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 October 12, 2005 representing the position of the New York State Insurance Department.

RE: Group Health Insurance, Domestic Partner Coverage.

Question Presented:

Must an insurer cover opposite sex domestic partners of a covered employee who desires such coverage?

Conclusion:

The decision to offer opposite sex domestic partner coverage and the extent of such coverage is a decision of the insured employer. Even if the employer desires to provide opposite sex domestic partner coverage, an insurer is not required to offer such coverage. However, if the insurer offers opposite sex domestic partner coverage to any "small group", it must offer such domestic partner coverage to all small groups.

Facts:

The inquirer as well as his employer are licensed as insurance agents pursuant to New York Insurance Law § 2103(a) (McKinney 2000 and 2005 Supplement). One of the inquirer's clients desires to provide opposite sex domestic partner coverage to its employees.

Analysis:

Coverage of employees by employers is authorized by New York Insurance Law § 4235(c)(1)(A) (McKinney 2000 and 2005 Supplement) through:

A policy issued to an employer . . . which employer . . . 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. . . . 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. . . .

In addition to policies issued directly to the employer, other subparagraphs of New York Insurance Law § 4235(c)(1) authorize policies issued to groups of employers or to labor unions. With respect to coverage of domestic partners, it would not make any difference if the policy is issued directly to the employer or to another entity.

New York Insurance Law § 4235(f)(1), regulating policies of commercial health insurers, provides:

Any policy of . . . group health . . . insurance may include provisions for the payment by the insurer of benefits for expenses incurred on account of hospital, medical or surgical care . . . for 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 . . . .

New York Insurance Law § 4305(c)(1) (McKinney 2000 and 2005 Supplement), regulating contracts of not-for-profit health insurers and all Health Maintenance Organizations, has similar language.

New York does not recognize common law marriage. New York Domestic Relations Law § 11 (McKinney 1999). However, under the New York Insurance Law (McKinney 2000 and 2005 Supplement) "chiefly dependent" standard, marriage is not a precondition to dependent coverage. Dependence includes both unilateral dependence and mutual interdependence, which may be evidenced by a nexus of factors, including common ownership of property, common house holding, shared budgeting or length of relationship. The registration of a domestic partnership, such as is authorized by New York City Administrative Code § 3-420 et seq. (1999), would constitute strong evidence of mutual interdependence.

Since coverage of dependents under group health insurance policy is permissive, not mandatory, either the employer or insurer is free to decide whether or not to provide opposite sex domestic partner coverage.

New York Insurance Law § 3231(a) (McKinney 2000 and 2005 Supplement), regulating policies of commercial health insurers, provides:

No . . . group health insurance policy covering between two and fifty employees or members of the group exclusive of spouses and dependents, hereinafter referred to as a small group, providing hospital and/or medical benefits . . . shall be issued in this state unless such policy is community rated and, notwithstanding any other provisions of law, the underwriting of such policy involves no more than the imposition of a pre-existing condition limitation as permitted by this article. Any . . . small group, including all employees or group members and dependents of employees or members, applying for . . . small group health insurance coverage . . . must be accepted at all times throughout the year for any hospital and/or medical coverage offered by the insurer to . . . small groups in this state. Once accepted for coverage, an individual or small group cannot be terminated by the insurer due to claims experience. . . . For the purposes of this section, ‘community rated’ means a rating methodology in which the premium for all persons covered by a policy or contract form is the same based on the experience of the entire pool of risks covered by that policy or contract form without regard to age, sex, health status or occupation.

New York Insurance Law § 4317(a) (McKinney 2000 and 2005 Supplement), regulating contracts of not-for-profit health insurers and all HMOs, contains an identical requirement.

Therefore, while an insurer is not required to offer coverage to opposite sex domestic partners, if it offers such domestic partner coverage to any small group, it must offer it to all small groups.

For further information you may contact Principal Attorney Alan Rachlin at the New York City office.