Add §664, amd §612, Tax L; amd §§206 & 268-c, add Art 48-A §§4850 - 4856, Pub Health L; add §3221-a, rpld
§213, Ins L; add §52-a, Leg L
Provides expanded enrollment through New York state of health through tax returns (Part A); allows for enrollment through the New York state of health at any time for first-time enrollees; expands New York state of health navigator program (Part B); creates the New York health benefit and cost commission (Part C); establishes New York health care savings accounts to expand and incentivize purchasing private health insurance (Part D).
STATE OF NEW YORK
________________________________________________________________________
4545
2025-2026 Regular Sessions
IN ASSEMBLY
February 4, 2025
___________
Introduced by M. of A. JENSEN -- read once and referred to the Committee
on Health
AN ACT to amend the tax law and the public health law, in relation to
providing expanded enrollment through New York state of health through
tax returns (Part A); to amend the public health law, in relation to
allowing for enrollment through the New York state of health at any
time for first-time enrollees (Part B); to amend the insurance law and
the legislative law, in relation to creating the New York health bene-
fit and cost commission; and to repeal section 213 of the insurance
law relating thereto (Part C); and to amend the public health law and
the tax law, in relation to establishing New York health care savings
accounts to expand and incentivize purchasing private health insurance
(Part D)
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "real choice health act".
3 § 2. Legislative intent. The Legislature recognizes the importance of
4 ensuring a robust and responsive healthcare system that meets the needs
5 and preferences of its residents. Although significant improvements have
6 been made to reduce the number of uninsured New Yorkers and control
7 costs, there is still substantial work to be done. However, despite the
8 need to ensure that more New Yorkers are insured and can afford their
9 healthcare costs, preserving individual choices in healthcare is para-
10 mount. Although some argue that a single-payer system in the State of
11 New York would improve access and reduce costs, doing so would eliminate
12 important healthcare choices for many New Yorkers by creating blanket
13 State coverage, require significant tax increases on individuals and
14 businesses in New York, which would further perpetuate our outmigration
15 problem, create potential domestic migration of individuals with costly
16 adverse health issues, eliminate jobs by dismantling the health insur-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08297-01-5
A. 4545 2
1 ance industry and lead to voluntary unemployment without the need for
2 employer-based coverage and require continued and expanded reliance on
3 the Federal government for funding and waivers. The single-payer system
4 would place the responsibility of healthcare for all New Yorkers solely
5 in the hands of the State, exposing healthcare needs to even more poli-
6 tical pressures. New York State government has proven that it has diffi-
7 culty administrating large programs effectively and without mismanage-
8 ment, with both the existing Medicaid program and the roll-out of legal
9 recreational cannabis serving as important examples.
10 Moving forward, New York should continue to improve on the positive
11 changes in the current system that have been made thus far. Doing so
12 would continue to enable a competitive healthcare system that encourages
13 innovation and drives continuous improvements in care, ensuring access
14 to cutting-edge treatments and technologies for all residents. This
15 system would ensure that the opinions and preferences of the population
16 would continue to shape the healthcare system.
17 Therefore, this proposal focuses on preserving individual choices by
18 improving access to health insurance enrollment through expanded enroll-
19 ment period and enhanced outreach, creating a State process for analyz-
20 ing costs before significant health insurance changes are made, and
21 incentivizing individuals to purchase health insurance and reduce out-
22 of-pocket costs by creating a New York health care savings account.
23 § 3. This act enacts into law major components of legislation provid-
24 ing expanded enrollment through New York state of health through tax
25 returns, allowing for enrollment through the New York state of health at
26 any time for first-time enrollees, expanding New York state of health
27 navigator program, creating the New York health benefit and cost commis-
28 sion, and establishing New York health care savings accounts to expand
29 and incentivize purchasing private health insurance. Each component is
30 wholly contained within a Part identified as Parts A through D. The
31 effective date for each particular provision contained within such Part
32 is set forth in the last section of such Part. Any provision in any
33 section contained within a Part, including the effective date of the
34 Part, which makes reference to a section "of this act," when used in
35 connection with that particular component, shall be deemed to mean and
36 refer to the corresponding section of the Part in which it is found.
