The Office of General Counsel issued the following opinion on July 18, 2003, representing the position of the New York State Insurance Department.
Re: N.Y. Comp. Codes R. & Regs. tit. 11, § 52.16(f) (2002) & Group College Student Accident and Sickness Insurance Policies
Do the provisions of N.Y. Comp. Codes R. & Regs. tit. 11, § 52.16(f) (2002) apply to group college student accident and health insurance policies?
Please see the analysis below.
An Illinois third party administrator ("Issuer") plans to issue group student accident and health insurance policies to New York State colleges. Each group policy will cover more than three hundred college students; and coverage under each policy is mandatory, but may be waived by students who already have health insurance.
At the outset, it should be noted that accident and health insurance policies, which are issued to colleges to cover their students, are recognized as blanket policies under N.Y. Ins. Law § 4237(a)(3)(C) (McKinney 2000), which provides that:
(3) Any policy or contract of insurance which combines the coverage of blanket accident insurance and of blanket health insurance on such a group of persons shall be deemed a blanket accident and health insurance policy:
. . . .
(C) Under a policy or contract issued to a college, school, or other institution of learning or to the head or principal thereof, who or which shall be deemed the policyholder.
N.Y. Comp. Codes R. & Regs. tit 11, § 52.16(f) (2002) states the following:
(f) No group or blanket medical expense insurance policy insuring 300 or more persons, excluding dependents, shall contain a provision which excludes or limits coverage for preexisting conditions for any person who elects coverage during the first 30 days of eligibility. This provision shall not apply to blanket insurance where enrollment for the coverage is voluntary, to dental insurance, to insurance written under section 4235(c)(1)(H), (K), (L) and (M) of the Insurance Law or to the extent that insurance written under section 4235(c)(1)(B) and (D) of the Insurance Law insures employees of an employer with less than 300 employees.
Thus, a group or blanket medical expense insurance policy, which insures 300 or more persons, may not exclude or limit coverage for individuals that elect such coverage during the first 30 days of their eligibility, unless such policy meets the criteria of a listed exception. This restriction, and its exceptions, apply equally to both student and employer/employee medical expense insurance policies regardless of their designation as group or blanket policies. Therefore, the policy limitations and exceptions of § 52.16(f) would be applicable to mandatory accident and health insurance policies issued to New York State colleges covering 300 or more students each.
Under the facts presented, the only plausible § 52.16(f) exception is § 4235(c)(1)(M) (McKinney Supp. 2003), which provides the following:
(c) (1) No policy of group accident, group health or group accident and health insurance shall be delivered or issued for delivery in this state unless it conforms to one of the following descriptions:
. . . .
(M) A policy issued to insure any other group approved by the superintendent upon a finding that: (i) there is a common enterprise or economic or social affinity or relationship; (ii) the premiums charged are reasonable in relation to the benefits provided; and (iii) the issuance of the policy would result in economies of acquisition or administration, would be actuarially sound, and would not be contrary to the best interest of the public. The superintendent shall promulgate regulations setting forth any such groups that have been accepted as qualifying pursuant to this subparagraph.
Please be advised that: (1) the Issuer has the burden of justifying its plan to designate a student accident and health policy as a group policy under N.Y. Ins. Law § 4235 (McKinney 2003) because such policies are consistently recognized as blanket policies under § 4237(a)(3)(C); (2) all § 4235(c)(1)(M) group accident and health insurance policies must be filed with the Insurance Department and approved by the Superintendent of Insurance before issuance; and (3) all groups insured pursuant to § 4235(c)(1)(M) must be expressly recognized by the Superintendent before an insurer or its agent may issue such groups any group policy.
For further information you may contact Senior Attorney Kristian Earl Lynch at the New York City Office.