N.Y. Labor Law § 217: Employee notification and remittance of premiums; group policies of accident and health insurance

§ 217. Employee notification and remittance of premiums; group

policies of accident and health insurance. 1. Statement of public

policy. The legislature finds that in today's society health and

accident insurance coverage for medical care and treatment is of prime

importance to all employees and their dependents within the state of New

York. Adequate and prospective planning is necessary to insure that such

coverage is in effect at the time of commencement of the need for

medical and health care. Many employees and their dependents in New York

State are covered through group policies issued to their employers,

employee organizations or trustees of employee welfare funds and no

statutory provision has heretofore afforded these employees and their

dependents the right as certificate holders of a group accident or group

health policy to receive notification of the intended termination or

substitution of the group policy and to have premiums remitted to

insurers on their behalf should they choose to exercise continuation

privileges available under law.

Accordingly, it is the declared public policy of the state of New York

that sufficient and timely notice be afforded each employee covered

under a group accident or group health policy of the intended

termination or substitution of such policy and that employers be

required to remit premiums to insurers on behalf of individuals

exercising their right to continuation coverage under the law.

2. Definitions. As used in this section:

(a) "Policyholder" shall mean any person, co-partnership, corporation,

trade association, joint stock association, incorporated or

unincorporated association, trustees or labor organization as defined in

subsections (c) and (g), respectively, of section four thousand four

hundred two of the insurance law or any other entity to whom a policy or

contract of group accident, group health or group accident and health

insurance has been issued.

For the purpose of this section, "policyholder" shall also include any

group remitting agent.

(b) "Certificate holder" shall mean any person insured, on either a

contributory or non-contributory basis, by a policy or contract of group

accident, group health or group accident and health insurance, as well

as persons covered by group remittance policies.

3. Notification. A policyholder shall, subsequent to receipt from the

insurer of notice of termination pursuant to subsection (k) of section

four thousand two hundred thirty-five of the insurance law provide

written notice to the certificate holders of such policy of such

termination. In any case where the policyholder is substituting such

policy with another policy providing similar coverage for the same

certificate holders, the policyholder shall provide certificate holders

with a written notice including therein the name of the substituted

insurer. Where the employees are represented by a labor organization,

such notice shall be given to the representative of that labor

organization. Such written notice shall be in accordance with the rules

and regulations of the superintendent of financial services, promulgated

pursuant to subsection (l) of section four thousand two hundred

thirty-five of the insurance law.

4. Exception. The provisions of subdivision three of this section

shall not be deemed to apply if, within ten days subsequent to receipt

of notice of termination from the insurer, the policyholder has taken

necessary steps whereby the intended termination is rendered null and

void.

5. Where the policyholder has contracted with another insurer to

replace the existing insurer for the providing of similar and continuous

coverage for the same certificate holders he shall file an affidavit

with the commissioner of labor and superintendent of financial services

to that effect.

6. Remittance of premiums. Any policyholder who receives notification

from an individual entitled to exercise a right to continuation of

coverage by the policyholder's insurer pursuant to section three

thousand two hundred twenty-one of the insurance law, shall, no later

than thirty days subsequent to receipt of premiums from such individual,

remit such premiums to the insurer on behalf of such individual and

provide evidence to the individual that the premium has been remitted.

6-a. Residence location to accompany enrollment data. When a

policyholder provides information to an insurer or health maintenance

organization certified under article forty-four of the public health law

or licensed pursuant to the insurance law regarding the initial or

continued enrollment eligibility of a certificate holder, the policy

holder must include the current united states postal service zip code

and state in which the certificate holder currently resides.

7. Penalties. (a) Any policyholder who fails to comply with this

section, shall forfeit to the people of the State a sum up to five

thousand dollars, to be recovered by the commissioner in a civil action.

Where the policyholder is a corporation, trade association, joint stock

association, incorporated or unincorporated association, the president,

secretary and treasurer thereof shall be liable for any forfeiture.

(b) In addition to such penalty, where the failure to comply involves

the failure to notify an employee of the termination of a group accident

or group health policy pursuant to subdivision three of this section or

the failure to remit premiums pursuant to subdivision six of this

section, or the failure to provide an individual with notice of

termination pursuant to subdivision six of section one hundred

ninety-five of this chapter, the policy holder shall also be liable, in

a civil action brought by the individual entitled to receive the notice

of termination or exercise the right to continuation of coverage in a

court of competent jurisdiction, to appropriate damages which shall

include reimbursement for medical expenses which were not covered by the

policyholder's insurer by virtue of his termination of the policy or

failure to remit such premiums.