The Business Council strongly opposes this bill, which would impose a fifty-percent franchise tax on business-owned life insurance benefits.

Many businesses purchase what is commonly known as corporate owned life insurance (COLI) on their most highly compensated employees for a variety of reasons. The purpose of COLI is to protect businesses from the loss of an owner or key employee whose talents are essential to the success of the company. The benefits from the life insurance policy assist the business to meet its future obligations including retirees’ health care benefits, retirement plans and other costs.

To read the bill memo click here.

Colleen C. DiPirro, president and CEO if the Amherst Chamber of Commerce provides the following op-ed in opposition to “prior approval” in the Buffalo News.

“Gov. David A. Paterson would like to dust off and reinstate “prior approval,” a long-abandoned law that would give his superintendent of insurance control over health insurance rate increases. When prior approval was in place, insurers needed the State Insurance Department’s authorization before instituting price increases. Insurers were called to appear at public hearings where they’d present data to support their proposed new premiums.

The Amherst Chamber of Commerce opposes the governor’s plan. We remember the negative impact prior approval had on business owners.

Prior approval hearings were always political. In election years, the department would keep premium increases minimal despite being presented data on the rising cost and increased usage of health care goods and services. The following year, the department would be forced to deal with the consequences of its artificially suppressed rates by approving drastic increases to cover the insurer’s needs for the coming year and shortfall from the current year.”

To read more click here.

In an op-ed in the Democrat and Chronicle, Albert P. Hooke, a retired banking executive and past board chairman for BlueCross BlueShield writes about his concerns for enacting “Prior approval” in New York.

“I must take issue with Assemblyman Joe Morelle’s Feb. 7 Speaking Out essay calling for New York state to reinstate “prior approval” on health insurance premiums.

As a former Rochester businessman, I was privileged to serve as chairman of the local BlueCross BlueShield board of directors in the late 1980s. I saw firsthand the disastrous effects that prior approval had for our health plan, as well as for the employers and families that carried our coverage…

By denying needed increases, the state forced the health plan to incur multimillion-dollar losses that brought its financial reserves to a level that violated the state’s own rules. The state’s actions put the health plan into a financially impaired position. To remain solvent, BlueCross BlueShield was forced to increase premiums in 1988 and 1989 by nearly 40 percent to both replenish its lost reserves and to cover year-to-year cost increases.

That’s the problem with government price controls. Setting health insurance prices artificially low, without addressing the root causes for the increasing costs, does not make premiums more affordable. It only postpones and compounds the price increases that will be required in later years to cover ever-increasing claims expenses.”

To read the entire op-ed click here.

In mid-December, the U.S. Senate and House passed and the President signed the Fiscal Year 2010 Department of Defense Appropriations Act. The provisions included an expansion and extension of the COBRA subsidy program that was enacted under the president’s original stimulus program, the American Recovery and Reinvestment Act (ARRA).

You’ll recall that these obligations in early 2009 required employers or others who administer insurance plans to temporarily subsidize 65 percent of the COBRA insurance premiums for any employee and qualified family members continuing their coverage through the federal COBRA or NYS continuation programs (mini-COBRA). It applied to employees who involuntarily lost their jobs from September 1, 2008 to December 31, 2009. The subsidy arrangement began on March 1, 2009 and lasted a maximum of nine months. Employers or others administering the COBRA or continuation plan were then able to recover the premium subsidy paid by claiming a credit on the future payroll taxes paid through submission of the IRS Form 941 which had been modified by the IRS for this purpose.

The program has now been expanded from the original nine (9) months to fifteen (15) months. So, if you have anyone who completed their 9 months of subsidy, make arrangements to offer it for an additional 6 months. Since the program began March 1, 2009, the original 9 months expired on November 30, 2009. With the expansion, those folks whose subsidy ended in November or later have an opportunity to continue for another 6 months.

Eligibility for the subsidy has also been extended from the original expiration date of December 31, 2009 to February 28, 2010. So, any employees who involuntarily lost their jobs in January or February 2010 will have an opportunity to receive the subsidy and for an expanded time period of 15 months as described above.

Check you records, change your notices, communicate with your employees and call me on The Business Council’s HR Line at 800-332-2117 if I can be of assistance.

Senate Insurance Committee Chairman Neil D. Breslin is the guest speaker at The Business Council Financial Services Committee meeting on Tuesday, January 19, 2010 at 4:30 pm at the Crowne Plaza, Albany, NY. The Financial Services Committee meeting coincides with The Business Council Issues Expo (formerly Annual Reception).

The Business Council’s Financial Services Committee is comprised of over 150 companies. The topics to be discussed are the 2010-11 State Budget, key issues of the Senate Insurance Committee, medical malpractice insurance reform, credit default swaps and other issues.

Senator Neil Breslin is currently serving his seventh term as New York State Senator. He represents the 46th District, which consists entirely of Albany County. Senator Breslin serves on the Agriculture, Banks, Codes, Education, Finance, Judiciary and Labor Committees. Senator Breslin also serves as a member of the Executive Committee and is the former Chair of the State/Federal Relations Committee of the National Conference of Insurance Legislators (NCOIL).

To register for this event, please click here. For information or questions, please call Walter Pacholczak at 518/465-7511 x219 or email walter.pacholczak@bcnys.org.

