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

OGC Op. No. 08-08-04

The Office of General Counsel issued the following opinion on August 25, 2008 representing the position of the New York State Insurance Department.

Re: Health Insurance, Pre-Certification

Question Presented:

If a health insurer, in response to a pre-procedure inquiry, indicates to an insured that a particular procedure does not require pre-certification, is the insurer precluded from later denying coverage after the procedure is conducted?

Conclusion:

Because the coverage in question is under a New Jersey issued group insurance contract, that state’s law applies. Further, New York’s external appeals procedure, N.Y. Ins. Law Article 49 (McKinney 2008), does not apply under the circumstances described. The query should be directed to the New Jersey Insurance Department.

Facts:

The inquirer reports that he is covered under a group policy or contract issued to his employer, which is located in New Jersey, by an insurer. Some time in 2007, he inquired of Insurer whether a pre-certification was required for particular radiologic diagnostic procedure. He further reports that when Insurer answered in the negative, he underwent the procedure, and submitted a bill to Insurer.

Insurer initially notified him that his appeal rights were governed by New York law. By notice of July 11, 2008, after submitting his opinion request to the Department, he filed an external appeal pursuant to Insurance Law § 4910. Upon receipt of the external appeal, Insurer notified this Department that he is covered under a policy subject to the laws of New Jersey. Subsequently, by a corrective letter of July 15, 2008, Insurer notified him of his New Jersey appeal rights.

Analysis:

Insurance Law § 3201, which is relevant to the inquiry, establishes the requirements for approval of health insurance policies in New York. Subsection (b)(1) of that statute further provides:

No policy form shall be delivered or issued for delivery in this state unless it has been filed with and approved by the superintendent as conforming to the requirements of this chapter and not inconsistent with law. A . . . group accident and health . . . certificate evidencing insurance coverage on a resident of this state shall be deemed to have been delivered in this state, regardless of the place of actual delivery, unless the insured group is of the type described in: . . . (B) section four thousand two hundred thirty-five except subparagraph (D) where the group policy is issued to a trustee or trustees of a fund established or participated in by two or more employers not in the same industry with respect to an employer principally located within the state, subparagraph (K), (L) or (M) of paragraph one of subsection (c) thereof; . . . and where the master policies or contracts were lawfully issued without this state in a jurisdiction where the insurer was authorized to do an insurance business. . . .

In addition, because the substantive requirements of the Insurance Law are applicable only to policies and contracts subject to approval in New York, the external appeal requirements of Insurance Law Article 49 apply only to insurance policies and contracts issued in New York. Because the policy issued to the inquirer's employer covers an employer-employee group, as is specifically authorized by Insurance Law § 4235(c)(1)(A), and excepted from New York requirements by Insurance Law § 3201(b)(1), the certificate issued to the inquirer is not subject to the New York Insurance Law.

It appears that the inquirer’s time to appeal pursuant to New Jersey laws runs from Insurer’s July 15, 2008 corrective letter. Any questions should be addressed to the New Jersey Insurance Department.

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