both psychiatrists and psychologists and, therefore, should be reimbursed accordingly. The legislation did not say that reimbursement for psychological services by a psychologist should be included in every health insurance contract, but, on the contrary, indicated that only policies which allow reimbursement for "psychological services" performed by a "physician or a psychiatrist" are affected.

Although the statute, as originally enacted in 1969, did not contain any specific language as to its applicability, the subsequent amendment of the law by the legislature in 1971 stated that the law, as enacted, was meant to apply to policies "written, renewed, modified or altered on or after such date" of enactment. Thus, it is abundantly clear that the statute is prospective in its application.

Metropolitan, in agreeing that the statute should be given prospective application, argues that the amendments should have no application to the group policy in question as the policy was issued prior to the effective date of the statutory enactment. While it is true that the original contract of insurance was enacted into in 1957, more than twelve years prior to the enactment of the first amendment of section 221, the term of the policy1 was for "one year commencing on the date of issue hereof and shall be renewed from year to year thereafter, unless [the] policy is terminated as herein provided."

3

By its very terms, Metropolitan had the absolute right to terminate the policy on its anniversary date by giving the State at least ninety days prior written notice. (Article X[2][b].) Certainly, if Metropolitan did not wish to extend coverage to include reimbursement for services rendered by a psychologist, it had the option not to renew the contract on the next anniversary date of the policy following the enactment of the statute. In addition, the insurance company had the option, upon any "premium due date", to change the insurance premium rate by giving written notice of such change at least sixty days prior to the effective date of such change. (Article XI [3][4].) In other words, if Metropolitan did not wish to invoke the drastic remedy of termination to avoid the increased burden of underwriting coverage mandated by section 221(5) (e) of the Insurance Law, it could have simply raised the premium rate to offset any higher costs resulting from such additional coverage. Thus, where, as here, an insurer has the absolute right to terminate a policy on its anniversary date or to change the insurance premium rate without the State's consent, the policy is modified upon renewal of the policy, by operation of law, to include reimbursement for services rendered by psychologists, as provided for by statute.

Where, however, the insurer does not have the right to terminate the policy or change the premium rate without consent of the State, renewal, by the payment of premiums, merely continues in force the preexisting policy, and statutes enacted subsequent to its original enactment cannot be applied. (Mulligan v. Travelers Ins. Co., 280 App. Div. 764, affd. 306 N.Y. 805.) Thus, we conclude that the element of choice under the contract, granted to the insurer, makes the prospective application of the statute constitutionally permissible. (Cf., Nebbitt v. Carpenter, 305 U. S. 297).

[Metropolitan also claims that since psychologists are not permitted to practice medicine, the statute is not applicable inasmuch as the policy merely covers "medical services". The argument is specious. There is no doubt that some services rendered by a physician may also be rendered by a psychologist. To this extent, the two professions overlap and, as plaintiff points out,

1 The policy was amended in 1959 to read:

"(1) The terms of this Policy which commenced on December 5, 1958 shall end at 12:01 a.m. on November 30, 1959, and this Policy shall be renewed for a term of one year commencing on the last above mentioned date and from year to year thereafter, unless this Policy is terminated as herein provided.”

Again, in 1961, the policy was amended to provide that the term of the policy would "end at 12:01 a.m. on November 1, 1961" and that it "shall be renewed for a term of one year commencing on the last above mentioned date and from year to year thereafter, unless this Policy is terminated as herein provided."

2 Article X of the contract provides :

"(2) This Policy shall be terminated (a) By default in the payment of premiums in accordance with Article XI hereof. (b) At the option of the Insurance Company on any anniversary of the date of issue by giving at least ninety days prior written notice to the Employer."

3 Amended in 1962 to read "ninety days".

it is only in those situations where the practices overlap that the statute mandates reimbursement for psychologists' services. Indeed, Metropolitan makes no claim that its policy would not cover services here rendered if administered by a physician rather than a psychologist, or that the services are not medical in nature. It is error to equate the “practice of medicine" (Education Law, § 6521), which is restricted to licensed physicians with the furnishing of "medical services" which obviously may be performed by any of a number of professionals or para-medical personnel, as specifically authorized by the policy. (Article V[2]—Covered Medical] Expenses.)

