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 December 18, 2006 representing the position of the New York State Insurance Department.

Inquiry

In the factual situation below, if the workers’ compensation insurer and the accident and health insurer both claim the other insurer is primary, which insurer is responsible for the claim?

Conclusion

The accident and health insurer should pay the claim in accordance with the policy provisions, subject to possible reimbursement from the workers’ compensation insurer.

Facts

An inquirer asked about a situation where an individual is hospitalized purportedly as a result of an industrial accident and the claim is denied by the accident and health insurer because it asserts that the workers’ compensation insurer is responsible. When the claim is submitted to the workers’ compensation insurer, it disclaims, contending that the hospitalization was not due to a compensable injury.

Analysis

New York Workers’ Compensation Law § 13 (McKinney 2005) requires that the employer, either directly or through an insurer, provide medical care to an employee injured in a compensable accident. Accordingly, the workers’ compensation insurer would be the responsible insurer. That situation is recognized by the Insurance Department in § 52.16(c) of N.Y. Comp. Codes R. & Regs. tit 11Pt. 52, (Regulation 62):

No policy shall limit or exclude coverage by type of illness, accident, treatment or medical condition, except as follows: . . .(8) . . . benefits provided under Medicare or other government program. . . any State or Federal workers' compensation, employers' liability or occupational disease law; . . . (emphasis added)

The exclusion for workers’ compensation benefits in N.Y. Comp. Codes R. & Regs. tit 11, § 52.16(c)(8) was specifically drafted by the New York Insurance Department to be predicated upon the provision of such benefits, not merely eligibility for workers’ compensation benefits. The placement of an exclusion for workers’ compensation benefits in an accident and health insurance policy is discretionary with the health insurer. If such a provision is not included, the health insurer would be required to pay a claim, irrespective of the possible existence of benefits under the New York Workers’ Compensation Law.

A situation where the workers’ compensation insurer denies the existence of a compensable injury is governed by New York Workers’ Compensation Law § 13(d):

(1) In the event that an insurer or health benefits plan makes payments for medical and/or hospital services for or on behalf of an injured employee they shall be entitled to be reimbursed for such payments by the carrier or employer within the limits of the medical and hospital fee schedules if the [workers’ compensation] board determines that the claim is compensable. . . . Notwithstanding any other provision of law, in no event shall the carrier or employer be required to reimburse the insurer or health benefits plan in an amount greater than the amount paid for medical and hospital services for or on behalf of the injured employer by such corporation or company; provided, however, if the carrier or employer does not reimburse the insurer or health benefits plan within thirty days after the board determines that the claim is compensable, the carrier or employer shall reimburse the insurer or health benefits plan at the amount the carrier or employer would be obligated to reimburse the hospital or other provider of medical services if the carrier or employer made payment directly to the provider of medical and/or hospital services pursuant to this chapter . . . . Upon reimbursement to the insurer or health benefits plan pursuant to this subdivision, the carrier or employer shall be relieved of liability for the medical and/or hospital services for which payment has been made by the insurer or health benefits plan.

(2) An insurer or health benefits plan entitled to reimbursement pursuant to paragraph one of this subdivision shall receive copies of the hearing and decision notices and shall develop with the carrier or employer its own mechanisms and standard operating procedures for payment of undisputed claims for reimbursement. In cases of disputed claims for reimbursement that are filed with the board within three years of the date of payment for services rendered by the health care provider . . . the sole remedy of the insurer or health benefit plan to recover on a claim arising pursuant to this subdivision shall be the submission of the controversy to mandatory arbitration or other alternative dispute resolution procedures as defined by rules and regulations promulgated by the chair [of the Workers’ Compensation Board] . . . .

The procedures contemplated by New York Workers’ Compensation Law § 13(d)(2) are found in N. Y. Comp. Codes R. & Regs. tit. 12, Part 325-5 (2000).

Any questions as to whether an accident is compensable under the New York Workers’ Compensation Law, they should be addressed to:

New York State Workers’ Compensation Board
20 Park Street
Albany, NY 12207.

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