HLD, v. 32, n. 8 (August 2004)
New York High Court Finds Insurance Company Not Required To Provide
Same Benefits For Physical And Mental Disabilities
Plaintiff Charlene Polan was covered by her employer's group health
insurance plan, which included short and long term disability insurance. The
policy specified that coverage for physical disabilities extended until the
employee reached age sixty-five or until the disability ceased. Mental disabilities,
however, are covered only for twenty-four months unless the disabled employee
is hospitalized or institutionalized at the end of this time period. Plaintiff
suffers from a chronic psychiatric disability. The insurer approved her claim
for long term disability retroactive to September 16, 1994, but terminated her
benefits on September 8, 1996 even though she continues to suffer from the disability.
Plaintiff filed a complaint against the insurer with the New York
State Insurance Department (Department). She claimed that the insurer had violated
the N. Y. Ins. Law � 4224(b)(2),
which prohibits an insurer from limiting the coverage available to an individual
on account of a physical or mental disability unless permitted by law or regulation
and statistically or empirically justified. The Department rejected the complaint.
Plaintiff challenged the Department's decision and the trial court and appellate
court affirmed. Plaintiff appealed.
The New York Court of Appeals affirmed the Department's decision.
The court first noted that nothing in � 4224(b)(2) requires an insurer to offer
the same benefits for all ailments unless statistically or empirically justified.
The plain language of � 4224(b)(2) prohibits limitations on coverage "solely
because of" a particular disability rather than limitations of coverage for
a disability, said the high court. In the instant case, the high court said,
the insurer did not adopt its twenty-four month limitation "solely because of"
The high court further noted that � 4224(b)(2) is similar to antidiscrimination
laws in other states and "courts have generally declined to interpret these
statutes to require equivalent coverages for mental and physical disabilities."
After reviewing the legislative history of � 4224(b)(2), the high
court found no evidence of intent to require parity of benefits for mental and
physical disabilities. Accordingly, the high court affirmed the decision of
the trial court and appeals court.
Polan v. State of New York Ins. Dep't, 2004 WL 1472623 (N.Y.
July 1, 2004).