37 PART A
38 Section 1. The tax law is amended by adding a new section 664 to read
39 as follows:
40 § 664. Health marketplace eligibility. The commissioner shall require
41 that all income tax returns allow the taxpayer to request, by checking a
42 box, to be included on the return, that the department of health review
43 relevant and necessary taxpayer data in order to provide the taxpayer
44 with information related to their eligibility for health marketplace
45 programs, plans, and available incentives. Adjacent to such box, there
46 shall be a statement in prominent type, "IF YOU CHECK THIS BOX, YOU
47 AFFIRM THAT YOU ARE UNINSURED, DO NOT HAVE EMPLOYER-SPONSORED COVERAGE
48 AVAILABLE, AND ARE (1) REQUESTING THAT THE STATE DEPARTMENT OF HEALTH
49 REVIEW NECESSARY PORTIONS OF YOUR TAX FILING, (2) USE SUCH DATA AS
50 NECESSARY TO MAKE DETERMINATIONS AS TO YOUR ELIGIBILITY FOR MEDICAL
51 ASSISTANCE (MEDICAID), THE BASIC HEALTH PLAN (ESSENTIAL PLAN), OR PLANS
52 THROUGH THE NY STATE OF HEALTH AND AVAILABLE INCENTIVES, AND (3) CONTACT
53 YOU TO PROVIDE SUCH ELIGIBILITY INFORMATION."
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1 § 2. Section 206 of the public health law is amended by adding a new
2 subdivision 32 to read as follows:
3 32. The commissioner shall create a program within the department to
4 assist uninsured individuals without employer-sponsored coverage with
5 enrolling in health insurance coverage through state income tax filings.
6 This program shall:
7 (a) review relevant and necessary taxpayer data authorized under the
8 tax law within thirty days of receiving such authorization;
9 (b) contact individuals who opt to have their tax filings reviewed
10 within thirty days of such review;
11 (c) determine whether an individual is eligible for medical assist-
12 ance, child health insurance plan, or basic health plan coverage;
13 (d) upon determining an individual is eligible for medical assistance,
14 child health insurance plan, or basic health plan coverage, offer such
15 individuals an invitation to select a plan, provided that the individual
16 does not have employer-sponsored coverage available; and
17 (e) in the case of individuals ineligible for medical assistance,
18 child health insurance plan, or basic health plan coverage, provide a
19 referral to a navigator certified under subdivision fifteen of section
20 two hundred sixty-eight-c of this chapter.
21 § 3. This act shall take effect on the first of January next succeed-
22 ing the date on which it shall have become a law.
23 PART B
24 Section 1. Subdivisions 5 and 15 of section 268-c of the public health
25 law, as added by section 2 of part T of chapter 57 of the laws of 2019,
26 are amended to read as follows:
27 5. Maintain enrollment periods in the best interest of qualified indi-
28 viduals consistent with federal and state law. Such periods shall
29 include, but may not be limited to:
30 (a) allowing special enrollment at any time for currently uninsured
31 individuals enrolling in the Marketplace for the first time who do not
32 have employer-sponsored coverage available; and
33 (b) allowing special enrollment for uninsured individuals who do not
34 have employer-sponsored coverage available enrolling through the estab-
35 lished income tax return process.
36 15. Operate a program under which the Marketplace awards grants to
37 entities to serve as navigators in accordance with applicable federal
38 law and regulations adopted thereunder, and/or a program under which the
39 Marketplace awards grants to entities to provide community based enroll-
40 ment assistance in accordance with requirements developed by the Market-
41 place; and/or a program under which the Marketplace certifies New York
42 state licensed producers to provide assistance to eligible individuals
43 and/or small employers pursuant to federal or state law. Subject to
44 appropriation, additional grants shall be awarded on an annual basis to
45 providers in the city of New York and counties where the rate of unin-
46 sured individuals below four hundred percent of the federal poverty
47 level is above the statewide average.
48 § 2. This act shall take effect on the first of January next succeed-
49 ing the date on which it shall have become a law.
