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

Andrew M. Cuomo
Governor

James J. Wrynn
Superintendent

OGC Op. No. 11-05-01

The Office of General Counsel issued the following opinion on May 3, 2011, representing the position of the New York State Insurance Department.

Re: Application of the Coordination of Benefits Provision to the Mandatory Maternity Coverage Period

Questions Presented:

1. Does the coordination of benefits provision set forth in Section 52.23 of N. Y. Comp. Codes R. & Regs. (“NYCRR”) tit. 11, Pt. 52 (2009) (Regulation 62) apply during the mandatory maternity coverage period pursuant to New York Insurance Law §§ 3221(k)(5)(A)(i) and 4303(c)(1)(A) (McKinney 2006 and 2010 Supplement), where the newborn infant is covered as a dependent under both the mother’s group plan and the father’s group plan during the mandatory maternity coverage period, but will not be added to the mother’s policy after the mandatory maternity coverage period expires?

2. If the coordination of benefits provision applies, would the “birthday rule” set forth in 11 NYCRR § 52.23(n)(3)(ii)(a) be applied to determine which plan is primary?

Conclusions:

1. Yes. The coordination of benefits provision set forth in Regulation 62 is applicable, but only during the limited mandatory maternity coverage period where the newborn is a dependent under both parents’ group plans.

2. Yes. The birthday rule would be applicable to determine which parent’s group plan would be primary.

Facts:

The inquirer is an attorney representing various health insurance companies in coordination-of-benefit services matters. The inquirer asks generally whether the mandatory maternity coverage of a newborn infant as set forth in Insurance Law §§ 3221(k)(5)(A)(i) and 4303(c)(1)(A) is subject to coordination of benefits if the newborn is also covered as a dependent under another group plan, and both policies contain coordination of benefit provisions. 1 The inquirer provided the following scenario:

The newborn is NOT a named dependent on the mother’s group plan, however, this plan is providing coverage for the first 48 hours per the maternity coverage requirement. The newborn IS a named dependent (from the moment of birth) on the father’s group plan, and the father’s birthday is earlier in the year than the mother’s.

The inquirer asks whether the birthday rule would apply in determining which group plan is primary.

Analysis:

1. Maternity Care Coverage

Insurance Law §§ 3221(k)(5)(A)(i) and 4303(c)(1)(A), which require every policy that provides hospital, surgical or medical coverage, to also provide maternity care coverage, are relevant to the inquiry. Insurance Law § 3221(k)(5)(A)(i), which governs group and blanket accident and health insurance policies, states, in pertinent part, as follows:

Every group or blanket policy delivered or issued for delivery in this state which provides hospital, surgical or medical coverage shall include coverage for maternity care, including hospital, surgical or medical care to the same extent that coverage is provided for illness or disease under the policy. Such maternity care coverage, other than coverage for perinatal complications, shall include inpatient hospital coverage for mother and newborn for at least forty-eight hours after childbirth for any delivery other than a caesarean section, and for at least ninety-six hours after a caesarean section. . . .

Insurance Law § 4303(c)(1)(A), which governs insurance contracts issued by not-for-profit health and hospital service corporations, provides, in relevant part, as follows:

Every contract issued by a corporation subject to the provisions of this article which provides hospital service, medical expense indemnity or both shall provide coverage for maternity care including hospital, surgical or medical care to the same extent that hospital service, medical expense indemnity or both are provided for illness or disease under the contract. Such maternity coverage, other than coverage for perinatal complications, shall include inpatient hospital coverage for mother and for newborn for at least forty-eight hours after childbirth for any delivery other than a caesarean section, and for at least ninety-six hours following a caesarean section.

In the scenario above, although the newborn infant is covered as a dependent under the father’s group health plan as of the moment of birth, but will not be added to the mother’s group health plan, pursuant to the mandatory maternity coverage provision under the Insurance Law, if those policies provide hospital, surgical or medical coverage, they must provide coverage to the newborn infant as a dependent during the prescribed period set forth in the Insurance Law.

2. Coordination of Benefits

11 NYCRR § 52.23(n), which set forth the coordination of benefits rules, is also relevant to the inquiry. That provision states, in pertinent part, as follows:

(n) Order of benefit determination rules. (1) The primary plan must pay or provide its benefits as if the secondary plan or plans did not exist. A secondary plan may take the benefits of another plan into account only when, under these rules, it is secondary to another plan.

(2) When there is a basis for a claim under more than one plan, a plan with a coordination of benefits provision complying with this section is a secondary plan which has its benefits determined after those of the other plan, unless the other plan has a COB provision complying with this section in which event the order of benefit determination rules will apply.

(3) The order of benefit payments is determined using the first of the following rules which applies:

(i) the benefits of a plan which covers the person as an employee, member or subscriber (that is, other than as a dependent) are determined before those of a plan which covers the person as a dependent;

(ii) except as stated in subparagraph (iii) of this paragraph, when a plan and another plan cover the same child as a dependent of different persons, called parents:

(a) the benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan which covered the other parent for a shorter period of time . . . .

In order for the coordination of benefits rules to be applicable, a person must be covered by two or more group plans as defined in 11 NYCRR § 52.23(e). In this case, the newborn infant is covered under both the mother and the father’s group health plan during the mandatory maternity coverage period. As such, the coordination of benefits provision is applicable in determining the order of benefits to the newborn, but only for the 48 or 96-hour period during which the newborn infant has coverage under both parents’ group health plans.

With respect to the order in which benefits will be paid, the birthday rule set forth in 11 NYCRR § 52.23(n)(3)(ii)(a) shall apply because, in this scenario, the plans in question cover the same child as a dependent of the mother and the father. In this case, because the father’s birthday falls earlier in the year, his group plan will act as the primary plan in providing benefits to the newborn infant during the mandatory maternity coverage period. Thereafter, the coordination of benefits cease and the father’s group plan becomes the only plan under which the infant will be entitled to benefits.

For further information, you may contact Senior Attorney Camielle A. Barclay at the New York City office.

__________________________________________________________________________________________________________

1 Regulation 62 does not require that group health plans include a coordination of benefits provision. If a group plan does contain a coordination of benefits provision, however, the provision must comply with the regulation. However, any plan that does not include a coordination of benefits provision may not take into account the benefits of another plan when determining its obligations with respect to benefits. See 11 NYCRR § 52.23(c) (d).