The Office of General Counsel issued the following opinion on October 5, 2004, representing the position of the New York State Insurance Department.
Re: Information Requested by Insurer
May an insurer ask a prospective insured to provide information concerning whether the insureds employees have other health insurance coverage?
There is nothing in the New York Insurance Law or the Regulations promulgated pursuant thereto which would preclude the insurer from doing so.
A company employs approximately 20 people and has applied for a group policy with an authorized New York insurer to provide health insurance for 5 of those employees. The company does not provide health insurance for the other 15 employees because they have other coverage. The insurer asked the company to provide specific information concerning these other 15 individuals health coverage, including the name of the carriers. The company believes that its representation that the other 15 employees have coverage elsewhere should be sufficient and that it is the companys privacy right not to provide this information.
N.Y. Ins. Law § 4235(c)(1)(A) (McKinney Supp. 2004) provides:
No policy of group accident, group health or group accident and health insurance shall be delivered or issued for delivery in this state unless it conforms to one of the following descriptions:
(A) A policy issued to an employer or to a trustee or trustees of a fund established by an employer, which employer or trustee or trustees shall be deemed the policyholder, insuring with or without evidence of insurability satisfactory to the insurer, employees of such employer, and insuring, except as hereinafter provided, all of such employees or all of any class or classes thereof determined by conditions pertaining to the employment or a combination of such conditions and conditions pertaining to the family status of the employee, for insurance coverage on each person insured based upon some plan which will preclude individual selection. However, such a plan may permit a limited number of selections by employees if the selections offered utilize consistent plans of coverage for individual group members so that the resulting plans of coverage are reasonable. The premium for the policy shall be paid by the policyholder, either from the employer's funds, or from funds contributed by the insured employees, or from funds contributed jointly by the employer and employees. If all or part of the premium is to be derived from funds contributed by the insured employees, then such policy must insure not less than fifty percent of such eligible employees or, if less, fifty or more of such employees.
As stated above, if the insured employees are contributing all or part of the premium for the health insurance coverage, the insurer has to determine that it is meeting the minimum participation requirements provided for in the statute.
Although the Department has promulgated a privacy regulation, N.Y. Comp. Codes R. & Regs. tit.11, §§ 420.0 420. 25 (2002) (Reg. 169), that regulation pertains to the information that a licensee of the Department, including an insurer, can disclose concerning its consumers and customers. It does not pertain to the information that an insurer can request from individuals when underwriting a policy. Accordingly, this office is unable to refer the company to any provision of the New York Insurance Law or the Regulations promulgated pursuant thereto for it to rely on in questioning the amount of information that the insurer is requesting from the company.
For further information you may contact Supervising Attorney Joan Siegel at the New York City Office.