50 PART C
51 Section 1. The insurance law is amended by adding a new section 3221-a
52 to read as follows:
A. 4545 4
1 § 3221-a. Health benefit and cost commission. (a) For the purposes of
2 this section, "mandated health benefit" shall mean any requirement that
3 individual, group or blanket accident and health insurance policies or
4 contracts issued by hospital or health service corporations include:
5 (1) coverage for specific health services, treatment, tests, drugs,
6 supplies, or equipment to diagnose or treat a particular disease or
7 condition; and
8 (2) coverage for services of specific providers of health care
9 services.
10 (b) There is hereby created a commission within the department, to be
11 known as the "New York health benefit and cost commission" consisting of
12 thirteen members to be appointed as follows: three to be appointed by
13 the governor, three to be appointed by the temporary president of the
14 senate, three to be appointed by the speaker of the assembly, and one
15 each to be appointed by the minority leader of the senate and the assem-
16 bly. The superintendent and the commissioner of health, or their desig-
17 nated representatives, shall also serve as members of the commission.
18 The members shall elect a person to serve as chair.
19 (c) Each member shall serve for a term of four years. Vacancies shall
20 be appointed in the same manner as original appointments. The members of
21 the commission shall receive no compensation for their services but
22 shall be allowed actual and necessary expenses incurred in the perform-
23 ance of their duties. The commission may request and shall receive from
24 any department, board, bureau, commission, office, agency, or other
25 instrumentality of the state such facilities, assistance, and data as it
26 deems necessary or desirable for the proper execution of its powers and
27 duties. The commission may seek the assistance and advice of any person,
28 organization, or entity as may be relevant or necessary and may hire or
29 contract with any such person, organization, or entity. The commission
30 shall have the power to hold public hearings and solicit testimony on
31 any matter it deems relevant to carrying out its mission.
32 § 2. The legislative law is amended by adding a new section 52-a to
33 read as follows:
34 § 52-a. Requirements with respect to bills affecting mandated health
35 benefits. 1. For purposes of this section, the terms "mandated health
36 benefits" shall have the same meanings that they have in section three
37 thousand two hundred twenty-one-a of the insurance law.
38 2. In addition to any other fiscal note required, a bill that enacts
39 or amends any law in relation to mandating health benefits shall be
40 accompanied by an impact statement consisting of a fiscal note separate-
41 ly stating the estimated cost of the health benefits mandate in the bill
42 for the first year it is to be in effect and for the next succeeding
43 year, as well as a statement of the public purpose to be served by such
44 mandate.
45 3. The commission shall conduct a review and public comment period and
46 issue a report relating to legislation that would enact a mandated
47 health benefit. Such issuance shall:
48 (a) consider and summarize all public comment and all scientific,
49 medical, and actuarial data and information provided or obtained relat-
50 ing to the proposed mandated health benefit;
51 (b) report on public and patient health issues, including:
52 (i) the extent to which the proposed mandated health benefit is avail-
53 able and utilized by the state's population and the level of public
54 demand for the benefit;
55 (ii) the extent to which the proposed mandated health benefit is
56 already a covered health benefit;
A. 4545 5
1 (iii) if coverage is not generally available, the extent to which the
2 lack of coverage results in persons being unable to obtain necessary
3 health care and results in financial hardship for those needing such
4 care;
5 (iv) projected utilization rates and access to service that would
6 result from the proposed mandated health benefit;
7 (v) whether the proposed mandated health benefit is a medical or a
8 broader social need and whether it is consistent with the role of health
9 insurance and managed health care; and
10 (vi) the extent to which the proposed mandated health benefit is
11 generally recognized by the medical community as being effective and
12 efficacious, including appropriate review by scientific and medical peer
13 review literature; and
14 (c) report on access to coverage and economic issues, including:
15 (i) the impact on premiums, rates, and costs of health coverage in all
16 affected markets;
17 (ii) the impact that the proposed mandated health benefit may have on
18 the availability of other benefits;
19 (iii) the impact that the proposed mandated health benefit may have on
20 the availability of health coverage in each affected market and the
21 impact on the number of persons covered through self-insured plans; and
22 (iv) report on any other matter, question, or concern relating to a
23 mandated health benefit as may be determined relevant by the commission
24 or by the person having issued the request.
