If you buy health insurance on the individual market, without help from an employer, you may want to know what New York is doing to protect you from unfair and unnecessary premium rate increases.  Here’s a summary of the New York laws that govern rate increases.

  • New York requires health insurers to obtain state approval of rate increases before they go into effect.
  • Premiums cannot be “unreasonable, excessive, inadequate, or unfairly discriminatory.”  The Superintendent of Insurance may consider the financial condition of the insurer or HMO when considering a rate adjustment.  NY CLS Ins. §3231 (governing commercial insurers), NY CLS Ins. §4308 (governing nonprofit insurers and HMOs).  The Superintendent may also reject rate increases for nonprofit insurers and HMOs if salary increases for their senior level executives are excessive or unwarranted.  NY CLS Ins. §4308.
  • Although loss ratios must generally be at least 82%, the Superintendent may modify minimum loss ratios when reviewing a rate filing if a modification is “in the interests of the people of . . . [the] state,” or “if a modification is necessary to maintain insurer solvency.”  If an expected loss ratio is not met, the Superintendent may reduce future premiums and/or order a refund to policyholders.  NY CLS Ins. §3231 (governing commercial insurers), NY CLS Ins. §4308 (governing nonprofit insurers and HMOs).
  • On or before the rate request is filed with the Superintendent of Insurance, the insurer or HMO must send written notice of the rate adjustment to each subscriber.  The notice must include the information necessary for the subscriber to submit written comments within 30 days to the Insurance Department, or to receive additional information, on the rate filing.  The Superintendent of Insurance is required by law to post all relevant written comments on the Department’s website.  NY CLS Ins. §3231 (governing commercial insurers), NY CLS Ins. §4308 (governing nonprofit insurers and HMOs).
  • The decision of the Superintendent must be rendered 30-60 days after the rate adjustment request is filed.  The request is deemed approved if a decision is not made within the time allotted under the statute.  If more information is requested by the Superintendent, the sixty days shall be tolled until the insurer or HMO submits the additional information.  The Superintendent may extend the sixty-day period an additional 20 days if the request for additional information is made less than ten days before the expiration of the sixty-day period.  NY CLS Ins. §3231 (governing commercial insurers), NY CLS Ins. §4308 (governing nonprofit insurers and HMOs).