Requires the superintendent of financial services to audit certain reports to ensure such insurers are in full compliance with federal and state mental health and substance use disorder parity requirements.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5746
SPONSOR: Brown K TITLE OF BILL:
An act to amend the insurance law, in relation to requiring the super-
intendent of financial services to audit certain reports submitted by
insurers to ensure such insurers are in full compliance with federal
and state mental health and substance use disorder parity requirements
PURPOSE OR GENERAL IDEA OF BILL:
Requires the superintendent of financial services to audit certain
reports to ensure such insurers are in full compliance with federal and
state mental health and substance use disorder parity requirements.
SUMMARY OF PROVISIONS:
Section 1: The insurance law, subsection (a) of section 343 as added by
chapter 207 of the laws of 2019, is amended to read as follows:
(ii) The superintendent shall audit each report submitted by the insurer
for the purpose of determining if such insurer is in full compliance
with federal and state mental health and substance use disorder parity
requirements. In addition, the superintendent shall investigate all
credible allegations of insurer improprieties and noncompliance. Where
the superintendent makes a determination that the insurer willfully
violated federal or state mental health and substance use disorder pari-
ty requirements the superintendent shall provide such findings, includ-
ing the reason or reasons for making such a determination, to the office
of the attorney general. The attorney general shall consider the super-
intendent's findings and, upon agreement with the superintendent's
determination, shall commence an action in the name of the people of the
state to enforce an insurer's required compliance with federal and state
mental health and substance use disorder parity requirements.
Section 2: Identifies effective date.
JUSTIFICATION:
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) is a
federal law that requires that the coverage of treatment for substance-
use disorders (SUDS) and mental health ailments be in parity with
medical and surgical benefits offered by the insurer.
The MHPAEA addresses network adequacy by prohibiting covered group
health plans from imposing treatment limitations on mental health and
substance use disorder benefits that are more restrictive than the
treatment limitations they apply to medical/ surgical benefits. The
essential health benefit regulations under the ACA extend MHPAEA's
requirements to small and individual plans. Under New York's mental
health parity law (originally enacted as "Timothy's Law"), which incor-
porates the requirements of MHPAEA, "treatment limitations" include
nonquantitative treatment limitations (NQTLs). Federal regulations
define NQTLs as treatment limitations "which otherwise limit the scope
or duration of benefits for treatment under a plan or coverage," and
provide an illustrative list. Federal MHPAEA guidance states that "plan
standards" such as "network adequacy" are NQTLs. For example, if a
health plan takes steps to ensure it has an adequate number of in-net-
work medical/surgical providers, the plan must take comparable steps to
ensure an adequate number of in-network mental health and substance use
disorder providers. However, a recent report to Congress shows that
companies continue to violate these requirements.
The Senate Health, Education, Labor and Pensions Committee and the House
Ways and Means Committee held hearings examining a report which was
generated by the departments of Labor, Treasury and Health and Human
Services. "This report underscores two simple facts: insurers will not
change their behaviors without increased enforcement and accountability,
and patients will continue to suffer until that happens," AMA Executive
Vice President and CEO James L. Madara, MD, wrote in a letter to leaders
of the committees.
Data from the Centers for Disease Control and Prevention indicate that
between August 2020 and February 2021, the percentage of adults exhibit-
ing symptoms of an anxiety or a depressive disorder increased signif-
icantly, from 36.4 percent to 41.5 percent. Similarly, substance use
disorder and subsequent overdoses has become an epidemic. Since 2015,
overdose death numbers have risen, reaching a historic high of 70,630
deaths in 2019, and surging to an estimated 100,306 drug overdose deaths
in the United States during the 12-month period ending in April 2021.
Covid-19 and its effects on mental health and substance use disorders
has only increased these numbers.
In 2018, NYS instituted The Mental Health and Substance Use Disorder
Parity Report Act requiring insurers to implement formal parity compli-
ance plans along with regular reporting to the state. The Insurance Law
y 343 requires insurers to submit a biennial Mental Health and Substance
Use Disorder Parity Report to the Department of Financial Services to
help measure compliance with federal and state parity laws for mental
health and substance use disorder treatment. In 2020 and 2022 the
Office-of Financial Services published on their website, these reports
submitted by insurers, and although there were reports showing non-com-
pliance by certain insurers nothing was done about it.
Further, in September 2020, the New York State Department of Financial
Services finalized new regulations that set forth a detailed set of
specifications requiring insurers to monitor, detect, as well as remedi-
ate or develop a remediation plan for any improper practices. The new
regulation also places responsibility on insurers to coordinate compli-
ance monitoring activities. All insurers must certify compliance with
the new requirements on an annual basis. While this does bring to task
the insurance company's responsibility to show compliance with parity
laws it is not enough.
This bill will expand the insurance law to require the Superintendent of
Financial Services (DFS) to audit all reports from insurance companies
to ensure such insurers are in full compliance with federal and state
mental health and substance use disorder parity requirements, and more
importantly to investigate all credible allegations of insurer impro-
prieties and noncompliance of parity laws and regulations and submit
these findings to the Attorney General's office. These additions will
add teeth to the existing laws and will help to further ensure compli-
ance with parity regulations.
PRIOR LEGISLATIVE HISTORY:
2023-24: A.09683
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
5746
2025-2026 Regular Sessions
IN ASSEMBLY
February 20, 2025
___________
Introduced by M. of A. K. BROWN -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the insurance law, in relation to requiring the super-
intendent of financial services to audit certain reports submitted by
insurers to ensure such insurers are in full compliance with federal
and state mental health and substance use disorder parity requirements
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subsection (a) of section 343 of the insurance law, as
2 added by chapter 207 of the laws of 2019, is amended to read as follows:
3 (a) (i) Beginning July first, two thousand nineteen and every two
4 years thereafter, each insurer providing managed care products, individ-
5 ual comprehensive accident and health insurance or group or blanket
6 comprehensive accident and health insurance, each corporation organized
7 pursuant to article forty-three of this chapter providing comprehensive
8 health insurance and each entity licensed pursuant to article forty-four
9 of the public health law providing comprehensive health service plans
10 shall submit to the superintendent, in a form and manner prescribed by
11 the superintendent, a report detailing the entity's compliance with
12 federal and state mental health and substance use disorder parity laws
13 based on the entity's record during the preceding two calendar years.
14 The superintendent shall publish on the department's website on or
15 before October first, two thousand nineteen, and every two years there-
16 after, the reports submitted pursuant to this section.
17 (ii) The superintendent shall audit each report submitted pursuant to
18 this section. Such audit shall include, but not be limited to, an exam-
19 ination of each such report submitted by the insurer for the purpose of
20 determining if such insurer is in full compliance with federal and state
21 mental health and substance use disorder parity requirements. In addi-
22 tion, the superintendent shall investigate all credible allegations of
23 insurer improprieties and noncompliance. Where the superintendent makes
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09643-01-5
A. 5746 2
1 a determination that an insurer has willfully violated federal or state
2 mental health and substance use disorder parity requirements, the super-
3 intendent shall provide such findings, including the reason or reasons
4 for making such determination, to the office of the attorney general.
5 The attorney general shall consider the superintendent's findings and,
6 upon agreement with the superintendent's determination, shall commence
7 an action in the name of the people of the state to enforce an insurer's
8 required compliance with federal and state mental health and substance
9 use disorder parity requirements.
10 § 2. This act shall take effect immediately.
