An employee at a New York state employer with true employer-paid group health coverage must stay in the plan — or else, officials say.
Officials in the general counsel's office at the New York State Insurance Department come to that conclusion in Office of the General Counsel (OGC) Opinion Number 10-12-15.
New York department officials say in the opinion that they received a question relating to waivers of group health coverage paid for entirely by the employer, without employee contributions.
"May an employee opt out of his or her employer-sponsored group health insurance 
coverage, where the coverage is paid for by the employer with no contribution by the employee?" a member of the public asked.
The member, a representative of "ABC Company," suggested that some employees might want to opt out of the ABC employer-paid plan and receive coverage as dependents through a spouse's health plan.
In that situation, an employee cannot opt out of the entirely employer-paid group health plan, officials say.
"If an employee opted out of his or her employer-sponsored coverage, where the coverage is paid for by the employer without contribution by the employee, the group would no longer be a valid group under the section," officials say.
Section 4235(c)(1)(A) of the New York Insurance Law states that a group plan funded wholly or partly with employee contributions must cover
at least 50 of the eligible employees, or at least 50% of the eligible employees at employers with fewer than 100 employees.
The section does not directly say what percentage of eligible employees must be covered by a group plan if the employer pays the full cost of coverage.
"The statute by its express terms explicitly provides that the policy issued to an employer insuring its employees, 'except as hereinafter provided,' shall insure 'all of such [eligible] employees' and thus requires that all employees (or a specified class or classes thereof) provided coverage by his or her employer must accept the coverage," officials say in the opinion. "The statute therefore prohibits an employee from declining non-contributory accident and health insurance coverage provided by the employer."
The statute protects insurers from married workers who want to manipulate coordination of benefit rules to have the plan with the richer benefits be primary, officials say.
The statute also discourages an employer from using cash incentives or other means to encourage sick employees to opt out of a plan, officials say.
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