The office of General Counsel issued the following informal opinion on October 2, 2002, representing the position of the New York State Insurance Department.

Re: Group Health Insurance Policy, Coverage of Grandchildren


May a grandparent cover his or her grandchild as a dependent under an active/retiree group plan without legal custody or a court order?


As to insured group policies and contracts issued in New York, if the grandchild is chiefly dependent upon the grandparent for support and maintenance, the grandparent may add the grandchild to his or her family coverage, notwithstanding that the grandparent does not have legal custody or a court order. As to group policies and contracts issued out of state to a type of group as described herein and covering New York residents, if the employer and insurer opt to provide coverage for grandchildren, the law of the jurisdiction where the policy or contract is issued would govern.


The inquirer’s firm is benefits administrator for XYZ International. As one of the employee benefits, XYZ offers health insurance coverage through a Health Maintenance Organization licensed or certified in the jurisdiction in which the employee resides, in this case New York. In addition, out of network coverage, or as it is sometimes referred point of service, is provided by a group health insurance policy issued to XYZ outside of New York by an insurer licensed to transact a health insurance business in, inter alia, New York.


Health Maintenance Organizations in New York are issued a Certificate of Authority from the Commissioner of Health pursuant to New York Public Health Law Article 44 (McKinney 2002). Contracts of HMOs are, however, subject to regulation by this Department as if they were health insurance subscriber contracts. New York Public Health Law § 4406(1) (McKinney 2002).

In accordance with New York Insurance Law § 4305(a) (McKinney 2000 and 2002 Supplement), group health insurance subscriber contracts may be issued to groups described in New York Insurance Law § 4235(c) (McKinney 2000 and 2002 Supplement). New York Insurance Law § 4235(c)(1)(A) authorizes issuance of:

A policy issued to an employer or to a trustee or trustees of a fund established by an employer, which employer or trustee or trustees shall be deemed the policyholder, insuring with or without evidence of insurability satisfactory to the insurer, employees of such employer, and insuring, except as hereinafter provided, all of such employees or all of any class or classes thereof determined by conditions pertaining to the employment or a combination of such conditions and conditions pertaining to the family status of the employee, for insurance coverage on each person insured based upon some plan which will preclude individual selection. . . . If all or part of the premium is to be derived from funds contributed by the insured employees, then such policy must insure not less than fifty percent of such eligible employees or, if less, fifty or more of such employees.

New York Insurance Law § 4235(d)(1) provides, in pertinent part:

In this section, for the purpose of insurance hereunder: ‘employees’ includes the officers, managers, employees and retired employees of the employer and of subsidiary or affiliated corporations of a corporate employer . . . .

New York Insurance Law § 4305(c)(1) provides, in pertinent part:

Any such contract may provide that benefits will be furnished to a member of a covered group, for himself, his spouse, his child or children, or other persons chiefly dependent upon him for support and maintenance . . . .

New York Insurance Law § 4235(f), governing the terms of group policies issued by commercial insurers, has a similar provision.

Accordingly, a New York HMO may, if it desires, issue a contract to XYZ that will include grandchildren as dependents. Whether the grandchild is chiefly dependent upon the grandparent for support and maintenance is a question of fact. It would not be necessary that there be legal custody by the grandparent or a court order before there is a factual determination of whether there is a dependency relationship.

As to the point of service coverage provided by a non New York policy, since the policy is issued to a "true group", New York Insurance Law § 1101(b)(2)(B)(i)(II)(aa) (McKinney 2000 and 2002 Supplement), by an insurer licensed to transact a health insurance business in New York, in accordance with New York Insurance Law § 3201(b)(1) McKinney 2000 and 2002 Supplement), this Department does not assert jurisdiction over the content of the policy, or the certificate issued in New York. Therefore, the question of whether the policy allows a grandchild to be considered a dependent would be governed by the law of the jurisdiction where the policy is issued.

Statutes other than the New York Insurance Law govern the relationship between grandparents and grandchildren. Reference should also be had to those statutes.

 For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.