Regulatory Impact Statement for the fourth amendment to 11 NYCRR 39 (Insurance Regulation 144)
1. Statutory authority: The Superintendent's authority for the promulgation of the fourth amendment to Insurance Regulation 144 derives from Sections 202 and 302 of the Financial Services Law; Sections 301, 1117, 3201, 3217, 3221, 3229, 4235, 4237, and Article 43 of the Insurance Law; and Section 367-f of the Social Services Law.
Section 202 of the Financial Services Law establishes the office of the Superintendent.
Section 302 of the Financial Services Law and Section 301 of the Insurance Law, in material part, authorize the Superintendent to effectuate any power accorded to the Superintendent by the Financial Services Law, Insurance Law, or any other law, and prescribe regulations interpreting the Insurance Law.
Section 1117 of the Insurance Law authorizes the Superintendent to permit the sale of contracts in connection with a plan for long term care pursuant to the criteria set forth therein.
Section 3201 of the Insurance Law prohibits an accident and health insurance policy form to be delivered or issued for delivery in this state unless it has been filed with and approved by the Superintendent as conforming to the requirements of the Insurance Law and not inconsistent with the law.
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 and subscriber contracts of corporations organized under Article 32 and Article 43 of the Insurance Law, and Article 44 of the Public Health Law.
Section 3221 of the Insurance Law prohibits a policy of group or blanket accident and health insurance, except as provided in Insurance Law sect; 3221(d), to be delivered or issued for delivery in New York unless it contains in substance the provisions set forth therein or provisions which 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.
Section 3229 of the Insurance Law authorizes the Superintendent to issue regulations establishing minimum standards for qualifying plans under the Partnership for Long Term Care program pursuant to Social Services Law sect; 367-f.
Section 4235 of the Insurance Law prohibits a policy of group accident, group health or group accident and health insurance to be delivered or issued for delivery in this state unless it conforms to the descriptions set forth in that section.
Section 4237 of the Insurance Law defines a blanket accident policy, a blanket health policy, and a blanket accident and health policy.
Article 43 of the Insurance Law sets forth requirements for non-profit medical and dental indemnity, or health and hospital services corporations.
Section 367-f of the Social Services Law establishes the Partnership for Long Term Care Program.
2. Legislative objectives: The Partnership for Long Term Care Program (the "Partnership") was established to encourage New Yorkers to implement solutions for their future long term care needs by combining private long term care insurance with Medicaid Extended Coverage. Social Services Law Section 367-f originally required an individual to be covered under a Partnership insurance policy or certificate that provides a residential health care facility benefit of no less than three years in order for the individual to be eligible for Medicaid Extended Coverage. Section 82 of Part H of Chapter 59 of the Laws of 2011 amended Section 367-f of the Social Services Law to grant to an individual, who exhausts benefits under a Partnership insurance policy or certificate that provides a residential health care facility benefit of not less than two years, eligibility for medical assistance without spending down any assets ("Total Asset Protection"), thereby reducing the cost for New Yorkers to purchase Partnership policies.
3. Needs and benefits: Regulation 144 sets forth standards for the New York State Partnership for Long Term Care Program, including the minimum daily benefit amounts (DBAs) that participating insurers must pay under long term care policies. The current regulation includes a schedule of minimum DBAs for the ten-year period ending December 31, 2013.
The proposed amendment establishes a schedule – developed in consultation with the NYS Department of Health and the Partnership – of minimum DBAs from 2014 through 2023 by using an annual compound inflation factor of 3.5%. The inflation factor of 3.5% implements a recommendation of the Governor's Medicaid Redesign Team. This is the only change being made to the regulation. Both DOH and participating Partnership insurers are eager to update the schedule of minimum DBAs in anticipation of preparing Partnership Program marketing materials.
4. Costs: Insurers will incur no costs associated with the implementation of this amendment, because insurers that voluntarily participate in the Partnership program may use their current rates and forms. Similarly, the Department will have no costs associated with the implementation of this amendment. Local governments will also not incur any costs.
5. Local government mandates: These rules do not impose any program, service, duty or responsibility upon a city, town, village, school district or fire district.
6. Paperwork: The amendment imposes no new reporting requirements. Insurers voluntarily participating in the Partnership will not need to submit rates or forms since this amendment only establishes the minimum benefit amounts that insurers must pay for the next ten years.
7. Duplication: These changes to the Partnership do not duplicate or conflict with any existing federal or state requirements.
8. Alternatives: There are no alternatives to this amendment since the existing regulation only establishes benefits amounts through 2013. This regulation is necessary in order to establish the benefit amounts for the next ten years.
9. Federal standards: This amendment will not affect compliance with any federal standard in any manner.
10. Compliance schedule: The rule will take effect on January 1, 2014.
Regulatory Flexibility Analysis for Small Businesses and Local Governments for the fourth amendment to 11 NYCRR 39 (Insurance Regulation 144)
1. Effect of the rule: This amendment is directed at insurers that write New York State Partnership for Long Term Care program (“Partnership”) insurance, none of which falls within the definition of "small business" set forth in section 102(8) of the State Administrative Procedure Act. The Department of Financial Services has reviewed filed Reports on Examination and Annual Statements of these entities, and believes that there are none that are both independently owned and that employ fewer than 100 persons. The amendment merely reflects in dollar amounts the minimum daily benefit amounts from 2014 to 2023 that New York State Partnership insurers shall use.
Insurance agents and brokers who sell Partnership policies, many of whom are small businesses themselves, may be required to familiarize themselves with the new minimum daily benefit amounts. This regulation does not apply to or affect local governments.
2. Compliance Requirements: These regulations will not impose any reporting, recordkeeping, or other compliance requirements on small business or local governments.
3. Professional services: Small businesses or local governments will not need professional services to comply with the regulations.
4. Compliance costs: These regulations will not impose any compliance costs upon small businesses or local governments.
5. Economic and technological feasibility: Small businesses or local governments will not incur an economic or technological impact as a result of the regulations.
6. Minimizing adverse impact: These regulations apply to the Partnership long term care insurance market throughout New York State. The same requirements will apply uniformly, and do not impose any adverse or disparate impact on small businesses or local governments.
7. Small business and local government participation: These regulations are directed at insurers licensed to do business in New York State, none of which fall within the definition of small business as found in Section 102(8) of the State Administrative Procedure Act. Notice of the proposal was previously published in the Department’s June 2013 Regulatory Agenda. This notice was intended to provide small businesses with the opportunity to participate in the rule making process, but no input was received. Interested parties were also consulted through direct meetings during the development of this amendment. The changes contained in this amendment have been discussed by the Partnership governance board. The Partnership governance board is comprised of representatives from Partnership insurers and representatives from the Department of Financial Services, Department of Health and the State Office for the Aging which acts as the consumer representative on the board.
Statement setting forth the basis for the finding that the fourth amendment to 11 NYCRR 39 (Insurance Regulation 144) will not impose adverse economic impact or compliance requirements on rural areas
The Department of Financial Services finds that this rule does not impose any additional burden on persons located in rural areas and that it will not have an adverse impact on rural areas. This rule applies uniformly to regulated parties that do business in both rural and non-rural areas of New York State.
Job Impact Exemption for the fourth amendment to 11 NYCRR 39 (Insurance Regulation 144)
The amendment will not adversely impact job or employment opportunities in New York. The amendment merely reflects in dollar amounts the minimum daily benefit amounts from 2014 to 2023 that New York State Partnership insurers shall use.