State RegulationsNY specificDifficulty 2/5
A New York employer's group health plan lets each employee individually choose any amount of coverage from a wide menu of unrelated options. Under N.Y. Ins. Law §4235, what is the problem with this design?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.Y. Ins. Law §4235(c)(1)(A), a group accident and health policy must insure employees for amounts of coverage based upon some plan which will preclude individual selection. The statute does permit a limited number of selections by employees, but only where the selections utilize consistent plans of coverage so that the resulting plans of coverage are reasonable. A menu of individually chosen, unrelated amounts fails that requirement.
Why the other options are wrong
- A) Some employee choice is permitted; the statute allows limited selections under consistent plans of coverage.
- B) The employer is the policyholder, but the statute regulates the plan design; it does not force the employer to strip all choice from employees.
- C) The defect is the design of the benefit plan itself, not the time of year when selections are made.
Memory hook
Group plans preclude picking and choosing: only limited selections under consistent plans.