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

David A. Paterson
Governor

Eric R. Dinallo
Superintendent

The Office of General Counsel issued the following opinion on April 23, 2008 representing the position of the New York State Insurance Department.

Re: Minimum period of enrollment requirements for continuation coverage

Question Presented:

Does either COBRA, N.Y. Ins. Law § 3221(m) (McKinney Supp. 2008), or Insurance Law § 4305(e), require a minimum period of enrollment in a group health plan before the initiation of coverage thereunder?

Conclusion:

No. There is no minimum period of enrollment in a group health plan required for the initiation of insurance coverage under either COBRA, Insurance Law § 3221(m) or Insurance Law § 4305(e).

Facts:

The inquiry is general in nature, without reference to particular facts.

Analysis:

Continuation requirements under federal COBRA and the laws of New York require certain employers, and other group insurance providers, to continue to provide insurance coverage to covered individuals following the occurrence of a “qualifying event.” See Office of General Counsel Opinion 07-09-05 (Sept. 6, 2007). Employers are subject to either COBRA or requirements of continuation of coverage under New York law. New York continuation rules generally apply; however, employers who are subject to COBRA requirements are exempt from providing continuation coverage under the laws of New York.

Comprehensive Omnibus Budge Reconciliation Act of 1986

COBRA, which is codified in 29 USC §§ 1161 et. seq. (West 2008), establishes no period of coverage requirement prior to the statute’s applicability. Additionally, to read in such a requirement would seem inconsistent with 29 USC § 1161(a), which provides:

The plan sponsor of each group health plan shall provide, in accordance with this part, that each qualified beneficiary who would lose coverage under the plan as a result of a qualifying event is entitled, under the plan, to elect, within the election period, continuation coverage under the plan.

COBRA distinguishes between employees who are covered prior to a “qualifying event” and employees who are not covered prior to a qualifying event. Under COBRA however, the status of an employee and employee’s qualified beneficiaries – in regards to access to health insurance benefits – must continue unaltered following a “qualifying event” if the qualified beneficiary elects to continue such coverage.

As a federal program, COBRA falls under the purview of the United States Department of Labor. Thus, for a definitive answer as to the application of COBRA, please direct your inquiry to that federal agency.

New York Continuing Coverage

Insurance Law §§ 3221(m) and 4305(e) require group health policies that fall under the purview of Articles 32 or 43 of the Insurance Law to provide continuing insurance coverage following a qualifying event, such as the termination of employment or membership in a group health policy. To be eligible for continuing insurance, a beneficiary must be enrolled in a group health plan prior to the occurrence of a qualifying event; however, neither Insurance Law § 3221(m) nor Insurance Law § 4305(e) requires an employee or member of a group health policy to be enrolled in a group health plan for a minimum period prior to the statute’s application. Insurance Law § 3221(m) reads, in part, as follows:

A group policy providing hospital, surgical or medical expense insurance for other than accident only shall provide that if all or any portion of the insurance on an employee or member insured under the policy ceases because of termination of employment or membership in the class or classes eligible for coverage under the policy, such employee or member shall be entitled without evidence of insurability upon application to continue his hospital, surgical or medical expense insurance for himself or herself and his or her eligible dependents, subject to all of the group policy's terms and conditions applicable to those forms of benefits and to the following conditions…

Insurance Law § 4305(e) reads, in part, as follows:

In addition to the conversion privilege afforded by subsection (d) of this section, a group contract issued by a hospital service, health service or medical expense indemnity corporation shall provide that if all or any portion of the insurance on an employee or member insured under the policy ceases because of termination of employment or membership in the class or classes eligible for coverage under the policy, such employee or member shall be entitled without evidence of insurability upon application to continue his insurance for himself or herself and his or her eligible dependents, subject to all of the group contract's terms and conditions applicable to those forms of benefits and to the following conditions…

Thus, pursuant to Insurance Law §§ 3221(m) and 4305(e), a beneficiary who is covered by the group health plan prior to a qualifying event must be provided the opportunity to continue coverage without evidence of insurability, provided that the beneficiary qualifies and adheres to the conditions set forth under the applicable section. Neither statute sets forth a minimum period of enrollment in a group health plan for continuation coverage.

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