The Office of General Counsel issued the following opinion on June 27, 2005 representing the position of the New York State Insurance Department.
RE: Interplay of Medicaid and Healthy New York with Private Health Insurance
Issues
1. If an individual is covered by health insurance through his or her employment, does that individual lose eligibility for Healthy New York or Medicaid?
2. If such eligibility is lost, is the employer responsible for the difference in benefits between the new plan and benefits provided under the former government program?
Conclusions
1. Health insurance provided through employment would render an individual ineligible for coverage under Healthy New York. Questions concern eligibility under Medicaid and its complementary program, Family Health Plus, should be addressed to the Health Department.
2. Since the benefits provided under the employer's program would constitute an employee welfare benefit plan, as such term is defined in the Employee Retirement Income Security Act (ERISA), 29 U.S.C. A. § 1001 et seq. (West 1999 and 2004 Supplement), that question would have to be addressed by the United States Department of Labor.
Facts
The inquirer is licensed as an insurance agent pursuant to New York Insurance Law § 2103(a) (McKinney 2000 and 2005 Supplement) and has as a client an employer who has contracted with the State of New York and the City of New York. In accordance with applicable statutes, New York Labor Law § 220 (McKinney 2002) and New York City Administrative Code § 6-109 (1995), the employer, as part of "prevailing wages", is required to furnish health insurance coverage to its employees.
While the inquirer has not provided details of the policy purchased by the employer, it appears from the limited description furnished, that the policy would not constitute "major medical insurance" as that term is defined in N.Y. Comp. Codes R. & Regs. tit. 11, § 52.7 (1999) (Regulation 62). Accordingly, either Healthy New York or Medicaid would possibly provide payment for services to its enrollees that would be excluded under the employer's health plan.
The inquirer inquires whether receipt of coverage under the insurance purchased by employers plan would render individuals ineligible for either Healthy New York or Medicaid. If so, the inquirer further inquires whether the employer would be liable for benefits that would have been provided under either Healthy New York or Medicaid and are not provided under the insurance purchased by the employer.
Analysis
The benefits provided under Healthy New York are set forth in New York Insurance Law § 4326(d) (McKinney 2000 and 2005 Supplement):
The contracts issued pursuant to this section . . . shall only provide in-plan benefits, except for emergency care or where services are not available through a plan provider. Covered services shall include only the following: (1) inpatient hospital services consisting of daily room and board, general nursing care, special diets and miscellaneous hospital services and supplies; (2) outpatient hospital services consisting of diagnostic and treatment services; (3) physician services . . . (4) outpatient surgical facility charges related to a covered surgical procedure; (5) preadmission testing; (6) maternity care; (7) adult preventive health services . . . (8) preventive and primary health care services for dependent children including routine well-child visits and necessary immunizations; (9) equipment, supplies and self-management education for the treatment of diabetes; (10) diagnostic x-ray and laboratory services; (11) emergency services; (12) therapeutic services consisting of radiologic services, chemotherapy and hemodialysis; (13) blood and blood products furnished in connection with surgery or inpatient hospital services; and (14) prescription drugs obtained at a participating pharmacy. . . .
Eligibility of individuals for coverage under Healthy New York is set forth in New York Insurance Law
§ 4326(c)(3)(A):
(A) A qualifying individual is an employed person: (i) who does not have and has not had health insurance with benefits on an expense reimbursed or prepaid basis during the twelve month period prior to the individual's application for health insurance under the program established by this section; (ii) whose employer does not provide group health insurance and has not provided group health insurance with benefits on an expense reimbursed or prepaid basis covering employees in effect during the twelve month period prior to the individual's application for health insurance under the program established by this section; (iii) resides in a household having a net household income at or below two hundred eight percent of the non-farm federal poverty level (as defined and updated by the federal department of health and human services) or the gross equivalent of such net income; and (iv) is ineligible for Medicare.
In accordance with New York Insurance Law § 4326(c)(3)(A)(ii), the provision of health insurance by an employer renders an individual ineligible for Healthy New York.
Medicaid is a joint Federal-state program for the medically indigent. Eligibility in New York is governed by New York Social Services Law § 366 (McKinney 2003 and 2005 Supplement). Since New York Social Services Law § 367-a (McKinney 2003 and 2005 Supplement) contemplates an interplay between private health insurance and Medicaid, eligibility for private health insurance does not, per se, constitute disqualification for Medicaid.
In addition to Medicaid, based upon a waiver by the United States Department of Health & Human Services, New York has established a complementary program, Family Health Plus. The benefits of Family Health Plus are set forth in New York Social Services Law § 369-ee(1)(e) (McKinney 2003 and 2005 Supplement):
'Health care services' means the following services and supplies as defined by the commissioner [of health] in consultation with the superintendent of insurance: (i) the services of physicians, nurse practitioners, and other related personnel which are provided on an outpatient or inpatient basis; (ii) inpatient hospital services . . . (iii) laboratory tests; (iv) diagnostic x-rays; (v) prescription drugs and non-prescription smoking cessation products or devices; (vi) durable medical equipment; (vii) radiation therapy, chemotherapy, and hemodialysis; (viii) emergency room services; (ix) inpatient and outpatient mental health and alcohol and substance abuse services, . . . (x) prehospital emergency medical services for the treatment of an emergency medical condition . . . (xi) emergency, preventive and routine dental care . . . except orthodontia and cosmetic surgery; (xii) emergency vision care, and preventive and routine vision care . . . (xiii) speech and hearing services; (xiv) diabetic supplies and equipment; (xv) services provided to meet the requirements of 42 U.S.C. 1396d(r) [early and periodic screening, diagnostic, and treatment services] and (xvi)hospice services.
Eligibility of individuals for coverage under Family Health Plus is set forth in New York Social Services Law § 369ee(2)(a):
A person is eligible to receive health care services pursuant to this title if he or she: (i) resides in New York state and is at least age nineteen, but under sixty-five years of age; (ii) is not eligible for medical assistance under title eleven of this article . . . (iii) does not have equivalent health care coverage under insurance or equivalent mechanisms, as defined by the commissioner in consultation with the superintendent of insurance; (iv) (A) was not covered by a group health plan based upon his or her employment or a family member's employment, as defined by the commissioner in consultation with the superintendent of insurance, during the six-month period prior to the date of the application under this title . . . .
Questions concerning Medicaid and Family Health Plus should be addressed to:
Daniel Tarantino, Esq.
Senior Attorney
Office of Legal Affairs
Department of Health
Tower Building
Empire State Plaza
Albany, NY 12237.
The provision of health benefits to employees constitutes an employee welfare benefit plan, as defined in ERISA. 29 U.S.C.A. § 1002(1) (West 1999):
The terms 'employee welfare benefit plan . . . mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer . . . to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death . . . .
In accordance with 29 U.S.C.A. § 1144 (West 1999) state laws concerning employee welfare benefit plans are generally preempted and such self-funded plans are not considered as insurers.
Questions concerning an employer's obligation in excess of the benefits provided through an insurance policy should be addressed to:
Employee Benefit Security Administration
United States Department of Labor
33 Whitehall Street
New York, NY 10004.
For further information one may contact Principal Attorney Alan Rachlin at the New York City office.