Harvey v. Members Employees Trust for Retail Outlets

Summary

The New York Court of Appeals held that New York Insurance Law § 3221 and 11 NYCRR 52.16(c) did not permit a self-insured health benefit plan to exclude coverage for illnesses arising from alcohol use. The court also held that ERISA did not preempt application of those provisions to the plan, which was a multiple employer welfare arrangement (MEWA). The court affirmed the Appellate Division’s order requiring reimbursement of the decedent’s hospital and medical expenses.

Holdings

1. Insurance Law § 3221(l)(6)(A) and 11 NYCRR 52.16(c) do not permit METRO to exclude coverage for illnesses arising from alcohol use. The regulation permits exclusion of coverage for the diagnosis and treatment of alcoholism itself, while requiring coverage for other illnesses by prohibiting exclusions based on type of illness.
2. ERISA does not preempt Insurance Law § 3221(l)(6)(A) and 11 NYCRR 52.16(c) as applied to METRO.

Questions Presented

1. Whether Insurance Law § 3221(l)(6)(A) and 11 NYCRR 52.16(c) permit a self-insured health-benefit plan to exclude coverage for illnesses caused by alcohol use.
2. Whether ERISA preempts the application of Insurance Law § 3221(l)(6)(A) and 11 NYCRR 52.16(c) to a self-funded multiple employer welfare arrangement.
3. Whether the MEWA exception to ERISA's deemer clause permits New York's mandated coverage regulation and whether that regulation is inconsistent with ERISA.

Disposition

affirmed