New York Health Plan Association Joins Lawsuit Over Illegal Assessments

The New York Health Plan Association (HPA) today joined the New York Insurance Assn., Inc. in suing New York over the government’s illegal assessments on insurance companies to fund agencies unrelated to insurance. 

The suit, filed in State Supreme Court in Albany, challenges the levy on insurers known as the 332 assessment and how the funds collected are used. The 332 assessments, which by state law are to be used only for the operating expenses of the New York State Department of Insurance (DOI), are increasingly being used for other purposes. 

“These assessments, paid only by New York based insurers, drive up the cost of health care in our state,” said Paul Macielak, HPA president & CEO. “That is bad news for small businesses and families who are finding it increasingly difficult to afford health insurance coverage in New York.” 

Since 2000-2001, DOI’s budget has more than quadrupled and the amount of sub-allocations has increased by more than 22 times. Of DOI’s $555.5 million budget for the 2009-2010 State Fiscal year, only $138 million represented actual operating expenses.  This means approximately 57% of the department’s total 2009-2010 budget represented funding for programs unrelated to the operating expenses of the department.   

“These programs should be paid for from the state’s General Fund, paid for by all taxpayers,” noted Macielak.  “This is a classic case of robbing — or taxing — Peter to pay Paul.  It’s bad fiscal policy and, because continuing to raise the cost of health care in New York is directly counter to the goal of expanding insurance coverage, it’s bad health care policy too.”