With the activation of U. S. military personnel (many of whom are
New Yorkers) for service both overseas and to protect our homeland, concerns regarding the
continuation of insurance coverage for affected individuals have been raised. Given the
situation, the purpose of this Circular Letter is to remind insurers, Article 43
Corporations and Health Maintenance Organizations (HMOs) of their obligations under the
New York Insurance Law to afford such military personnel special rights of conversion,
continuation and suspension of health insurance coverage. These protections are in
addition to the rights of continuation and conversion otherwise available pursuant to the
Insurance Law. I. Individual Coverage Issued
Pursuant to Sections 3216 or 4304 of the Insurance Law.
Members of the Reserves, including the National Guard, who
hold individual health insurance policies, and who enter active duty or have their active
duty extended, are afforded supplemental rights to suspend their coverage during such
period of active duty. Commercial insurers should consult Section 3216(c)(13) and (14) of
the Insurance Law for the details of these rights. Article 43 Corporations and HMOs should
consult Section 4304(i) and (j) of the Insurance Law. In general, the law provides for the
following:
- Upon written request, affected individuals are entitled to
have coverage suspended during a period of active duty. Furthermore, insurers, Article 43
Corporations and HMOs must refund any unearned premiums for the period of such suspension.
- Upon termination of active duty affected individuals are
entitled to resume their coverage. The affected individual must make a written request to
resume the coverage and remit the required premium within sixty days of termination of
active duty. The resumption of coverage must be with no limitations or conditions imposed
as a result of such active duty. However, limitations may be imposed with respect to
conditions that arose during active duty and are determined by the Secretary of Veterans
Affairs to have been incurred in the line of duty. In addition, if there was a waiting
period in place at the time of call to active duty which had not been satisfied, the
waiting period balance may be imposed.
- Resumption of suspended coverage must be retroactive to the
date of termination of active duty.
II. Group Coverage Issued Pursuant to Sections 3221 or 4305
of the Insurance Law.
Members of the Reserves, including the National Guard, who
are covered under group policies, and who enter active duty or have their active duty
extended, are afforded supplemental rights to continue, convert and/or suspend their
coverage. Commercial insurers should consult Sections 3221(n) and (o) of the Insurance Law
for the details of these rights. Article 43 Corporations and HMOs should consult Sections
4305(g) and (h) of the Insurance Law. In general, the law provides for the following:
- An affected individual called to active duty may elect to
continue his or her group coverage, including family coverage, by making a written request
and paying to the group policyholder up to 100% of the premium for the coverage.
- If an affected individual does not elect continuation
rights, group coverage is suspended while the affected individual is on active duty. (It
should be noted that an employer may treat affected individuals as active employees to
maintain coverage under the employer’s group plan.)
- If an affected individual elects continuation of coverage,
or if coverage is suspended, and the affected individual dies while on active duty, the
surviving spouse and children are entitled to conversion rights. Conversion rights are
also available to children upon reaching age limitations for dependent status.
Furthermore, conversion rights are also available upon divorce or annulment if occurring
while on active duty.
- Continuation is not available for those who become covered
or could be covered by Medicare or other group coverage (except for that available to
active duty members of the uniformed services).
- Affected individuals who return to work after active duty
are entitled to resume participation under the employer’s plan without the imposition
of limitations or conditions. However, limitations may be imposed with respect to
conditions that arose during active duty and are determined by the Secretary of Veterans
Affairs to have been incurred in the line of duty. In addition, if there was a waiting
period in place at the time of call to active duty which had not been satisfied, the
waiting period balance may be imposed.
- For affected individuals who opted for suspension of group
coverage and return to employment, coverage is retroactive to the effective date of
termination of active duty.
- For affected individuals who do not return to employment
upon return to civilian status, the Reservist is entitled to the standard conversion and
continuation rights provided by Sections 3221(e) and (m) or 4305(d) and (e) of the
Insurance Law.
Please direct all inquiries concerning this Circular Letter to
Thomas Fusco, Associate Insurance Attorney, Health Bureau, New York State Insurance
Department, One Commerce Plaza, Albany New York 12257 or by e-mail at tfusco@ins.state.ny.us.
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