emergency rule will expire October 29, 2018.
Text of rule and any required statements and analyses may be obtained from:
Tobias Len, Department of Financial Services, One Commerce Plaza, Albany, NY 12257, (518) 486-2970, email: [email protected]
Regulatory Impact Statement
1. Statutory authority: Financial Services Law (“FSL”) Sections 202 and 302, General Municipal Law Section 205-cc (“GML”), and Insurance Law (“IL”) Sections 301, 3201, 3217, 3221, and 4237.
FSL Section 202 establishes the office of the Superintendent of Financial Services (“Superintendent”).
FSL Section 302 and IL Section 301, in pertinent part, authorize the Superintendent to prescribe regulations interpreting the IL and to effectuate any power granted to the Superintendent in the IL, FSL, or any other law.
GML Section 205-cc requires every legally organized fire district, department or company in this state to provide and maintain for each eligible volunteer firefighter an enhanced cancer disability benefit insurance program.
IL Section 3201 requires policy forms to be approved by the Superintendent.
IL Section 3217 authorizes the Superintendent to issue regulations to establish minimum standards, including standards for full and fair disclosure, for the form, content and sale of accident and health insurance policies.
IL Section 3221 prohibits a policy of group or blanket accident and health insurance, except as provided in IL Section 3221(d), to be delivered or issued for delivery in New York unless it contains in substance the provisions set forth in IL Section 3221 or provisions that are in the opinion of the Superintendent more favorable to the holders of such certificates or not less favorable to the holders of such certificates and more favorable to policyholders.
IL Section 4237 defines a blanket accident policy, a blanket health insurance policy, and a blanket accident and health insurance policy.
2. Legislative objectives: Chapter 334 of the Laws of 2017 added a new GML Section 205-cc requiring every legally organized fire district, department or company in this state to provide eligible volunteer firefighters with enhanced cancer benefits. The benefits may either be self-funded by a fire district, department or company or be provided in an insurance policy. This amendment accords with the public policy objectives that the Legislature sought to advance in GML Section 205-cc by establishing minimum requirements for policies of volunteer firefighter enhanced cancer insurance.
3. Needs and benefits: GML Section 205-cc requires every legally organized fire district, department or company in this state to provide volunteer firefighter enhanced cancer benefits as specifically provided in section 205-cc to their eligible volunteer firefighters. This amendment is necessary because Insurance Regulation 62 currently does not permit an insurer authorized to write accident and health insurance in New York State to issue policies providing the combination of benefits required under the statute. The amendment also establishes minimum standards for the policies issued pursuant to GML section 205-cc.
4. Costs: This amendment does not impose compliance costs on state or local governments. Although fire districts, departments or companies will have to provide the benefits to their members, it is the statute and not the regulation that imposes such requirement.
Insurers that elect to sell volunteer firefighter enhanced cancer insurance may incur costs to file new policy forms and premium rates with the Superintendent. However, form and rate filing requirements are imposed by the Insurance Law and not by this amendment. Moreover, an insurer does not have to sell the coverage.
The Department of Financial Services (“Department”) may incur costs because the Department will need to review new policy forms and premium rates; however, existing law requires that these filings be made. Any additional costs incurred by the Department should be minimal and the Department expects to absorb the costs in its ordinary budget.
5. Local government mandates: This amendment establishes minimum requirements for policies of volunteer firefighter enhanced cancer insurance and does not impose a new mandate on any local government. Although fire districts, departments or companies will have to provide the benefits to their members, it is the statute and not the regulation that imposes such requirement.
6. Paperwork: Insurers that elect to sell volunteer firefighter enhanced cancer insurance will need to file new policy forms and premium rates with the Superintendent. This filing requirement is an existing requirement imposed by the Insurance Law and not by this amendment.
7. Duplication: This amendment does not duplicate, overlap, or conflict with any existing state or federal rules or other legal requirements.
