The Office of General Counsel issued the following opinion on September 22, 2004, representing the position of the New York State Insurance Department.
Re: Reliance on Insurers Website Description of Benefits
Would the description of the benefits in a health insurers certificate of the benefits provided under a group policy or contract prevail over a description of benefits contained on the insurers website?
The description in the insurers certificate would prevail over a description contained on the insurers website.
The inquirers firm is licensed, among other functions, as a life & health insurance agent, in accordance with New York Insurance Law § 2103(a) (McKinney 2000 and 2004 Supplement), and as an insurance consultant, in accordance with New York Insurance Law § 2107(a) (McKinney 2000). One of the inquirers firms clients purchased a group contract from a Health Maintenance Organization holding a Certificate of Authority from the Commissioner of Health in accordance with New York Public Health Law § 4403(1) (McKinney 2002)
Since the contract in question is to cover the inquirers clients employees, it is also subject to regulation under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.A. § 1001 et seq (West 1999 and 2003 Supplement), as evidence of coverage for a employee welfare benefit plan, as that term is defined in ERISA. 29 U.S.C.A. § 1002(1) (West 1999). The inquirers client intended to utilize the certificate issued by the HMO as the required Summary Plan Description, as that term is defined in ERISA. 29 U.S.C.A. § 1022(b) (West 1999):
The summary plan description shall contain the following information: The name and type of administration of the plan; in the case of a group health plan, . . . whether a health insurance issuer . . . is responsible for the financing or administration (including payment of claims) of the plan and (if so) the name and address of such issuer; the name and address of the person designated as agent for the service of legal process, if such person is not the administrator; the name and address of the administrator; names, titles and addresses of any trustee or trustees (if they are persons different from the administrator); . . . the plan's requirements respecting eligibility for participation and benefits; . . circumstances which may result in disqualification, ineligibility, or denial or loss of benefits; . . . the procedures to be followed in presenting claims for benefits under the plan including the office at the Department of Labor through which participants and beneficiaries may seek assistance or information regarding their rights under this Act and the Health Insurance Portability and Accountability Act of 1996 with respect to health benefits that are offered through a group health plan . . . and the remedies available under the plan for the redress of claims which are denied in whole or in part (including procedures required under section 503 of this Act.
Since the HMO did not promptly furnish the certificates, it established on its website, for the use of the inquirers clients employees, what it described as "[Client] Summary of Benefits." This document included the following language:
This document is not a contract. It is only a summary of your coverage under the [HMO Plan]. Please read your HMO Certificate and your Supplemental Certificate for a full description of your Covered Services, exclusions and other terms and conditions of coverage.
In addition, the HMO posted on its website what it described as "[Client] Summary of Coverage" without any similar disclaimer.
With respect to out-patient mental health services, the Summary of Benefits indicated that, while in network treatment was subject to a $30 copay per visit, out of network treatment was subject to the deductible and a 50% coinsurance. This same information was conveyed in the Summary of Coverage.
Some time later, the HMO issued certificates. The certificate issued to at least one subscriber provided that for out of network out-patient mental health services treatment was subject to a $30 copay. This employee expects the HMO to honor the certificate and only require the $30 copay. The HMO has indicated that an incorrect certificate was issued in error and that, until it issues corrected certificates, the information on the website is binding and should prevail.
The inquirers firm, on behalf of its client, questions the HMOs contention.
The regulation of HMOs is bifurcated between the Health Department, which regulates quality of care, and the Insurance Department, which, in accordance with New York Public Health Law § 4406(1) (McKinney 2002), regulates the HMOs subscriber contracts as if they were subscriber contracts of not-for-profit health insurers.
With respect to not-for-profit health insurers, New York Insurance Law § 4308(a) (McKinney 2000) provides:
No corporation subject to the provisions of this article shall enter into any contract unless and until it shall have filed with the superintendent a copy of the contract or certificate and of all applications, riders and endorsements for use in connection with the issuance or renewal thereof, to be formally approved by him as conforming to the applicable provisions of this article and not inconsistent with any other provision of law applicable thereto. . . .
New York Insurance Law § 3201(a) & (b) (McKinney 2000 and 2004 Supplement) imposes similar requirements for policies and certificates of commercial health insurance.
It is the Insurance Departments position that, as between the master policy or contract issued to the employer and the certificate, the master policy or contract should prevail. It is also the Insurance Departments position that, as clearly indicated by the HMO on its website, the binding document, which would prevail, as between the certificate and the description on the website, is the certificate as approved by the Department.
Questions concerning ERISA, including any liability because of the late delivery of the certificate/SPD, should be addressed to:
Employee Security Benefit Administration
United States Department of Labor
33 Whitehall Street
New York, NY 10004.
For further information one may contact Principal Attorney Alan Rachlin at the New York City Office.