The Office of General Counsel issued the following opinion on February 20, 2003, representing the position of the New York State Insurance Department.
Employee Welfare Funds, Womens Health Statute
Issue
Is an employee welfare fund registered with this Department in accordance with New York Insurance Law Article 44 (McKinney 2000) required to comply with the Womens Health and Wellness Act of 2002 (Act), 2002 N.Y. Laws 554?
Conclusion
Such funds are not subject to the Act.
Facts
The inquirers firm represents a number of school districts on Long Island that contribute to employee welfare funds that have been registered with this Department in accordance with New York Insurance Law Article 44. The inquirer inquires as to how to advise the firms clients concerning the new legislation.
Analysis
The Act, inter alia: (1) added New York Insurance Law §§ 3217-c (McKinney 2003 Supplement) and 4306-b (McKinney 2003 Supplement) to require direct access to obstetric and gynecological care in policies and contracts issued by commercial insurers and Health Service Corporations respectively, (2) amended New York Insurance Law §§ 3221(l)(11) (McKinney 2000 and 2003 Supplement) and 4303(p) (McKinney 2000 and 2003 Supplement) to increase coverage for mammograms, (3) amended New York Insurance Law §§ 3221(k) (McKinney 2000 and 2003 Supplement), 4303 (McKinney 2000 and 2003 Supplement), and 4322 (McKinney 2000 and 2003 Supplement) to require coverage for detection and treatment of osteoporosis, and (4) amended New York Insurance Law §§ 3221(l) and 4303 to require coverage of contraceptive drugs and devices. Section 18 of the Act provided:
This act shall take effect on the first of January next succeeding the date on which it shall have become a law [January 1, 2003] and shall apply to all policies issued, renewed, modified or altered on or after such date.
New York Insurance Law Article 44 does not impose any substantive coverage requirements on employee welfare funds. Accordingly, those funds to which the inquirers clients contribute need not comply with the Act.
Employer provided health benefits are encompassed within the ERISA definition of employee welfare benefit plans. 29 U.S.C.A. § 1002(1) (West 1999). While state regulation of such employee welfare benefit plans is preempted by ERISA, 29 U.S.C.A. § 1144(a) (West 1999), a state may validly require that specified benefits are provided in health insurance policies and contracts, notwithstanding that this indirectly affects employee welfare benefit plans. Metropolitan Life Insurance Company v. Massachusetts, 471 U.S. 724 (1985). Accordingly, those employee welfare benefit plans that have purchased New York insurance policies and contracts must fully comply with the Act.
While ERISA does cover most employee welfare benefit plans, two types of plans are excluded from ERISA coverage, governmental plans and church plans. 29 U.S.C.A. § 1003(b) (West 1999). A governmental plan is defined, 29 U.S.C.A. § 1002(32):
The term governmental plan means a plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing. . . .
Those employee welfare funds presently registered in accordance with New York Insurance Law Article 44 are governmental plans within the meaning of the above definition. Accordingly, had New York Insurance Law Article 44 required compliance with the Act, it would not have been preempted by ERISA.
For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.