By: Philip Qualo, J.D.,

New York employers and companies with employees residing in the state may soon have to prepare for an additional leave under the state Paid Family Leave Benefits Law (“PFL”). The New York State Legislature recently passed a bill to amend the PFL to include bereavement leave. If signed into law this bill could allow employees to take up to twelve weeks of bereavement leave in a year… with pay.

The PFL, which has been in effect since January 1, 2018, currently provides for job-protected paid time off so employees can bond with newly born, adopted or fostered child children; care for a family member with a serious health condition; or assist loved ones when a family member is called to active military service abroad.

Currently, NY employees are eligible for PFL for up to eight weeks, with coverage increasing to 10 weeks in 2019 and 2020, and 12 weeks in 2021. Leave can be taken either all at once or in full-day increments. A covered employee may take the maximum time-off benefit in any given 52-week period. PFL is funded through employee payroll contributions that are set each year to match the cost of coverage.

The recently approved bill is brief and simply adds a few sentences to the PFL to cover the death of a family member, which includes a child, parent, grandparent, grandchild, spouse or domestic partner. It would allow for job-protected paid bereavement leave up to the same maximum benefit as other qualifying events under PFL, which is scheduled to reach 10 weeks at 60% of the employee’s average weekly wage, capped at 60% of NY State’s Average Weekly Wage (NYSAWW) in 2020. This leave could be taken any time within the 52-week period from the death of the relative.

As with other leaves mandated under NY PFL, the bill would require employers to continue health insurance coverage for employees on paid bereavement leave as long as the employee continues to contribute to the cost of coverage as before the leave.

The bill is currently under review by Gov. Andrew Cuomo.  If signed into law, the bereavement leave amendment will not take effect until January 1, 2020.

October 21, 2014 — This is your weekly update of state legislative/regulatory developments affecting companies involved in the self-insurance/alternative risk transfer marketplace. Should you have any questions on information provided in these reports and/or would like to alert SIIA to new state legislative/regulatory activity (health care, workers’ compensation and/or captive insurance matters) we may have missed, please contact Adam Brackemyre, Director of State Government Relations directly at 202/463-8161, or via e-mail at abrackemyre@siia.org.


Colorado- Exchange Assessment Regulations Published
At long last, the Colorado Division of Insurance has published draft regulations addressing outstanding questions about the Colorado exchange’s assessment. The regulations can be viewed here. The link should open the rules in a Word document.

A hearing on the proposed rules has been schedule on November 5th. SIIA will be reviewing the proposed rules to see if it needs to submit comments or questions by this date.

If you have any questions or would like the proposed rule emailed to you, please contact Adam Brackemyre, SIIA’s Director of State Government Relations at abrackemyre@siia.org.

DC- Stop-Loss Legislation
On Friday, October 10th, the Business, Consumer and Regulatory Affairs (BCRA) Committee passed the DC stop loss language contained in B20-0797 to the full DC Council without any changes.

As previously reported, SIIA and other stakeholders testified at a public hearing and met with Department of Insurance Securities and Banking (DISB) staff responsible for writing the legislation and submitted amended language and justifications for those amendments, per DISB staff request. SIIA also worked with other industry lobbyists to request that members of the BCRA committee introduce the amendments, too.

There are still opportunities to seek amendments from the full DC Council. SIIA will continue to work with stakeholders to improve the legislation, which contains a minimum $40,000 individual attachment point and effective prohibition on employers of 50 and fewer from purchasing stop loss.

Illinois- Legislation Repealing Captive Tax Increase Introduced
Since the last SIIA state update, House Bill (HB) 6302, legislation repealing the recent Illinois captive tax increase, has been introduced.

There are two short legislative periods between now and the end of the year and nobody really knows how much will be accomplished because, as one Illinois insider told SIIA, legislative matters are taking a back seat to the close gubernatorial race.

Viewing this realistically, the best chance of repealing the tax will rest with a new legislature and new governor. There are two major barriers for HB 6302 in the lame duck period. First, the legislation is co-sponsored by members of the minority political party. Second, if HB 6302 were to be passed during the lame duck session, the governor would probably veto it, as he recently referred to the tax increase as “closing a loophole” during a recent debate.

