The Office of General Counsel issued the following opinion on August 12, 2005, representing the position of the New York State Insurance Department.
Re: Out of Network Health Coverage.
Question Presented:
Does the Insurance Law require an employer to provide the option for out-of-network health coverage?
Conclusion:
The Insurance Law does not require an employer to provide health insurance coverage to its employees. In addition, even if an employer chooses to do so, the Insurance Law does not specify the types of coverage the employer may provide. The Insurance Law regulates the types of health insurance policies that an insurance company may offer in New York State and thus affects the options available to employers. However, although there are exceptions which require an insurer to provide out-of-network coverage in certain limited, individual circumstances, there is nothing in the Insurance Law to prohibit an insurer from limiting routine coverage under a group policy to in-network service.
Facts:
The inquiry is of a general nature. It is assumed that the question applies to a group health plan provided by an employer to its employees.
Analysis:
The Insurance Law does not require an employer to provide health insurance coverage to its employees. In addition, even if an employer chooses to do so, the Insurance Law does not specify the types of coverage the employer may provide. The Insurance Law regulates the types of health insurance policies that an insurance company may offer in New York State and thus affects the options available to employers. However, there is nothing in the Insurance Law to prohibit an insurer from limiting routine coverage under a group policy to in-network service
There are, however, exceptions which apply in certain limited and individual cases. For example, N.Y. Ins. § 3221 (McKinney Supp. 2005) which regulates the content of group or blanket accident and health insurance contracts, requires every policy which provides medical, major medical or similar comprehensive-type coverage to cover a "second medical opinion by an appropriate specialist . . . in the event of a positive or negative diagnosis of cancer or a recurrence of cancer or a recommendation of a course of treatment for cancer. . ." N.Y. Ins. Law § 3221(k)(9)(A) (McKinney Supp. 2005). In addition, N.Y. Ins. Law § 3221(k)(9)(A)(i), in relevant part, provides that in cases in which an insurer:
requires, or provides financial incentives for, the insured to receive covered services from health care providers participating in a provider network maintained by or under contract with the insurer, the policy shall include coverage for a second medical opinion from a non-participating specialist . . . at no additional cost to the insured beyond what such insured would have paid for services from a participating appropriate specialist.
N.Y. Ins. Law § 3221(k)(9)(A)(i) (McKinney Supp. 2005).
N.Y. Ins. Law § 4303(w)(1) (McKinney Supp. 2005) contains similar provisions with respect to non-profit health plans and HMOs.1
In addition, with respect to managed care contracts, N.Y. Ins. Law § 4804(a) (McKinney 2000) provides that:
if the insurer does not have a health care provider in the in-network benefits portion of its network with appropriate training and experience to meet the particular health needs of an insured, the insurer shall make a referral to an appropriate provider . . . at no additional cost to the insured beyond what the insured would otherwise pay for services received within the network.
N.Y. Pub. Hlth Law § 4403(6)(a) (McKinney 2002) contains a similar provision with respect to health maintenance organizations (HMOs).
This opinion is limited to an interpretation of the Insurance Law and does not offer any opinion with respect to any other law. Any questions regarding any regulation of the employer are best directed to the New York State Department of Labor.
For further information you may contact Assistant Counsel Brenda M. Gibbs at the Albany Office.
1 In accordance with New York Public Health Law § 4406(1) (McKinney Supp. 2005), subscriber contracts of HMOs are regulated by the Insurance Department as if they were subscriber contracts of not-for-profit insurers.