8. Alternatives: The Department considered not promulgating this amendment. However, the Department is concerned about the negative impact on volunteer firefighters if there are no minimum standards established for the volunteer firefighter enhanced cancer insurance coverage. Moreover, the regulation contained provisions that would have precluded authorized insurers from providing the coverage in New York. As a result, the Department determined that it is necessary to establish minimum standards for this new type of insurance.
9. Federal standards: The amendment does not exceed any minimum standards of the federal government for the same or similar subject areas.
10. Compliance schedule: The Department is promulgating this amendment on an emergency basis to provide insurers with sufficient time to develop their policy forms and premium rates and receive approval prior to January 1, 2019.
Regulatory Flexibility Analysis
1. Effect of the rule: This amendment to the regulation applies to insurers authorized to write accident and health insurance in New York State that elect to sell volunteer firefighter enhanced cancer insurance coverage. Although most insurers are not small businesses, industry has asserted previously that certain insurers subject to the regulation are small businesses but has not provided the Department of Financial Services (“Department”) with specific insurers or the number of such entities.
The amendment does not impose any impact, including any adverse impact, or reporting, recordkeeping, or other compliance requirements on any local governments. The basis for this finding is that this amendment is directed at insurers that elect to sell volunteer firefighter enhanced cancer insurance. Although every legally organized fire district, department or company in this state will have to provide the benefits to their members, it is General Municipal Law Section 205-cc and not the regulation that imposes such requirement.
2. Compliance requirements: An insurer that is a small business that elects to sell the insurance would have to file new policy forms and premium rates with the Department. However, form and rate filing requirements are imposed by the Insurance Law and not by this amendment. Moreover, an insurer does not have to provide the coverage.
No local government will have to undertake any reporting, recordkeeping, or other affirmative acts to comply with the amendment.
3. Professional services: It is not anticipated that any insurer that is a small business affected by this amendment will need to retain professional services to comply with this amendment.
4. Compliance costs: This amendment does not impose compliance costs on state or local governments. Although fire districts, departments or companies will have to provide the benefits to their members, the requirement is imposed by statute and not the regulation.
Insurers that elect to sell volunteer firefighter enhanced cancer insurance may incur costs to file new policy forms and premium rates with the Department. However, as noted, form and rate filing requirements are imposed by the Insurance Law and not by this amendment. Moreover, an insurer does not have to provide the coverage.
5. Economic and technological feasibility: No insurer that is a small business affected by this amendment should experience any economic or technological impact as a result of the amendment.
6. Minimizing adverse impact: The Department considered the criteria in State Administrative Procedure Act (“SAPA”) section 202-b(1) but the Department could not design the amendment to minimize any adverse impact on insurers that are small businesses since the minimum requirements for the coverage must be uniform. However, the Department expects the potential benefits of this amendment to outweigh any additional compliance costs that insurers may incur.
7. Small business and local government participation: The Department will comply with SAPA section 202-b(6) by publishing the amendment to the regulation in the State Register and posting it on the Department’s website.
Rural Area Flexibility Analysis
The Department of Financial Services finds that this amendment to Part 52, which establishes minimum standards for form, content and sale of volunteer firefighter enhanced cancer insurance authorized by General Municipal Law Section 205-cc, does not impose any additional burden on persons located in rural areas, and will not have an adverse impact on rural areas. This amendment applies uniformly to insurers that do business in both rural and non-rural areas of New York State. This amendment will not impose any additional costs on rural areas.
Job Impact Statement
The Department of Financial Services finds that this amendment to Part 52 should have no negative impact on jobs or employment opportunities in this state. The amendment establishes minimum standards for volunteer firefighter enhanced cancer insurance policies that, pursuant to GML Section 205-cc, every legally organized fire district, department or company in this state must provide and maintain for each eligible volunteer firefighter unless the fire district, department or company self-funds the benefits.
Assessment of Public Comment
The agency received no public comment.
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