BILL NUMBER: S3814
SPONSOR: RIVERA
 
TITLE OF BILL:
An act to amend the insurance law, in relation to imposing a tax on
out-of-state transfers, dividends, payments, and loans by certain acci-
dent and health insurance companies and health maintenance organizations
 
PURPOSE:
Imposes a tax on out-of-state transfers, dividends, payments, and loans
by publicly traded accident and health insurance companies domiciled in
other states and to return such dollars to New York communities through
the Distressed Provider Assistance Account, which aids distressed hospi-
tals.
 
SUMMARY OF PROVISIONS:
Section 1 adds a new section 9112 to the Insurance Law, as it relates to
tax on out-of-state transfers, dividends, payments, and loans by acci-
dent and health insurance companies, to provide for a tax on accident
and health insurance companies equal to 9.63% of any dividends or other
funds derived from subscriber prepayments or premiums received for the
domestic insurers commercial programs in New York State that are then
transferred, distributed, or loaned to an entity in the domestic insur-
ers' holding company system that is domiciled outside of New York State,
with some exceptions. Each domestic insurer would be required to report
to the Department of Financial Services all transfers, distributions,
and loans in a form determined by the Superintendent. All revenues
collected from the tax would be deposited into the New York State Agency
Trust Fund, Distressed Provider Assistance Account.
Sections 2 and 3 of the bill amend sections 1109 and 9106 of the Insur-
ance Law to clarify that the provisions of this legislation also apply
to health maintenance organizations licensed under Article 44 of the
Public Health Law.
Section 4 provides the effective date.
 
JUSTIFICATION:
New York's health insurance marketplace has become increasingly domi-
nated by publicly traded health insurance companies domiciled outside of
the State. These companies' parent corporations, including United
Healthcare, Aetna, and Anthem (operating in New York as Empire), have
made huge profits both before and during the COVID-19 pandemic. Before
the pandemic, they did so by routinely denying payments to doctors and
hospitals for care provided to their enrollees, and then during the
pandemic because so many New Yorkers deferred health care visits and
procedures while continuing to pay premiums. The primary concern of
these companies is to provide a return for their shareholders, which is
why they engage in practices to increase their profits, such as denying
payments for care and transferring their funds to their parent companies
in Indianapolis (Anthem), Minnetonka (UnitedHealthcare), and Hartford
(Aetna).
This bill would keep a portion of these transferred premium dollars paid
by New Yorkers and their employers in New York State by taxing out-of-
state transfers by 9.63%. These dollars would be returned to medically
underserved communities by depositing any revenue collected into the
State's Distressed Provider Assistance Account, which is set aside for
investments in financially distressed hospitals. In this way, more of
New Yorkers' premium dollars would remain in New York State and
strengthen our health care system, rather than transferred to other
states to increase insurers' profits.
 
LEGISLATIVE HISTORY:
2022: S8470 Kennedy / A9519 Dilan
2023: S3122 Kennedy / A3885 Dilan
2024: S9574 Rivera / No same as
 
FISCAL IMPLICATIONS:
This proposal has the potential to provide additional revenue to New
York State.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall be deemed to have been
in full force and effect on and after April 1, 2025.

Statutes affected:
S3814: 1109 insurance law, 1109(a) insurance law, 9106 insurance law, 9106(d) insurance law