OGC Opinion No. 09-06-04: Accident and Health Insurance and Work-Related Injury

OGC Op. No. 09-06-04

The Office of General Counsel issued the following opinion on June 5, 2009, representing the position of the New York State Insurance Department.

RE: Accident and Health Insurance and Work-Related Injury

Question Presented:

After acceptance by all necessary parties of a New York Workers’ Compensation Law § 32 (McKinney Supp. 2009) lump-sum waiver agreement, is an insured’s health insurance plan obligated to pay future medical expenses arising from the insured’s original injury?

Conclusion:

No. Section 52.16(c)(8) of 11 NYCRR 52 (Regulation 62) permits a health insurer to exclude benefits provided under a workers’ compensation policy.

Facts:

The inquirer’s law firm represents a municipal cooperative health benefit plan organized under Article 47 of the New York Insurance Law. An insured covered under such a plan sustained a work-related injury for which she received workers’ compensation benefits, which included payment of her medical bills. She entered into a lump-sum settlement with her employer in 1996 that did not include the right to receive payment for future medical expenses.

In the past year, the insured sought medical treatment for that work-related injury, and submitted bills to the health benefit plan for payment. The health benefit plan rejected her claims, and thereafter she appealed to the plan, arguing that since the workers’ compensation case settled and closed, the plan is responsible to pay the medical bills.

As reported in the inquirer’s letter dated May 4, 2009, the health insurance policy at issue here includes an exclusion for injuries covered under workers’ compensation that reads as follows:

The following are examples of health care services and items that are not Covered Services. . .

(3) Any condition, disease, ailment or accidental injury for which benefits are available under a Workers’ Compensation Act or similar legislation, whether or not the Covered Person claims compensation or receives benefits for services thereunder and whether or not any recovery is had by the Covered Person against a third party. . . .

The inquirer asks whether the policy exclusion is applicable to the circumstances presented.

Analysis:

Workers’ Compensation Law § 11 provides that where an injury occurs that arises out of employment, the Workers’ Compensation Law provides the sole and exclusive remedy against the employer. Nevertheless, the employee still may seek coverage under a health insurance policy where the workers’ compensation insurer determines that the injury is not a compensable injury. See Opinion of Office of General Counsel dated December 18, 2006.

An Article 47 health plan such as the one inquired about is subject to 11 NYCRR Part 52 (Regulation 62). See N.Y. Ins. Law § 4709(b) (McKinney 2007). Although an accident and health insurer is generally responsible to pay the medical expenses of its insured, there are exceptions set forth in Regulation 62. One is set forth in 11 NYCRR § 52.16(c)(8), and reads as follows:

No policy shall limit or exclude coverage by type of illness, accident, treatment or medical condition, except as follows:. . . (8) . . . benefits provided under Medicare or other governmental program. . . , any State or Federal workers’ compensation, employers’ liability or occupational disease law;…

Thus, a health insurance policy - such as the one at issue here - may lawfully limit coverage where benefits are provided pursuant to a workers’ compensation law, whether the workers’ compensation benefits are paid periodically or in a lump-sum settlement. Accordingly, the health plan here may lawfully deny benefits for medical expenses related to a workers’ compensation injury.