The Business Council strongly opposes S.1507 / A.2007 Article VII Health & Mental Hygiene, Subpart F of Part J of the Governor’s Budget proposal, which would severely impact non-ACA discretionary insurance products, such as dental and vision coverage, voluntarily offered by employers in their benefits packages.
While the proffered justification for this legislation has been a codification of the Affordable Care Act (ACA), the bill goes far beyond the bounds of the ACA, unnecessarily granting the Department of Financial Services (DFS) broad new authorities, specifically over out-of-state group policies which have been approved in an employer’s home state. The extraterritorial overreach proposed in this legislation would require employers who operate in and outside of New York to obtain separate coverages and benefits for their New York employees. This, in turn, would force insurers to make New York specific products, which would inevitably drive up the costs of such products, if the insurer offered them at all.
Aside from an increase in regulatory power for DFS, this proposal offers no benefits or greater protections to anyone. Most, if not all, of the products impacted by this legislation are discretionary group benefits such as dental insurance, vision insurance and accident insurance, most often administered by a third-party or by an employer group policyholder, such as The Business Council.
These are plans that our members choose to offer their employees, however, the insurer does not necessarily have the capacity to even know where individual certificate holders reside or to issue or change individual certificates based on state of residence. Given such a new hurdle, we and many other associations and employers would be unable to provide these coverages to our member and in turn, their employees.
The extension of DFS’s authority to these products, when issued to an employer in another state, is an unnecessary and damaging overstep. It will create a burden on employers who are simple trying to provide their employees with added benefits. This legislation, if enacted, will stymie employers in offering these benefits to their employees into the future. There is simply no up-side to this proposal.
For these reasons, and on behalf of our 2,300 of members and their 1,000,000 employees, The Business Council strongly opposes this legislation and urges that the Legislature protects employers’ abilities to easily offer these discretionary insurances by rejecting this proposal.