OGC Opinion No. 08-09-04

Office of General Counsel issued the following opinion on September 17, 2008 representing the position of the New York State Insurance Department.

RE: Group Health Insurance, Continuation Period

Question Presented:

Is the term “disabled” defined in the Insurance Law?


As a general matter, the term “disabled” is not defined in the Insurance Law, but it is defined in Insurance Law § 3221(m) with reference to continuation of group health insurance coverage.


The inquirer reports that, until recently, he was a principal and sub-licensee in an insurance agency with fewer than 20 employees, and that his wife was an employee of the agency. The agency provided health insurance for its employees through a New York contract. When he retired, and subsequently relocated, his health benefits began to be provided through Medicare. His wife, however, remained employed with the agency, and was still covered under its health insurance policy.

Some time later, his wife developed [medical condition] and had to terminate her employment prior to the age at which she was entitled to social security benefits. After leaving her employment with the agency, and pursuant to N.Y. Ins. Law § 3221(m) (McKinney 2008), she continued as a participant on the agency’s policy. Although she is now eligible for “early” social security benefits, she will not be eligible for Medicare until she is 65. Accordingly, she desires to continue her group coverage for the maximum period.

The inquirer reports that despite a letter from his wife’s oncologist, the insurer has refused to consider her disabled and has insisted that she apply for social security disability benefits. Because she had not worked the requisite number of “quarters”, the federal Social Security Administration (SSA) initially refused to review her medical records and certify that she is disabled within its standards.

Subsequent to the inquiry, the SSA indicated that:

While this individual [the inquirer's wife] is not eligible for benefits, she is found to be disabled as of December 10, 2006 under Title II and Title XVI criteria of the Social Security Act.


Because of the number of employees at her employment, the inquirer’s wife is not protected by the continuation requirements of the federal Comprehensive Omnibus Budget Reconciliation Act (COBRA), codified at 29 U.S.C. §§ 1161 through 1165, which only covers employers with more than 20 employees. See Insurance Law § 3221(m)(6). Therefore, New York’s continuation requirements apply.

Insurance Law § 3221(m)(1) and (4), which are relevant to the inquiry, set forth the maximum periods for continuation of group coverage. Insurance Law § 3221(m)(1) provides:

Continuation shall cease on the date which the employee, member or dependent first becomes, after the date of election: (A) entitled to coverage under title XVIII of the United States Social Security Act (Medicare) as amended or superseded . . .

Insurance Law § 3221(m)(4) reads in pertinent part as follows:

Subject to paragraph one of this subsection, continuation of benefits under the group policy for any person shall terminate at the first to occur of the following: . . . (D) In the case of an employee or member who is determined, under title II or title XVI of the Social Security Act, to have been disabled at the time of termination of employment or membership or at any time during the first sixty days of continuation of coverage, the date twenty-nine months after the date the employee's or member's benefits under the policy would otherwise have terminated because of termination of employment or membership; provided, however, that if such employee or member is no longer disabled . . . .

Social Security Retirement and Disability Benefits are regulated under Title II of the Social Security Act, codified at 42 U.S.C. §§ 401 through 434 (West 2004). Disability, for social security purposes, is defined in 42 U.S.C. § 423(d) as follows:

(1) The term "disability" means--(A) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months . . . .

(2) For purposes of paragraph (1)(A)--(A) An individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work. For purposes of the preceding sentence (with respect to any individual), "work which exists in the national economy" means work which exists in significant numbers either in the region where such individual lives or in several regions of the country.

In short, the terms “disabled” or “disability” are not generally defined in the Insurance Law, and insurers generally are free, subject to approval of their policy forms by the Insurance Department, to define those terms in their insurance policies and contracts. With respect to continuation of group health insurance coverage, the New York State Legislature has by implication adopted the definition utilized by the SSA.

It would appear that, because the SSA certified the inquirer’s wife as disabled, the insurer should continue the policy for the full 29 month period required by Insurance Law § 3221(m)(4). A copy of this letter is being forwarded to the insurer, which should, within 10 days of receipt, confirm its compliance to the undersigned in writing.

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