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NY Law Signed, Prevents Insurers from Dropping Group Plans to Eliminate One High-cost Policyholder

Source: Associated Press

Posted on 20 Aug 2010

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New legislation has been signed in New York that will bar insurance companies from getting rid of group insurance plans in order to dump a single policyholder with expensive claims. The new law takes effect on January 1, 2011.

Under the new law, insurers must provide written notice 90 days in advance to all insured individuals covered by group plans, as well as their option to buy alternative replacement insurance.

It also establishes a review by state regulators to ensure that policyholders with serious medical conditions who used benefits in the year before a plan is discontinued will keep their present coverage if a similar alternative is not made available.