There remains the issue involving plaintiff's right to bring a class action. The court affirms the dismissal of this cause of action only because it is satisfied that on any view this complaint merits no such procedure. It notes, however, that the restrictive interpretation in the past of CPLR 1005 and its predecessor statutes no longer has the viability it may once have had. (See, Hall v. Coburn Corp. of America, 26 N.Y. 2d 396, 401; Zachary v. Macy & Co., 31 N.Y. 2d 443; 1972 Judicial Conference Report, p. 242; 1973 Judicial Conference Report, p. A 35.) The court is also aware that there was pending before the Legislature last year and will be again this year a comprehensive proposal to provide a broadened scope and a more liberal procedure for class actions, an objective shared by the members of this court. (See, Senate Bill No. 8544; Assembly Bill, No. 10.488.) Because the proposed statute would assure limitations and safeguards which would be highly desirable in broadening the jurisdiction of the courts of this state over class actions, legislation in this area is highly preferable to the alternative of judicial development in the same direction. In our view there is urgency for early legislation to accomplish these purposes, in light of the general and judicial dissatisfaction with the existing restrictions on class action which in many instances may mean a total lack of remedy, as a practical matter, for wrongs demanding correction.

Accordingly, we affirm the order appealed from in both cases.

In case No. 220-Order affirmed, with costs to appellant. Opinion by Jasen, J. All concur except Wachtler, J., who dissents and votes to reverse in the following memorandum: I am to reverse and believe that this class should be certified. As is noted by the majority, "the restrictive interpretation in the past of CPLR S 1005 and its predecessor statutes no longer has the viability it may once have had." Remembering that those restrictive interpretations were a product of this court, it would seem most appropriate that this court, recognizing the need for a broadened and more liberal procedure for class actions, should take the initiative in that direction. Fuld, Ch. J., taking no part.

In case No. 260-Order affirmed, with costs. Opinion by Jasen, J. All concur. Mr. WILLIAMS. For your information, too, you know there is another area of interest that is not related precisely to this bill, but has to do with it, and that is with the cost problem.

There is a good deal of evidence accumulated, as this committee knows, and other material that has been submitted by other persons, that as you utilize psychological benefits in the program, or mental health programs, whatever they are, diagnosis and treatment of mental conditions or emotional ailments, that utilization goes down in the physical realm rather significantly at times.

Kaiser in San Francisco has three major studies in this area. There are other studies. GHA here in Washington has such a study. They have been submitted in the past, I think, but if not, we can supply those.

There is one that I do not think you know about, and we would like to submit it for the record, and that is the Kennecott Copper Corp. in Utah.

The CHAIRMAN. The staff advises me that we have it and we will make that a part of the record.

Mr. WILLIAMS. Let me put it this way as one sentence finding with this study, that for the record that examination—well, a before and after examination of a sample of employees using the program which is basically the use of psychological diagnosis and treatment by a variety of practitioners, absenteeism at Kennecott dropped 52 percent; decreased their weekly indemity cost 74.6 percent, and decreased their hospital medical-surgical costs 55.4 per

cent.

We are asking basically that the Federal employee have the same. opportunity of free choice of provider, as the millions of their fellow citizens under other plans.

We wish to thank you, Senator McGee, for introducing S. 2619, and the other Senators on this committee for the time you have given me today.

The CHAIRMAN. Thank you very much.

Those five bells are the panic buttons.

Senator Fong and I are both involved on the floor. So I am going to have to inject here an arbitrary ruling with apologies. That is, that my questions to you, Mr. Williams, we will submit to you so that you may respond to them for the record.

Mr. WILLIAMS. I would appreciate that.