25 4. The commission shall allow a thirty-day public comment period and
26 issue a report to the governor and the legislature within ninety days
27 after receipt of a written request. The commission may extend its review
28 period and reporting time upon the consent of the person having issued
29 the request.
30 5. The commission shall review and report on utilization rates, public
31 and patient health effects, and impact on premiums and access to health
32 care and health coverage of all mandated health benefits existing on the
33 effective date of this section.
34 § 3. Section 213 of the insurance law is REPEALED.
35 § 4. This act shall take effect immediately.
36 PART D
37 Section 1. Short title. This act shall be known and may be cited as
38 the "New York health care savings act".
39 § 2. The public health law is amended by adding a new article 48-A to
40 read as follows:
41 ARTICLE 48-A
42 NEW YORK STATE HEALTH CARE SAVINGS PROGRAM
43 Section 4850. Program established.
44 4851. Purposes.
45 4852. Definitions.
46 4853. Functions of the comptroller and the corporation.
47 4854. Powers of the comptroller.
48 4855. Program requirements; New York state health care savings
49 account.
50 4856. Program limitations; New York state health care savings
51 account.
52 § 4850. Program established. There is hereby established the New York
53 state health care savings program and such program shall be known and
54 may be cited as the "New York state health care savings program".
A. 4545 6
1 § 4851. Purposes. The purposes of the New York state health care
2 savings program shall be to authorize the establishment of New York
3 state health care savings accounts and to provide guidelines for the
4 maintenance of such accounts.
5 § 4852. Definitions. For the purposes of this article, the following
6 terms shall have the following meanings:
7 1. "Account" or "New York health care savings account" shall mean an
8 individual or family savings account established in accordance with the
9 provisions of this article.
10 2. "Account owner" shall mean a person who enters into a health care
11 savings agreement pursuant to the provisions of this article, including
12 a person who enters into such an agreement as a fiduciary or agent on
13 behalf of a trust, estate, partnership, association, company or corpo-
14 ration. The account owner may also be the designated beneficiary of the
15 account.
16 3. "Designated beneficiary" shall mean, with respect to an account or
17 accounts, the individual designated as the individual whose health care
18 expenses are expected to be paid from the account or accounts.
19 4. "Financial organization" shall mean an organization authorized to
20 do business in the state of New York and:
21 (a) which is an authorized fiduciary to act as a trustee pursuant to
22 the provisions of an act of congress entitled "Employee Retirement
23 Income Security Act of 1974" as such provisions may be amended from time
24 to time, or an insurance company;
25 (b) (i) is licensed or chartered by the department of financial
26 services;
27 (ii) is chartered by an agency of the federal government;
28 (iii) is subject to the jurisdiction and regulation of the securities
29 and exchange commission of the federal government; or
30 (iv) is any other entity otherwise authorized to act in this state as
31 a trustee pursuant to the provisions of an act of congress entitled
32 "Employee Retirement Income Security Act of 1974" as such provisions may
33 be amended from time to time.
34 5. "Member of the family" shall mean a family member as defined in
35 section five hundred twenty-nine of the Internal Revenue Code of 1986,
36 as amended.
37 6. "Program" shall mean the New York state health care savings program
38 established pursuant to this article.
39 7. "Qualified health care expenses" shall mean any health care-related
40 expense including but not limited to: premiums, deductibles, copays,
41 long-term care, and any out-of-pocket expense incurred by the designated
42 beneficiary or their member of the family eligible for such expense.
43 8. "Qualified withdrawal" shall mean a withdrawal from an account to
44 pay the qualified health care expenses of the designated beneficiary of
45 the account.
46 9. "Nonqualified withdrawal" shall mean a withdrawal from an account,
47 but shall not mean:
48 (a) a qualified withdrawal; or
49 (b) a withdrawal made as the result of the death or disability of the
50 designated beneficiary of an account.
51 10. "Department" shall mean the department of health of the state of
52 New York.
53 11. "Comptroller" shall mean the comptroller of the state of New York.
54 12. "Management contract" shall mean the contract executed by the
55 comptroller and a financial organization selected to act as a depository
56 and manager of the program.
A. 4545 7
1 13. "Health care savings agreement" shall mean an agreement between
2 the comptroller or a financial organization and the account owner.
