On Feb. 18, NYDFS issued circular on disability public benefit offsets.
NYDFS issued Circular Letter 1 re individual, group disability income insurance policies.
Letter addressed to New York state insurers who write accident and health insurance.
Confirms that policies can only lower disability payouts when alternate governmental benefits such as disability insurance, workers compensation are actually received.
Overview
Clarifies permissible government benefit offsets in disability income insurance policies.
Insurers cannot reduce benefits based on estimated SSDI, workers' compensation, other government benefits an insured might qualify for, only those actually received.
Cannot require individuals to apply for government benefits, or appeal benefit denials.
Individuals may request an optional offset for estimated benefits, with opt out ability.
Carriers may apply over insurance provisions after issuance if combined monthly benefits exceed prior earnings, with proper provision of a pro-rata premium refund.
Requested Revisions
Insurers must review and revise non-compliant policy forms and submit them to the Department’s health bureau within 60 days of the circular letter, by Apr. 14, 2025.