[Study of the Kennecott Copper Corp. and Mr. Williams prepared statement follow:]

KENNECOTT IS PEOPLE.. WHO CARE ABOUT KENNECOTT PEOPLE WHO NEED CARE

INSIGHT

A Program for Troubled People

INSIGHT-a program of help by referral. Made available to the employees and dependents (approximately 32,000) of the Kennecott Copper Corporation, Utah Copper Division, this service provides an easy way for a person in need to secure help through the proper community resources.

We are unique in several ways: (Enclosures 1 and 2)

First, we seek a program that can offer not only a service, but confidentiality, self-determination, and convenience. To accomplish this, we accept referrals from all sources ranging from the employee relations department, unions and supervisors, to friends, family and relatives.

Second, we have eliminated all "red-tape"; one need only dial the letters I-N-S-I-G-H-T (467-4448) and a twenty-four hour a day, seven day a week counseling service is at their disposal. Anyone may contact INSIGHT and report a problem affecting an employee.

Third, we will guarantee anonymity for the caller and the person referred. If the person accepts INSIGHT's offer, help is given; if not, we politely back away.

The mechanics begin with a call to INSIGHT. The caller is then referred to the program director, a psychiatric social worker, for counseling. Problems are discussed and alternative solutions utilizing community resources are made available. The employee or dependent then makes a decision and a referral is made. Follow-up is very important to make sure the referred individual received the necessary help. Sometimes another referral is required.

INSIGHT performs a valuable service in many areas:

Labor-Management Relations.-Employees who begin to develop chronic absence or poor job performance patterns are offered help before the problem gets out of hand. To accomplish these goals, assistance is offered in the areas of alcoholism, drug abuse, family problems, marital problems, indebtedness, legal problems, etc. Whatever the reason, referral to INSIGHT permits getting to the root cause, and, in many cases, solves the problems and saves the employee's job.

Disciplinary Procedures.-INSIGHT is built into the company disciplinary procedure. Working on the premise that the sooner an employee with a job performance or absenteeism problem gets help, the better his chance for keeping his job will be.

Normally, unsatisfactory job performance or excessive absenteeism will gain the employee a verbal warning with the first offense. If improvements are not made, a written warning follows. Continued misconduct warrants a hearing with the employee, his union representative and the employee relations department. Probationary terms are usually issued at this point. The next and final disciplinary step is termination.

With each of the above contacts with the employee, INSIGHT is also notified (Enclosure 3). Our approach then is to offer our assistance-involvement in the INSIGHT program is never mandatory. Each time a sincere attempt is made to help the troubled employee and in the vast majority of cases, our services are gratefully received and appropriate corrections made. Employee morale is greatly boosted when it is realized that the company will take an interest in a man's problem and offer him help rather than an insensitive mandatory stipulation of compliance or else Loyalty toward the company and the man's job is the prevailing result.

Education. Of course, to make maximum penetration possible, information regarding the program and its potentials must be effectively disseminated. This is accomplished through direct letters to the employees, special bulletins, company magazines, television spots, and presentation through lecture to the front line supervisors and union personnel. (Enclosures 4 thru 6). Explanation of program mechanics lowers anxiety and speculation regarding involvement. The best means of advertising, however, is through positive "feed back" from those having experience with INSIGHT.

Community Organization. It is the responsibility of INSIGHT to maintain a working rapport with community social service agencies and all other facilities that might be made available to our employees and their dependents for whatever problems they might have. To accomplish this, we must not only make ourselves acquainted with community resources, but become a part of community planning.

Public Relations.-There are some interesting public relations dynamics involved here. Every year the Utah Copper Division receives many requests for community project donations. Often in the past, these contributions were made and remained just that-contributions. Now, we consider these contributions more in terms of an investment, beneficial to both Kennecott Copper Corporation employees and the community at large.

We have a follow-up procedure that indicates to us, through the participating persons, just how adequately they are being helped. This enables us to give valuable feed back information to community social service agencies and private facilities to whom we have referred our people. We, therefore, become actively responsible in upgrading existing resources and making recommendations for improvement.

Enclosures 7 and 8 are copies of articles regarding INSIGHT which have appeared in national publications.