3 14. "Program manager" shall mean a financial organization selected by
4 the comptroller to act as a depository and manager of the program.
5 § 4853. Functions of the comptroller and the corporation. 1. The comp-
6 troller and the department shall implement the program under the terms
7 and conditions established by this article and a memorandum of under-
8 standing relating to any terms or conditions not otherwise expressly
9 provided for in this article.
10 2. In furtherance of such implementation the memorandum of understand-
11 ing shall address the authority and responsibility of the comptroller
12 and the department to:
13 (a) develop and implement the program in a manner consistent with the
14 provisions of this article through rules and regulations established in
15 accordance with the state administrative procedure act;
16 (b) engage the services of consultants on a contract basis for render-
17 ing professional and technical assistance and advice;
18 (c) seek rulings and other guidance from the United States department
19 of treasury and the internal revenue service relating to the program;
20 (d) seek federal waivers in order for the participants in the program
21 to obtain the federal income tax benefits or treatment provided by
22 section two hundred twenty-three of the Internal Revenue Code of 1986,
23 as amended, or any similar successor legislation;
24 (e) charge, impose, and collect administrative fees and service charg-
25 es in connection with any agreement, contract or transaction relating to
26 the program;
27 (f) develop marketing plans and promotion material;
28 (g) establish the methods by which the funds held in such accounts be
29 dispersed;
30 (h) establish the method by which funds shall be allocated to pay for
31 administrative costs; and
32 (i) do all things necessary and proper to carry out the purposes of
33 this article.
34 § 4854. Powers of the comptroller. 1. The comptroller may implement
35 the program through use of financial organizations as account deposito-
36 ries and managers. Under the program, individuals may establish accounts
37 directly with an account depository.
38 2. The comptroller may solicit proposals from financial organizations
39 to act as depositories and managers of the program. Financial organiza-
40 tions submitting proposals shall describe the investment instrument
41 which will be held in accounts. The comptroller shall select as program
42 depositories and managers the financial organization, from among the
43 bidding financial organizations that demonstrates the most advantageous
44 combination, both to potential program participants and this state, of
45 the following factors:
46 (a) financial stability and integrity of the financial organization;
47 (b) the safety of the investment instrument being offered;
48 (c) the ability of the investment instrument to track increasing costs
49 of health care;
50 (d) the ability of the financial organization to satisfy recordkeeping
51 and reporting requirements;
52 (e) the financial organization's plan for promoting the program and
53 the investment it is willing to make to promote the program;
54 (f) the fees, if any, proposed to be charged to persons for opening
55 accounts;
A. 4545 8
1 (g) the minimum initial deposit and minimum contributions that the
2 financial organization will require;
3 (h) the ability of financial organizations to accept electronic with-
4 drawals, including payroll deduction plans; and
5 (i) other benefits to the state or its residents included in the
6 proposal, including fees payable to the state to cover expenses of oper-
7 ation of the program.
8 3. The comptroller may enter into a contract with a financial organ-
9 ization. Such financial organization management may provide one or more
10 types of investment instrument.
11 4. The comptroller may select more than one financial organization for
12 the program.
13 5. A management contract shall include, at a minimum, terms requiring
14 the financial organization to:
15 (a) take any action required to keep the program in compliance with
16 requirements of section four thousand eight hundred fifty-five of this
17 article;
18 (b) keep adequate records of each account, keep each account segre-
19 gated from each other account, and provide the comptroller with the
20 information necessary to prepare the statements required by section four
21 thousand eight hundred fifty-five of this article;
22 (c) compile and total information contained in statements required to
23 be prepared under section four thousand eight hundred fifty-five of this
24 article and provide such compilations to the comptroller;
25 (d) if there is more than one program manager, provide the comptroller
26 with such information necessary to determine compliance with section
27 four thousand eight hundred fifty-five of this article;
28 (e) provide the comptroller or their designee access to the books and
29 records of the program manager to the extent needed to determine compli-
30 ance with the contract;
31 (f) hold all accounts for the benefit of the account owner;
32 (g) be audited at least annually by a firm of certified public
33 accountants selected by the program manager and that the results of such
34 audit be provided to the comptroller;
35 (h) provide the comptroller with copies of all regulatory filings and
36 reports made by it during the term of the management contract or while
37 it is holding any accounts, other than confidential filings or reports
38 that will not become part of the program. The program manager shall make
39 available for review by the comptroller the results of any periodic
40 examination of such manager by any state or federal banking, insurance,
41 or securities commission, except to the extent that such report or
42 reports may not be disclosed under applicable law or the rules of such
43 commission; and
44 (i) ensure that any description of the program, whether in writing or
45 through the use of any media, is consistent with the marketing plan
46 developed in the memorandum of understanding pursuant to the provisions
47 of section four thousand eight hundred fifty-three of this article.
