December 1, 1981
CIRCULAR LETTER NO. 24 (1981)
TO: ALL INSURERS LICENSED TO WRITE ACCIDENT AND HEALTH INSURANCE IN NEW YORK STATE
RE: CHAPTER 28, LAWS OF 1981: COVERAGE FOR ALCOHOLISM AND ALCOHOL ABUSE
Chapter 28, Laws of 1981 requires that every insurer issuing a group policy for delivery in this state which provides coverage for inpatient hospital care, must make available and if requested by the contractholder provide, coverage for the diagnosis and treatment of alcoholism or alcohol abuse, however defined in such policy.
Such coverage shall be at least equal to the following:
1. Detoxification: Inpatient benefits may not be limited to less than seven days of active treatment in any calendar year;
2. Rehabilitation: Inpatient benefits may not be limited to less than thirty (30) days in any calendar year;
3. Outpatient care: Benefits may not be limited to less than thirty (30) outpatient visits in any calendar year.
Coverage may be limited to institutions recognized and approved by the Joint Commission on Accreditation of Hospitals, or programs certified by the Division of Alcoholism and Alcohol Abuse as an alcoholism treatment program.
Such coverage shall be made available at the inception of all new policies and with respect to policies issued before the effective date of Chapter 28 at the first anniversary date thereafter, without evidence of insurability, and at any subsequent anniversary date, subject to such evidence.
Chapter 28 of the Laws of 1981 permits the use of deductibles and coinsurance provisions in providing coverage for alcoholism and alcohol abuse. The Department recognizes that there are many possible benefit structures utilizing deductible and coinsurance factors which could be considered reasonable and consistent with other policy benefit provisions. Therefore, the Department is not at this time adopting specific standards for deductible and coinsurance provisions, however, the Department will review all contract and rider forms submitted for approval to determine if the benefit structure is reasonable, consistent with the benefit structure for other covered conditions and in conformance with the intent of the law.
In evaluating the benefit structure, cost to policyholders will be an important consideration. It is the Department's belief that the coverage required by Chapter 28 should not be structured or priced in such a manner that it would make its purchase unlikely or impossible.
Recognizing there is limited experience data for this particular benefit on which to base rates, the Department will accept the rates stated below as being reasonable for the addition of the minimum statutory benefit levels listed on page one when subject to no deductible or coinsurance. Rates consistent with those below for coverage subject to the deductible and coinsurance provisions will also be acceptable.
Monthly Premiums for the Addition of Statutory Alcoholism Benefits to Group Health Insurance Policies with no Deductible or Coinsurance Provisions
In view of the January 1, 1982 effective date for this legislation, forms and rates to provide this coverage should be submitted to the Department for review and approval as soon as possible.
Very truly yours,
Albert B. Lewis
Superintendent of Insurance