Recording. An accurate, up-to-date recording system is self-explanatory. It provides us with a reliable means of measure for current response and evaluation. It assists us in making program adjustments and documents history (Enclosure 9).

Research. Closely related to recording rationale is the need for accurate research. We are currently trying to upgrade our own services and effectiveness in an attempt to not only accommodate but encourage program participation.

Our research has included to date a preliminary study for program justification and comparison. It was followed by a study within the plants to check absenteeism and job performance improvements of those employees who were referred via the disciplinary procedure (Enclosures 10 thru 12). Our most recent study was completed mid-way through the program's thirty-second month, February, 1973. A sample of 150 men who had used the INSIGHT program were observed on a "before and after" basis. i.e.. calculating their absenteeism, weekly indemnity costs, and hospital medical surgical costs over a six month period prior to their involvement with INSIGHT, compared with a six month period immediately following their program involvement.

It was indicated that after an average of 12.7 months in INSIGHT, these 150 men improved their attendance 52.0 percent; decreased their weekly indemnity costs 74.6 percent, and decreased their hospital medical surgical costs 55.4 percent.

It is evident that the INSIGHT services are productive of results in relation to alcoholism and other personal and social problems. It is apparent that absenteeism can be reduced considerably by providing people with social services for problem solving. This is accomplished by continuous up-to-date knowledge of community resources, shared with the individual according to need and interest. Such a program improves morale, enhances employee relations and better integrates industry into the community's activities. Benefits are realized by both the individual and the company (Enclosure 13). Current Status Report.-Periodically we inform the employees of the program's progress and utilization. This enables them to remain currently appraised and aware that the program continue to operate. Without such information, impetus falters and enthusiasm dwindles.

It has been our experience that such notification to the employee and our managers encourages them to realize not only the effectiveness and participation of the program, but also that it remains viable.

Following are the principles prerequisite to success in a troubled peoples' program of help by referral:

1. Fear must be removed.

2. Confidentiality and anonymity must be assured.

3. The people carrying out the program must be knowledgeable, sensitive, dedicated, and must be able to develop rapid empathy with all kinds of people.

4. The proper relationships, both internally and externally, must be developed and maintained.

5. The people who get help must of necessity be the sellers of your program to their peers.

6. You cannot rely on your foreman or your medical department to do the entire job. (They can assist).

7. Services must be available when needed, 24 hours a day, seven days a week. 8. To label a program an alcoholic rehabilitation program is to court disaster and guarantee lack of penetration.

(a) If a program is sold as alcoholism per se, you are doing a disservice to the companies and employees represented.

Enclosure 5
INSIGHT

On July 1, 1970, the Utah Copper Division of the Kennecott Copper Corporation launched a program of help for troubled employees and their dependents and named it INSIGHT. The concept is simple-it is to provide professional counseling to 8,000 Kennecott employees and their 24.000 dependents who have problems and to help them get the help they need from Salt Lake County's 220 community service organizations. Program utilization is voluntary, confidential, available 7 days a week, 24 hours a day, and had by dialing I-N-S-I-G-H-T (467-4448) on the telephone.

Results have far exceeded expectations. Over a 32-month period, 3.746 persons had solicited help: 1,623 employees and 2,364 dependents had been placed in programs designed to help. The volume has not yet slackened.

The impact of INSIGHT has extended beyond Kennecott. The National Institute on Alcohol Abuse and Alcoholism in carrying out its mandate under the Hughes Act, has adopted INSIGHT's "troubled people" concept. We are informed civil service will use this approach. It is currently being effected for 120,000 civil service employees in the San Francisco Bay area and for the civil service employees in the State of Hawaii. The federal organization being established to expend $365,000,000 annually for drug addiction rehabilitation is interested in this concept-particularly as it relates to penetration and utilization of rehabilitative community facilities. The city of Phoenix, Arizona, is in process of establishing an INSIGHT program. Pacific Telephone & Telegraph, San Francisco, has started an INSIGHT program for its 21,000 employees. Hundreds of requests for information from both the private and public sectors have been received and answered.