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New York State Issues HIV Medication and Short-Term Health Insurance Warnings

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The New York State Department of Financial Services has issued a circular letter warning life, disability and long-term care insurers against discriminating when underwriting policies for New Yorkers who use HIV-prevention medications.

The department also issued a letter warning health insurers that certain short-term health insurance plans envisioned by the Trump administration in a proposed federal rule are illegal in New York state.

(Related: 7 Facts About the New Short-Term Health Draft Regulations)

Following a probe of reports that some insurers may have been denying applications for policies to individuals who were taking PrEP prophylaxis medication to help prevent infection with the virus that causes AIDS, Superintendent Maria Vullo on Friday issued a letter to all insurers underwriting life, disability and long-term care policies in New York warning that “the department concludes that adverse underwriting decisions based solely on an applicant’s use of PrEP are inconsistent with the Insurance Law” prohibiting unfair discrimination.

“Issuers may underwrite for increased health risk if based on sound actuarial principles or if related to actual or reasonably anticipated experience. However, practices that rely solely on the use of PrEP to identify and underwrite a higher risk of HIV infection are contrary to the Insurance Law,” the letter stated.

The Life Insurance Council of New York Inc., an industry group, said Friday, “New York’s life insurance companies provide millions of people with the financial protection they need to protect their families. Our industry is highly regulated by the state and our companies work very hard to comply with all state laws and regulations. New York has a robust life insurance market that provides consumers, including those living with HIV, with life insurance products. Each company makes its own individual underwriting decisions and that allows consumers to find policies that meet their needs,” in an emailed statement to the New York Law Journal.

On Thursday, the department also released a circular letter reminding health insurers in the state that “short-term, limited duration health insurance plans are prohibited in New York state regardless of potential regulatory changes.”

The DFS issued the notice in response to a proposed rule published by the federal Departments of Health and Human Services, Treasury and Labor earlier this year that would allow expanded offerings of short-term, limited-duration health plans for terms of up to 364 days, relaxing restrictions in federal law enacted by the Obama administration.

Vullo, in a statement, called the plans an “end run around the Affordable Care Act,” that would “entice people to buy junk insurance.” Vullo reminded insurers operating in the state that such plans would remain illegal in New York, and that under state law they must continue to follow guaranteed renewal requirements, except for nonpayment of premiums by a policyholder or withdrawal of the insurer from the state’s marketplace.

A trade group representing 28 managed care health plans, the New York Health Plan Association, issued a statement by CEO and president Eric Linzer Friday saying, “We had urged the Department of Financial Services to reiterate the state’s existing policies so that there would be clear guidance for the marketplace and that New Yorkers would be protected” and “we remain committed to working closely with DFS to ensure the continued stability of our individual and small group markets in order to preserve the achievements made to date in reducing the number of uninsured New Yorkers and continuing to work toward the goal of universal coverage.”

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