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

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following opinion on May 20, 2005, representing the position of the New York State Insurance Department.

RE: Community Rated group health insurance Notification of employee’s termination

Question Presented

Is there a Department regulation or Insurance Law provision specifying the amount of notice that the group must provide the health insurance carrier to avoid being charged insurance premium to cover an employee who has terminated his employment?

Conclusion

No. There are no statutory or regulatory requirements in the New York Insurance Law or Department Regulations governing the issue. The language in the insurance policy in this matter controls.

Facts

The inquirer postulates about a group covered by a community-rated health insurance carrier. The inquirer has observed that nearly all such carriers require notification within 30 days of an employee’s termination of employment so that the group would not have to pay the subsequent health insurance premiums due on such employee. The inquirer has learned of one carrier that requires a 15-day notification period in order to avoid such payment of premium on a terminated employee.

Analysis

The amount of time a group has to notify the health insurance carrier in order to not be charged for such coverage after the employee leaves the job is controlled by the language in the health insurance policy, not by statute or regulation. It is the industry standard to permit a 30-day notice period but this period is based on custom and competitive factors and such period may differ among carriers.

For further information one may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.