48 6. The comptroller may provide that an audit shall be conducted of the
49 operations and financial position of the program depository and manager
50 at any time if the comptroller has any reason to be concerned about the
51 financial position, the recordkeeping practices, or the status of
52 accounts of such program depository and manager.
53 7. During the term of any contract with a program manager, the comp-
54 troller shall conduct an examination of such manager and its handling of
55 accounts. Such examination shall be conducted at least biennially if
56 such manager is not otherwise subject to periodic examination by the
A. 4545 9
1 superintendent of financial services, the federal deposit insurance
2 corporation or other similar entity.
3 8. (a) If selection of a financial organization as a program manager
4 or depository is not renewed, after the end of its term:
5 (i) accounts previously established and held in an investment instru-
6 ment at such financial organization may be terminated;
7 (ii) additional contributions may be made to such accounts;
8 (iii) no new accounts may be placed with such financial organization;
9 and
10 (iv) existing accounts held by such depository shall remain subject to
11 all oversight and reporting requirements established by the comptroller.
12 (b) If the comptroller terminates a financial organization as a
13 program manager or depository, they shall take custody of accounts held
14 by such financial organization and shall seek to promptly transfer such
15 accounts to another financial organization that is selected as a program
16 manager or depository and into investment instruments as similar to the
17 original instruments as possible.
18 9. The comptroller may enter into such contracts as necessary and
19 proper for the implementation of the program.
20 § 4855. Program requirements; New York state health care savings
21 account. 1. New York health care savings accounts established pursuant
22 to the provisions of this article shall be governed by the provisions of
23 this section.
24 2. A New York health care savings account may be opened by any person
25 who desires to save money for the payment of the qualified health care-
26 related expenses of the designated beneficiary or their member of the
27 family. An account owner may designate another person as successor owner
28 of the account in the event of the death of the original account owner.
29 Such person who opens an account or any successor owner shall be consid-
30 ered the account owner as defined in section four thousand eight hundred
31 fifty-two of this article.
32 (a) An application for such account shall be in the form prescribed by
33 the program and contain the following:
34 (i) the name, address and social security number or employer identifi-
35 cation number of the account owner;
36 (ii) the designation of a designated beneficiary;
37 (iii) the name, address, and social security number of the designated
38 beneficiary; and
39 (iv) such other information as the program may require.
40 (b) The comptroller and the department may establish a nominal fee for
41 such application.
42 3. Any person, including the account owner, may make contributions to
43 the account after the account is opened.
44 4. Contributions to accounts may be made in cash or may be deposited
45 by a taxpayer who has elected to contribute all or a portion of a refund
46 of personal income tax to an account that has been established under
47 this article.
48 (a) Taxpayer contributions shall be made by direct deposit to the
49 designated account. The amount elected to be contributed by the taxpayer
50 must be at least twenty-five dollars and may be applied as a contrib-
51 ution only for the tax year in which the refund is issued.
52 (b) The election shall be made on a form prescribed by the department
53 of taxation and finance and filed with the taxpayer's tax return for the
54 tax year or at such other time and in such other manner as the depart-
55 ment may prescribe. The department shall prescribe the maximum number of
A. 4545 10
1 accounts to which a taxpayer may elect to contribute a portion of the
2 refund.
3 (c) The election to contribute all or a portion of a refund shall not
4 be revocable.
5 (d) All or a portion of a refund may not be contributed to an account
6 that has been established under this article if the amount of the
7 taxpayer's elected refund for such tax year is reduced by any other
8 sections of the tax law to the amount less than the minimum amount of
9 contribution authorized under this section.
