State RegulationsNY specificDifficulty 2/5
Several self-employed consultants in Syracuse form an association principally to qualify for group health insurance, and the association has no other purpose or activity. Under New York law, how is this group treated for group accident and health eligibility?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §4235, an eligible group must be a bona fide group that exists for reasons independent of the insurance transaction, such as common employment, union membership, or a genuine association purpose. An association created principally to obtain health insurance does not satisfy the definition of an eligible group and cannot be used to secure group coverage in New York.
Why the other options are wrong
- B) Any-association reasoning ignores the bona fide requirement; the group must exist for a purpose beyond obtaining insurance.
- C) Individual medical examinations cannot cure an ineligible group; the defect is the group's purpose, not the members' health.
- D) Claims experience has no bearing on whether a group qualifies; eligibility is judged on the group's character when coverage is sought.
Memory hook
Formed just to buy insurance? Not a group New York will insure.