Prohibits insurers from reducing disability benefits due to the actual or anticipated receipt of social security disability benefits unless certain conditions are met.
Summary
S05318 would amend New York’s insurance law to restrict when an insurer may offset or reduce disability benefits because an insured person actually receives, or is expected to receive, Social Security Disability Insurance (SSDI). The bill applies to accident and health insurance policies that provide disability coverage and adds the same rule to two insurance law provisions covering different policy types.
Under the bill, an insurer could only reduce disability benefits for SSDI if it has a reasonable, good-faith belief that the insured is entitled to SSDI and can reasonably estimate the amount, notifies the insured that they may qualify and should pursue any required administrative appeals, and makes a good-faith effort to help the insured apply. Even then, the offset is permitted only if the insured fails to apply for or diligently pursue those benefits during the application or appeals process. The bill takes effect immediately.
Impact
The bill would change the rules governing disability insurance offsets in New York by limiting insurers’ ability to reduce benefits based on SSDI receipt or anticipated receipt. It would add new consumer-protection conditions to Insurance Law sections 3216 and 3221, affecting policies of accident and health insurance that include disability coverage and potentially increasing benefit payments to some policyholders who would otherwise see reductions.
Sentiment
The available bill materials suggest a generally supportive consumer-protection approach, with the measure framed as preventing premature or unsupported reductions in disability benefits. There is no recorded committee debate or vote history in the provided materials, so no formal opposition or support can be identified from transcripts or roll calls. The caption and text indicate the bill is intended to protect insured individuals while still allowing offsets in limited circumstances.
Contention
The main point of potential contention is the balance between protecting disabled policyholders and preserving insurers’ ability to coordinate benefits with SSDI. Insurers may object to the added obligations to notify, assist, and document a good-faith basis before reducing benefits, while supporters would likely argue these requirements prevent unfair offsets and ensure claimants are not penalized before they have a fair chance to obtain federal disability benefits. Because no transcripts or votes are provided, specific lawmakers or stakeholder groups are not identified in the record supplied.
Same As
Prohibits insurers from reducing disability benefits due to the actual or anticipated receipt of social security disability benefits unless certain conditions are met.
Prohibits insurers from reducing disability benefits due to the actual or anticipated receipt of social security disability benefits unless certain conditions are met.