10 5. An account owner may withdraw all or part of the balance from an
11 account on sixty days notice or such shorter period as may be authorized
12 under rules governing the program. Such rules shall include provisions
13 that will generally enable the determination as to whether a withdrawal
14 is a nonqualified withdrawal or a qualified withdrawal.
15 6. (a) An account owner may change the designated beneficiary of an
16 account to an individual who is a member of the family of the prior
17 designated beneficiary in accordance with procedures established by the
18 memorandum of understanding pursuant to the provisions of section four
19 thousand eight hundred fifty-three of this article.
20 (b) An account owner may transfer all or a portion of an account to
21 another New York health care savings account, the subsequent designated
22 beneficiary of which is a member of the family.
23 (c) Changes in designated beneficiaries and transfers under this
24 subdivision shall not be permitted to the extent that they would cause
25 all accounts for the same beneficiary to exceed the permitted aggregate
26 maximum account balance.
27 7. The program shall provide separate accounting for each designated
28 beneficiary.
29 8. No account owner or designated beneficiary of any account shall be
30 permitted to direct the investment of any contributions to an account or
31 the earnings thereon more than two times in any calendar year.
32 9. Neither an account owner nor a designated beneficiary may use an
33 interest in an account as security for a loan. Any pledge of an interest
34 in an account shall be of no force and effect.
35 10. The comptroller shall promulgate rules or regulations to prevent
36 contributions on behalf of a designated beneficiary in excess of an
37 amount that would cause the aggregate account balance for all accounts
38 for a designated beneficiary to exceed a maximum account balance, as
39 established from time to time by the comptroller and the department on
40 the basis of health care costs in the state, with adequate safeguards to
41 prevent more contributions than necessary to provide for qualified
42 health care expenses of the beneficiary or their member of the family.
43 11. (a) If there is any distribution from an account to any individual
44 or for the benefit of any individual during a calendar year, such
45 distribution shall be reported to the internal revenue service and the
46 account owner, the designated beneficiary, or the distributee to the
47 extent required by federal law or regulation.
48 (b) Statements shall be provided to each account owner at least once
49 each year within sixty days after the end of the twelve month period to
50 which they relate. The statement shall identify the contributions made
51 during a preceding twelve month period, the total contributions made to
52 the account through the end of the period, the value of the account at
53 the end of such period, distributions made during such period and any
54 other information that the comptroller shall require to be reported to
55 the account owner.
A. 4545 11
1 (c) Statements and information relating to accounts shall be prepared
2 and filed to the extent required by federal and state tax law.
3 12. (a) A local government or organization described in section
4 501(c)(3) of the Internal Revenue Code of 1986, as amended, may open and
5 become the account owner of an account to fund qualified health care
6 expenses for persons whose identity will be determined upon disburse-
7 ment.
8 (b) In the case of any account opened pursuant to paragraph (a) of
9 this subdivision the requirement set forth in subdivision two of this
10 section that a designated beneficiary be designated when an account is
11 opened shall not apply and each individual who receives an interest in
12 such account as a qualified health care expense shall be treated as a
13 designated beneficiary with respect to such interest.
14 13. An annual fee may be imposed upon the account owner for the main-
15 tenance of the account.
16 14. The program shall disclose the following information in writing to
17 each account owner and prospective account owner of a New York health
18 care savings account:
19 (a) the terms and conditions for purchasing a New York health care
20 savings account;
21 (b) any restrictions on the substitution of beneficiaries;
22 (c) the person or entity entitled to terminate the New York health
23 care savings account;
24 (d) the period of time during which a beneficiary may receive benefits
25 under the health care savings agreement;
26 (e) the terms and conditions under which money may be wholly or
27 partially withdrawn from the program, including, but not limited to, any
28 reasonable charges and fees that may be imposed for withdrawal;
29 (f) the probable tax consequences associated with contributions to and
30 distributions from accounts; and
31 (g) all other rights and obligations pursuant to health care savings
32 agreements, and any other terms, conditions, and provisions deemed
33 necessary and appropriate by the terms of the memorandum of understand-
34 ing entered into pursuant to section four thousand eight hundred fifty-
35 three of this article.
