Legislative Memo

Lev Ginsburg
Director of Government Affairs
T 518.465.7511


S.4540 (Seward) / A.7439 (Cahill)



Health insurance premium rate setting transparency



June 1, 2015


The Business Council supports S.4540 (Seward) / A.7439 (Cahill), which would require that any adjustment to a health insurance rate filing made by the Department of Financial Services (DFS), comply with generally accepted actuarial principles and include detailed explanations of the actuarial assumptions and methods used in the agency’s determination. The bill also allows for appeals from the determination, with all final rate determinations certified by an actuary.

New York State employers, responding to Business Council surveys, have overwhelmingly identified employee health care as their top cost-of-doing business concern. The Affordable Care Act (ACA) has upped the ante, so to speak, on the unease of employers about their health care costs and has raised serious questions, especially among small businesses, about their ability to meet current and looming government mandates while staying competitive.

In addition to cost, predictability is paramount in predicting business costs for coming years. As changes resulting from implementation of the ACA have substantially altered the landscape of health insurance, the inconsistent ways in which DFS has made and publicized its decisions regarding health plan rates, without any meaningful explanation of the decision, has left employers and health plans alike with no reasonable way to predict the premiums that will be allowed for the coming year.

By requiring DFS to justify its premium rate decisions through sound actuarial assumptions and methodologies, premium decreases and increases will become more predictable. Without rational, actuarially sound rate decisions, the prior approval process becomes highly politicized and undermines the health of the market.

Improved transparency is needed to guaranty stability in the marketplace.  A healthy market with a variety of coverage options is the only way to ensure that New Yorkers can hope to purchase insurance that fits both their health care needs and their budgets.

For these reasons, The Business Council urges passage of S.4540 (Seward) / A.7439 (Cahill).