The Office of General Counsel issued the following opinion on July 19, 2004 representing the position of the New York State Insurance Department.
Re: Accident & Health Insurance, New York Mandated Benefits
1. May a commercial insurer issue an accident & health insurance policy that does not provide coverage for either in-patient or out-patient hospital care?
2. Is coverage of either in-patient or out-patient hospital care a condition precedent for the imposition of mandated benefits in accident & health insurance policies?
1. Such policies are authorized under the New York Insurance Law (McKinney 2000 and 2004 Supplement) as limited benefit health insurance.
2. There are several mandated benefits that do not require underlying coverage of either in-patient or out-patient hospital care.
The inquiry is general in nature. No specific facts were furnished.
Accident and health insurance is defined, New York Insurance Law § 1113(a)(3) (McKinney 2000 and 2004 Supplement):
"Accident and health insurance," means (i) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability benefits pursuant to article nine of the workers" compensation law . . . and (ii) non-cancellable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury (but excluding insurance solely against accidental injury) under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from its effective date or renewal date.
It is surmised that this inquiry is not concerned with that type of insurance described in New York Insurance Law § 1113(a)(3)(ii). When the inquirer uses the term "commercial insurer", it is surmised that the inquirer means any insurer issuing accident & health insurance policies, other than one licensed in accordance with New York Insurance Law Article 43 (McKinney 2000 and 2004 Supplement).
Descriptions of and requirements for the various types of health insurance have been set forth by the Department in N.Y. Comp. Codes R. & Regs. tit. 11, Part 52 (2002) (Regulation 62). Among the types of insurance described in Regulation 62 are (1) basic hospital insurance, N.Y. Comp. Codes R. & Regs. tit. 11, § 52.5 (2002), (2) basic medical insurance, N.Y. Comp. Codes R. & Regs. tit. 11, § 52.6 (2002), (3) major medical insurance, N.Y. Comp. Codes R. & Regs. tit. 11, § 52.7 (1999), (4) accident insurance, N.Y. Comp Codes R. & Regs. tit. 11, § 52.9 (1999), (5) medicare supplement insurance, N.Y. Comp. Codes R. & Regs. tit. 11, § 52.11 (1999), (6) long term care insurance, N.Y. Comp. Codes R. & Regs. Tit. 11, § 52.12, (1999) and (7) nursing home only insurance, N.Y. Comp. Codes R. & Regs. tit. 11, § 52.13 (1996). Included within the description of all the above cited types is the requirement that care in some institutional setting be covered. Disability income insurance, N. Y. Comp. Codes R. & Regs. tit. 11, § 52.8 (1999), is presumed to be outside the scope of this inquiry.
The Department also recognizes and permits limited benefits health insurance, N.Y. Comp. Codes R. & Regs. tit. 11, § 52.10 (1999):
Limited benefits health insurance is an accident & health insurance policy other than those provided for in sections 52.5 through 52.9 and 52.11 through 52.13 of this Part.
A policy that does not provide any coverage for either in-patient or out-patient hospital treatment, which would be a limited benefits health insurance policy, may be issued in New York, provided, as required by N.Y. Comp. Codes R. & Regs. tit. 11, § 52.54 (2002), the insurer issues a disclosure statement to the insured, no later than delivery of the policy. While model disclosure statements are provided in Regulation 62 for most types of accident and health insurance, no disclosure statement for limited benefits health insurance, other than dental insurance, is prescribed. Accordingly, the disclosure statement to be used would have to be submitted to the Department.
While the inquirer is correct that many mandated health insurance benefits in New York are conditioned on the insurer providing coverage for hospital care, which condition is specified either directly or indirectly, there are mandated benefits that do not have such a condition. One example is the mandate, New York Insurance Law § 3221(k)(7) (McKinney 2000 and 2004 Supplement), that any policy providing coverage for treatment in a physicians office must also cover glucose monitoring for diabetics. While mandates not requiring underlying hospital coverage are too numerous to list, a review of New York Insurance Law §§ 3216, 3221 (McKinney 2000 and 2004 Supplement), and 4235 (McKinney 2000 and 2004 Supplement) will allow the inquirer to ascertain such mandates.
For further information you may contact Principal Attorney Alan Rachlin at the New York City Office