The Office of General Counsel issued the following opinion on January 6, 2003, representing the position of the New York State Insurance Department.
Re: Group Health Insurance, Coverage of Dependent Child
Are an employer and/or insurer required to continue the coverage of a disabled dependent child beyond the otherwise specified termination age of coverage?
If the employer has purchased a group health insurance policy covering dependents, New York Insurance Law §§ 4235(f) and 4305(c) (McKinney 2000 and 2003 Supplement) mandate continuation of coverage for unmarried disabled dependent children who are incapable of self-sustaining employment, as long as the insurance remains in force and the dependent remains in such condition.
Since this was a general question, no facts were provided.
The provision of health benefits by an employer to employees constitutes a welfare benefit plan as that term is defined in the Employee Retirement Income Security Act (ERISA). 29 U.S.C.A. § 1002(1) (West 1999). ERISA does not contain any substantive requirements concerning coverage of dependents. Although, if the employer opts to cover dependents, information as to the scope of such coverage must be provided to employees as part of a Summary Plan Description (SPD). 29 U.S.C.A. § 1022 (West 1999).
The enactment of ERISA has divested states of jurisdiction over substantive requirements for employee welfare benefit plans. 29 U.S.C.A. § 1144(a) (West 1999). The states, however, retain jurisdiction over required policy provisions, even if the policy is issued to an ERISA employee welfare benefit plan. Metropolitan Life Insurance Company v. Massachusetts, 471 U.S. 724 (1985).
New York Insurance Law § 4235(f)(1), regulating insurance policies issued by commercial insurers, provides:
Any policy of . . . group health . . . health insurance may include provisions for the payment by the insurer of benefits for expenses incurred on account of hospital, medical or surgical care . . . for the employee or other member of the insured group, his spouse, his child or children, or other persons chiefly dependent upon him for support and maintenance; provided that a policy under which coverage of a dependent of an employee or other member of the insured group terminates at a specified age shall not so terminate with respect to an unmarried child who is incapable of self-sustaining employment by reason of mental illness, developmental disability, mental retardation, as defined in the mental hygiene law, or physical handicap and who became so incapable prior to attainment of the age at which dependent coverage would otherwise terminate and who is chiefly dependent upon such employee or member for support and maintenance, while the insurance of the employee or member remains in force and the dependent remains in such condition, if the insured employee or member has within thirty-one days of such dependent's attainment of the termination age submitted proof of such dependent's incapacity as described herein.
A similar requirement is imposed by New York Insurance Law § 4305(c)(1) upon insurance contracts issued by Health Service Corporations and Health Maintenance Organizations.
While neither an employer nor an insurer is required by New York law to provide dependent coverage, if such coverage is provided the insurance policy or contract must comply with the applicable statute: either New York Insurance Law § 4235(f)(1) or § 4305(c)(1). While the employer has discretion to select the age at which dependent child coverage shall terminate, neither the employer nor the insurer have discretion as to continuation of coverage for unmarried disabled dependent children who are incapable of self-sustaining employment while the insurance of the employee remains in force and the dependent remains in such condition.
For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.