36 15. Health care savings agreements shall be subject to section four-
37 teen-c of the banking law and the "truth-in-savings" regulations promul-
38 gated thereunder.
39 § 4856. Program limitations; New York state health care savings
40 account. 1. Nothing in this article shall be construed to:
41 (a) give any designated beneficiary any rights or legal interest with
42 respect to an account unless the designated beneficiary is the account
43 owner;
44 (b) create state residency for an individual merely because the indi-
45 vidual is a designated beneficiary or their member of the family; or
46 (c) guarantee that amounts saved pursuant to the program will be
47 sufficient to cover the qualified health care expenses of a designated
48 beneficiary or their member of the family.
49 2. (a) Nothing in this article shall create or be construed to create
50 any obligation of the comptroller, the state, or any agency or instru-
51 mentality of the state to guarantee for the benefit of any account owner
52 or designated beneficiary with respect to:
53 (i) the rate of interest or other return on any account; and
54 (ii) the payment of interest or other return on any account.
55 (b) The comptroller and the department by rule or regulation shall
56 provide that every contract, application, deposit slip, or other similar
A. 4545 12
1 document that may be used in connection with a contribution to an
2 account clearly indicate that the account is not insured by the state
3 and neither the principal deposited nor the investment return is guaran-
4 teed by the state.
5 § 3. Subsection (b) of section 612 of the tax law is amended by adding
6 a new paragraph 44 to read as follows:
7 (44) (A) Excess distributions received during the taxable year by a
8 distributee of a New York health care savings account established under
9 the New York health care savings program provided for under article
10 forty-eight-A of the public health law, to the extent such excess
11 distributions are deemed attributable to deductible contributions under
12 paragraph forty-eight of subsection (c) of this section.
13 (B) (i) The term "excess distributions" means distributions which are
14 not:
15 (I) qualified withdrawals within the meaning of subdivision eight of
16 section four thousand eight hundred fifty-two of the public health law;
17 (II) withdrawals made as a result of the death or disability of the
18 designated beneficiary within the meaning of subdivision nine of section
19 four thousand eight hundred fifty-four of the public health law; or
20 (III) transfers described in paragraph b of subdivision six of section
21 four thousand eight hundred fifty-five of the public health law.
22 (ii) Excess distributions shall be deemed attributable to deductible
23 contributions to the extent the amount of any such excess distribution,
24 when added to all previous excess distributions from the account,
25 exceeds the aggregate of all nondeductible contributions to the account.
26 § 4. Subsection (c) of section 612 of the tax law is amended by adding
27 two new paragraphs 48 and 49 to read as follows:
28 (48) Contributions made during the taxable year by an account owner to
29 one or more New York health care savings accounts established under the
30 New York health savings program provided for under article forty-eight-A
31 of the public health law, to the extent not deductible or eligible for
32 credit for federal income tax purposes; provided, however, the exclusion
33 provided for in this paragraph shall not exceed five thousand dollars
34 for an individual or head of household, and for married couples who file
35 joint tax returns, shall not exceed ten thousand dollars; provided,
36 further, that such exclusion shall be available only to the account
37 owner and not to any other person.
38 (49) Distributions from a New York health care savings account estab-
39 lished under the New York state health care savings program provided for
40 under article forty-eight-A of the public health law, to the extent
41 includible in gross income for federal income tax purposes.
42 § 5. This act shall take effect immediately and shall apply to taxable
43 years beginning on or after the first of January next succeeding the
44 date on which it shall have become a law.
45 § 4. Severability clause. If any clause, sentence, paragraph, subdivi-
46 sion, section or part of this act shall be adjudged by a court of compe-
47 tent jurisdiction to be invalid, such judgment shall not affect, impair
48 or invalidate the remainder thereof, but shall be confined in its opera-
49 tion to the clause, sentence, paragraph, subdivision, section or part
50 thereof directly involved in the controversy in which such judgment
51 shall have been rendered. It is hereby declared to be the intent of the
52 legislature that this act would have been enacted even if such invalid
53 provisions had not been included herein.
54 § 5. This act shall take effect immediately provided, however, that
55 the applicable effective date of Parts A through D of this act shall be
56 as specifically set forth in the last section of such Parts.
