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Press Release

November 1, 2018

Contact: Richard Loconte, 212-709-1691


Federal Actions that Attempt to Undermine the ACA Do Not Preempt State Insurance Law

Limited Benefit Plans Remain Illegal in New York

Association Health Plans Sold to New Yorkers Must Comply with New York Insurance Law

As New York’s 2019 Open Enrollment Period begins, Financial Services Superintendent Maria T. Vullo today took the opportunity to remind insurers and brokers that regardless of continued actions by the federal government to undermine the Affordable Care Act (ACA), health plans in New York must contain all the consumer protections guaranteed under state law and insurers may not end-run the law by selling limited benefit policies or association health plans which fail to comply with New York state mandates.  

“New York is a national leader and steadfast supporter of the Affordable Care Act and DFS continues to take all actions necessary to ensure that all New Yorkers have access to comprehensive health care coverage as provided by New York law,” Superintendent Vullo said.  “DFS will vigorously enforce New York laws which provide consumers with specific mandated benefits and prohibit insurers from discriminating against people with pre-existing conditions or imposing annual or lifetime benefits limits.  New York consumers should know that changes in federal laws engineered by the Trump Administration do not preempt the strong consumer safeguards enshrined in New York law.  These safeguards protect people from gimmicks like junk limited benefit plans which cost little and, when they’re needed most, deliver few, if any, benefits.”

DFS is reminding health insurers that they cannot offer limited benefits health insurance policies or contracts in New York that do not comply with all statutory and regulatory requirements for comprehensive health insurance coverage.  Insurers with such policies or contracts in-force should immediately contact DFS and either discontinue the policies and contracts upon renewal or amend the policies and contracts so that they meet all statutory and regulatory requirements for comprehensive health insurance, including specific mandated benefits, minimum loss ratios, community rating for individual and small group plans, prohibitions against annual or lifetime limits and prohibitions barring insurers from discriminating against people with pre-existing conditions.

DFS is also reminding insurers, insurance agents and brokers that New York requirements for accident and health insurance coverage obtained through associations are not preempted by federal law.  Even if an association is considered a “single group health plan” under federal law, New York State law must be met; issuers must determine what type of group the association is under the New York Insurance Law and ensure that the coverage issued to the association complies with all New York Insurance Law and regulation requirements.  For example, such plans must comply with rules governing the types of groups permitted under New York law and association insurance plans sold to New Yorkers must provide all the comprehensive health benefits mandated under New York law.

In addition to the circular letters, the Department posted answers to frequently asked questions about association plans on the Department’s website.

Today’s actions continue the Department’s work to support the protections provided by the ACA and mandated by New York law.  Under the leadership of Governor Andrew M. Cuomo, New York has taken aggressive action to protect New Yorkers' access to quality, affordable health care, regardless of federal actions, mandating that insurers cannot discriminate against New Yorkers with preexisting conditions or based on age or gender; mandating that insurance policies cover all 10 essential benefits set out in the ACA; and banning all insurers who withdraw from offering Qualified Health Plans on the State Health Marketplace from participation in any state programs.  DFS has also promulgated regulations to ensure that insurers cover over-the-counter emergency contraception in addition to all other contraceptive drugs, devices or other products for women approved by the Federal Food and Drug Administration, as well as the dispensing of 12 months of contraceptives at one time, and all medically necessary abortions, all without co-insurance, co-pays or deductibles.

This past August, DFS reduced health insurers’ 2019 requested rates for New York’s individual market by 64% overall for individuals, saving consumers $314 million. DFS also reduced requested rates for 2019 small group plans by 50%, saving small businesses $279 million.  Nearly 1.4 million New Yorkers are enrolled in individual and small group plans.  New York was one of the first states in the nation to implement its own health insurance exchange under the ACA.  Since then, New York has cut the uninsured rate in half from 10% to 5% and premiums in the individual market have remained more than 55% lower after adjusting for inflation and before the application of federal tax credits.


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