As we headed into the new year, some important changes in the state’s 36 month insurance continuation mandate occurred that were not well advertised and escaped our notice. Let’s review these important fringe benefit changes.

On July 28, 2009, Governor Paterson signed into law an 18 month extension of the existing 18 month COBRA and mini-COBRA medical insurance continuation to a total of 36 months. Although effective on July 1, 2009, it was not supposed to affect employers’ medical insurance programs until the insurance contract’s next renewal, modification, change or amendment. For many of us, that was January 1, 2010 or later. For employees on COBRA or mini-COBRA at that time, if their 18 months of coverage ended after July 1^st but earlier than our next group insurance contract renewal, the employee or qualified member did not get the new 18 month extension. This has changed.

On November 11, 2009, the Governor’s office proposed a change to the July legislation citing the need for the 18 month extension to cover more people, and because of the high cost of health insurance coverage outside of an employer group. The bill passed the Senate and Assembly on November 16^th and was signed by the Governor on November 19^th. It was effective on November 19, 2009. On December 23^rd, the first information about these changes appeared on the New York State Insurance Department’s website. It applies to those employees or participants whose COBRA or mini-COBRA coverage expired between July 1, 2009 and your next group health insurance contract or policy renewal. Here’s what the changes look like.

First, the new law applies to all group health insurance contracts and policies effective November 1, 2009. So, instead of the 36 month extension mandate starting at your next renewal after July 1, 2009 (the July law), it now applies to all contracts or policies, regardless of renewal date, on November 1, 2009. The practical implication is that if you had COBRA or mini-COBRA participants’ coverage expire in November or December, prior to your contract or policy renewal, you need to now continue their coverage for the additional 18 months for a total of 36 months. So, contact those former COBRA or mini-COBRA participants, inform them of the additional 18 months available and continue the coverage if requested.

Second, another section of the new law applies to those COBRA and mini-COBRA participants whose coverage expired between July 1, 2009 and November 1, 2009 and prior to the contract or policy expiration. For them, you and your carrier must create a special enrollment period to allow these participants to extend their COBRA or mini-COBRA coverage for an additional 18 months up to a total of 36 months. This special enrollment period is 60 days following the former participant’s receipt of information from the carrier (or you) about this new special enrollment period. For those whose initial COBRA or mini-COBRA coverage expired in July, August, September or October, there will be a gap between that initial expiration of coverage and continuation of coverage as a result of the special enrollment period. You don’t have to fill that gap and the former.

The following is part of an op-ed by Tyler Cowen, a professor of economics at George Mason University that appeared in last weeks New York Times.

“Americans seem to like the idea of broadening health insurance coverage, but they may not want to be forced to buy it. With health care costs high and rising, such government mandates would make many people worse off.

The proposals now before Congress would require just about everyone to buy health insurance or to get it through their employers — which would generally result in lower wages. In other words, millions of people would be compelled to spend lots of money on something they previously did not want, at least not at prevailing prices.

Estimates of this burden vary, but for a family of four it could range up to $14,000 a year over the next decade, according to the Congressional Budget Office. Right now, many Americans take the gamble of going without insurance, just as many of us take our chances with how much we drive or how little we exercise.”

To read the rest of the op-ed click here.

On Thursday, October 29, 2009 - 12:00 p.m. New York State Department of Insurance will meet with Business Council members at 25 Beaver Street – Conference Room 3100

Please join members of The Business Council Financial Services Committee for a special meeting with NYS Insurance Department Superintendent James Wrynn on Thursday, October 29, 2009 at 12:00 pm at 25 Beaver Street – Conference Room 3100 – New York, NY.

The Business Council has a vested interest in fostering the growth of the life, health and property/casualty insurance industry in New York State. The Council is actively engaged in medical malpractice insurance reform, state regulation of credit default swaps, regulation of the life insurance settlement business, producer compensation and other issues of importance to the financial services industry.

For security purposes all participants must register and bring photo identification for the meeting.

In a memo redistributed to the Senate and key legislative staff, The Business Council is pushing for the passage of (S.3655-A Breslin/A.7131-A Morelle) at the scheduled September 10th session. The bill provides a comprehensive regulatory framework for the life settlement business including: licensure, disclosure reports, clear compensation guidelines, educational requirements, examinations, defines comprehensive consumer protections and prohibits STOLI transactions for a person with no insurable interest.

Without a confirmed active list of bills, The Council will lobby Senators and key staff on Wednesday and Thursday. Please be advised that according to the NY Daily News, Senator Brian Foley (D-3rd S.D.) will not attend session due to the passing away of his father.

A.7131-A (Morelle) / S.3655-A (Breslin), Support, Regulation of Life Settlement Business

Common Good Chairman Philip K. Howard points out in an op-ed in The Wall Street Journal that health care reform is impossible without lawsuit reform.

The Business Council supports lawsuit reform on both the state and federal level to lower health care, insurance and other costs. The Business Council is a member of NYTortReformNow.org.

Howard writes: “Containing health-care costs is impossible under the current legal structure. That fact has to be addressed if President Barack Obama is to create an affordable health-care system that is accessible to everyone. Every incentive in the system now is to do more — that’s how doctors get paid and that’s how doctors get protected from lawsuits. Billions of dollars are wasted in “defensive medicine.”

Read the full op-ed.