Similar to the requirements that have had property-casualty insurance producers emailing their clients for the past week, a new state regulation requires health insurance producers to notify their clients about new temporary rules.
An emergency regulation issued by the New York State Department of Financial Services last week requires health plans and insurers to make certain concessions to customers experiencing financial hardship due to the COVID-19 pandemic. DFS issued the regulation to comply with an executive order issued by Gov. Andrew Cuomo on April 7.
The regulation, which is in effect from April 7 to May 7, applies to insurers, health maintenance organizations (HMOs), and student health plans and any individual, small group, or student blanket comprehensive health insurance policies they issue. The insurers, HMOs and plans must extend the period for the payment of premiums to the later of the expiration of the applicable contractual grace period and 11:59 p.m. on June 1, 2020 for any policyholder or contract holder who can demonstrate financial hardship from the pandemic. Insurers, HMOs and plans must pay claims during that time. Also:
- They cannot retroactively cancel policies, charge late fees, or report overdue payments to consumer reporting agencies or debt collectors for those in financial hardship
- They must provide information about alternative policies and plans they offer, along with contact information for New York State of Health
- They must, by April 21, mail, email or deliver written notice to every policyholder and contract holder of the regulation's provisions and a toll-free number to call to discuss billing and make alternative payment arrangements
- Notify insurance producers and any third-party administrators with whom or which the insurer does business, by April 21, of the regulation's provisions
"A licensed insurance producer who procured the individual, small group, or student blanket comprehensive health insurance policy for the policyholder or contract holder shall mail or deliver, which may include email, notice to the policyholder or contract holder of (the regulation's provisions)" by April 21.
In a communication to Big I New York last week regarding the notices to property-casualty policyholders, DFS said that producers are not required to send these notices through U.S. Mail.
Insurers must accept written attestation from the policy or contract holder of financial hardship from the pandemic. The regulation's new restrictions apply only to policy terminations resulting from non-payment of premium and not for any other cause. The rules clearly state that this is a deferral of premium payment obligations, not a waiver or forgiveness of them.
Members can download a sample letter developed by the New York State Association of Health Underwriters from the Coronavirus Resource Page on this website. The content of this notice is for informational purposes only, and is not intended to provide legal advice. You should contact your legal counsel for legal guidance.