New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on September 7, 2001, representing the position of the New York State Insurance Department.

Re: Domestic Partner Eligibility

Questions Presented:

1. Is proof of financial interdependence a necessary criterion for domestic partnership eligibility in New York State?

2. Must the Insurance Department review all affidavits of domestic partnership prior to their use by each insurer for the purpose of establishing domestic partnership eligibility?

3. Can insurers cede to employer groups the responsibility of determining whether a domestic partner is eligible for coverage?

Conclusion:

1. Yes. Proof of financial interdependence is a necessary criterion for domestic partnership eligibility in New York State.

2. No. It is not necessary for the Insurance Department to review all affidavits of domestic partnership prior to their use by each insurer for the purpose of establishing domestic partnership eligibility, so long as the complete terms and conditions of eligibility are stated in each contract or rider.

3. No. Insurers may not cede to employer groups the ultimate responsibility of determining whether a domestic partner is eligible for coverage.

Facts:

A Health Maintenance Organization (HMO) is concerned with the present procedure for the enrollment of domestic partners and requests that the Department interpret the Insurance Law differently. It requests that the Department do the following, and states:

Remove the requirement to demonstrate proof of financial interdependence, especially since it is not required for married couples.

Remove the requirement that [Insurance Department] reviewed affidavits must be used so that employer groups can use their own forms.

Allow the employer groups to determine domestic partner eligibility, subject to health plan access and review in situations where there is a question of eligibility.

Analysis:

Question 1:

Proof of financial interdependence is a necessary criterion for domestic partnership eligibility in New York State.

The Insurance Law treats the issue of dependent’s or family coverage in four different ways, depending upon the type of insurer (commercial or non-profit) and type of policy (group or individual).

For group policies by a commercial insurer, N.Y. Ins. Law § 4235(f) (McKinney 2000) provides that benefits can cover specified expenses of "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 . . . ." (emphasis added).

For group policies by a non-profit insurer, N.Y. Ins. Law § 4305(c) (McKinney 2000) provides that benefits can cover members of a covered group "for himself, his spouse, his child or children, or other persons chiefly dependent upon him for support and maintenance . . . ." (emphasis added). In accordance with N.Y. Public Health Law § 4406(1) (McKinney 1985 & Supp. 2001), contracts of HMO’s are governed by this requirement.

For an individual commercial policy, N.Y. Ins. Law § 3216(c)(3) (McKinney 2000) permits the policy to insure "members of a family," which section 3216(a)(3) defines as husband, wife, dependent children "or any other person dependent upon the policyholder." (emphasis added).

Thus, the Department could not, under existing law, remove the requirement to demonstrate proof of financial interdependence for domestic partners, as you request. Therefore, where coverage may be extended to those "dependent" or "chiefly dependent" upon the insured (i.e., in the case of group policies written by either a commercial or non-profit insurer, or of individual policies written by a commercial insurer), the Department would approve coverage for domestic partners able to demonstrate the requisite dependency.

The term "dependency" includes both situations of unilateral dependency and mutual interdependence, which may be evidenced by a nexus of factors, such as common ownership of property, common householding, shared budgeting, length of the relationship, etc. The presence or absence of any one factor would not be dispositive.

However, for an individual policy issued either by a non-profit Article 43 company or any HMO, N.Y. Ins. Law § 4304(d)(1) (McKinney 2000) permits a "family contract" under which expenses are paid on behalf of a "husband and wife, or husband, wife and their dependent child or children, or any child or children not over nineteen years of age . . . ." Thus, this statute limits coverage to husband, wife, dependent children, or any child not over nineteen years of age. Coverage under this section may not be extended to domestic partners.

Question 2:

It is not necessary for the Insurance Department to review all affidavits of domestic partnership prior to their use by each insurer for the purpose of establishing domestic partnership eligibility, so long as the complete terms and conditions of eligibility are stated in the contract or rider.

In the past, this HMO has submitted to the Department each employer group’s affidavit for approval. This would still be the case if the HMO continues its practice of not setting forth the complete terms and conditions of eligibility in the contract or rider and incorporates the terms and conditions of the affidavit by reference.

N.Y. Ins. Law § 3204(a) (McKinney 2000) states, in relevant part:

Every policy of life, accident or health insurance, or contract of annuity, delivered or issued for delivery in this state, shall contain the entire contract between the parties, and nothing shall be incorporated therein by reference to any writing, unless a copy thereof is endorsed upon or attached to the policy or contract when issued. (emphasis added).

No application for the issuance of any such policy or contract shall be admissible in evidence unless a true copy was attached to such policy or contract when issued.

Since N.Y. Ins. Law § 3201(a) (McKinney 2000) would encompass the affidavit within the definition of policy form and § 3201(b)(1) requires approval of all policy forms, if the HMO continues to incorporate the affidavit by reference, it will have to continue to submit such affidavits for approval.

Question 3:

Insurers may not cede to employer groups the ultimate responsibility of determining whether a domestic partner is eligible for coverage. This should not be construed to prohibit an insurer or HMO from delegating some responsibility to the employer group to determine which employees and dependents, including domestic partners, are eligible for coverage under the employer's group health plan, provided that the employer group is using the eligibility criteria of the HMO or insurer. The ultimate responsibility and authority of ensuring that only eligible persons recognized by the Insurance Law are covered under the contract continues to reside with the insurer or HMO.

For further information, you may contact Senior Attorney Meredith S. Kaufer at the New York City Office.