In the meantime, SIIA will continue to work with the business community, support the repeal efforts and prepare to work with elected leaders next year who may be more favorable to the business community.

New York State- Advocacy Day in Albany
SIIA has tentatively planned an advocacy day in Albany next February in support of legislation that would protect small business access to stop loss insurance.

While SIIA has professional lobbyist resources in place, we need SIIA members who are New York State residents and business owners to attend. You are the best messenger to discuss how your clients, the legislators’ constituents, would be impacted if businesses with 51-100 covered lives would lose access their current health plan. If you could take one day to travel to Albany and educate legislators, it would be an invaluable service to your clients and your industry.

More information will be coming as the event details are finalized.

McGivney & Kluger, P.C.

On November 13, 2013, the Governor of New York signed legislation which clarifies the scope of General Obligations Law (“GOL”) Section 5-335. As a result of this amendment, ERISA plans are prohibited from asserting liens against settlement proceeds in personal injury, medical malpractice and wrongful death actions.

This legislation was motivated by the legislature’s finding that the “settlement of certain types of claims have been impeded as a result of health insurers’ attempts to intervene into pending litigation, as well as similar attempts to institute subrogation and reimbursement actions against litigants. As a result, settlement of claims made by accident victims and others are imperiled and prevented, thus causing undue burdens and pressures upon the court system. In addition, defendants in such actions are being subjected to claims made by health insurers, exposing them to additional liability.”

Amendments to GOL Section 5-335 previously enacted in 2009 were made for the purpose of protecting “parties to the settlement of a tort claim from certain unwarranted lien, reimbursement and subrogation claims.” However, the United States District Court for the Eastern District of New York, in Wurtz v. Rawlings Co., LLC, 2013 WL1248631 (E.D.N.Y), has held that this legislation was preempted to the extent it applies to any insured employee benefit plan covered by the Employee Retirement Income Security Act of 1974 (“ERISA”).

The November 13th amendment to GOL Section 5-335 is intended to define the purpose of the “general obligations law which is to ensure that insurers will not be able to claim or access any monies paid in settlement of a tort claim whether by way of a lien, a reimbursement claim, subrogation, or otherwise so that the burden of payment for health care services, disability payments, lost wage payments or any other benefits for the victims of torts will be borne by the insurer and not any party to a settlement of such a victim’s tort claim.This law is specifically directed toward entities engaged in providing health insurance, thus falling under the ‘savings’ clause contained in ERISA, which reserves to the states the right and the ability to regulate insurance.”

Please do not hesitate to contact Greg Gaines of McGivney & Kluger, PC at ggaines@mklaw.us.com with any questions regarding this important legislation

Article Taken From: The National Association of Subrogation Professionals AMICUS Updates

As you may recall, New York introduced a bill which would close perceived loopholes which allowed a fully insured ERISA plan to pursue subrogation or reimbursement. New York General Obligations 5-535 prohibits a health carrier from pursuing a subrogation or reimbursement claim that is not protected by ERISA preemption. One federal court in the case of Wurtz v. Rawlings, 2013 WL1248631 (E.D.N.Y.), recently held an insured ERISA plan was protected by preemption and the carrier was able to pursue subrogation and reimbursement claims. TheWurtz court found the NY statute was not “saved” from preemption as the regulation of insurance. The case is currently on appeal and the National Association of Subrogation Professionals (NASP) has been requested to write an Amicus Brief.

In response to this decision, Assembly Bill 7828 was introduced to clarify that health insurers and fully insured ERISA plans fall under NY General Obligation 5-535.Bill 7828 specifically claims that 5-535 is directed to the health insurance industry necessary to qualify under ERISA’s savings clause.This means NY General Obligation 5-535 would apply to fully insured ERISA plans as it involves a state’s right and ability to regulate insurance. Essentially, the bill seeks to reverse the Wurtz decision and barring fully insured ERISA plan’s right to subrogation or reimbursement. This bill further clarifies that the anti-subrogation law applies to not only claims in suit, but pre-suit claims.

Last minute amendments to the bill appear to protect personal injury protection (PIP) subrogation rights. However, short term disability carriers and municipalities did not fare as well and certain subrogation rights of theirs may be in jeopardy. The bill is headed to the Governor’s desk for his signature and seems a foregone conclusion that the bill will be signed.

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