BILL NUMBER: S9113
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the insurance law, in relation to participation in
assigned risk plans by voluntary foster care agencies (Part A); to amend
the social services law, in relation to requiring the office of children
and family services to establish standards of payment for liability
insurance costs that ensures the maximum state aid rate accurately
reflect the year over year increased costs for voluntary foster care
agencies (Part B); to amend the state finance law and the social
services law, in relation to establishing the voluntary foster care
agency insurance bridge fund and establishing a process for the distrib-
ution of moneys in such fund (Part C); and making an appropriation
therefor
 
PURPOSE:
To establish risk plans for voluntary foster care agencies, direct the
office of children and family services to establish standards of payment
for liability insurance, and to establish the voluntary foster care
agency insurance bridge fund.
 
SUMMARY OF PROVISIONS:
Section 1 of the Act describes the structure of the bill, establishing
three parts which have independent sections.
 
PART A
Section 1 amends the insurance law by adding a new article 35. This
amendment establishes assigned risk plans relating to voluntary foster
care agencies.
Section 2 establishes the effective date of Part A.
 
PART B
Section 1 amends section 398-a of the social services law by adding a
new subdivision 7. This amendment directs the Office of Children and
Family Services to establish standards of payment for liability insur-
ance costs that ensures the maximum state aid rate accurately reflects
the year over year increased costs for voluntary foster care agencies.
Section 2 establishes the effective date of Part B.
 
PART C
Section 1 amends the state finance law by adding a new section 97-bbbbb.
This amendment establishes the voluntary foster care agency insurance
bridge fund.
Section 2 amends the social services law by adding a new section 398-g.
This amendment establishes the process for the distribution of funds to
offset increased liability insurance costs for voluntary foster care
agencies.
Section 3 establishes the effective date of Part C.
Section 2 of the Act is the severability clause.
Section 3 of the Act appropriates a sum of twenty million dollars, or
the amount necessary, to the Office of Children and Family Services for
the purposes of this bill.
Section 4 of the Act establishes the effective date.
 
JUSTIFICATION:
New York operates a state supervised, county administered, foster care
system whereby many of the children and youth in care are placed with
private nonprofit Voluntary Foster Care Agencies (VFCAs). VFCA's are
required per their contracts with counties to carry certain levels of
general liability insurance. However, due to social inflation and
increasing pressures in the insurance market, specifically related to
foster care, agencies in NYS and nationwide are experiencing significant
challenges in accessing liability insurance coverage. There are very
few insurance providers in this sector already, and we have very recent-
ly begun to see the field get even smaller. This is becoming an increas-
ingly dire issue.
The state must intervene to ensure access to this mandated coverage.
Failure to act could lead to nonprofits being forced out of the field,
leaving government responsible for the provision of these services. We
must learn from the experience in California, where 19 foster care
service agencies now can't find coverage since the insurer of 90% of the
foster family agencies (FFAs) in the state halted renewals of coverage
for all FFAs in the state.(1) This has created a crisis in the sector in
California - confusion for foster care parents and youth- and has left
the counties struggling to either provide services directly or transfer
youth and services other organizations who were able to obtain alternate
means of insurance coverage.
There is very limited infrastructure and capacity in NY for counties to
directly provide foster care services - VFCAs currently provide more
than 75% of foster care services statewide, and 100% in New York City.
Without state action to ensure adequate coverage options, children and
youth, ultimately in the care and custody of the state, and their fami-
lies will experience significant disruptions in their care.
Additionally, the current administrative rate set by the state for
VFCA's (the Maximum State Aid Rate) must be modified to capture the full
scope of the rapidly increasing liability insurance costs and reimburse
VFCA's for related expenses in the same fiscal year as they occur. MSAR
rates currently use data from two years prior which don't capture these
increased costs when providers are experiencing them. Moreover, by
including liability insurance costs in a capped general administrative
parameter, many of our agencies are experiencing growth in costs that
are excluded from rate calculations.
Lastly, the state must provide bridge funding to support VFCA's in
addressing liability cost increases that have not yet been captured in
their rates, until changes to those calculations moving forward are in
place.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
Twenty million dollars.
 
EFFECTIVE DATE:
This act shall take effect immediately; provided, however, that the
applicable effective date of Parts A through C of this act shall be as
specifically set forth in the last section of such Parts.
1) https: //laist.com/news/education/early-childhood- education-Pre-
k/la-county-money-foster-family-agencies- stay-open-insurance-crisis

Statutes affected:
S9113: 398-a social services law