Fight For Health Insurance Rights in New York

Armen Hareyan's picture

Frankel & Newfield has collaborated with their New York colleagues to execute a campaign seeking the ban of all discretionary clauses in health insurance policies issued in New York.

In a letter to the Superintendent of Insurance for the State of New York, counsel, along with members of various patient and community advocacy groups, has once again sought to alter the landscape and level the playing field regarding group insurance contracts.


This effort continues a previous effort spearheaded by Frankel & Newfield, P.C. back in 2005, when they lobbied the New York State Insurance Department and numerous politicians seeking this fundamental change. At that time, as a result of these efforts, the New York State Insurance Department sought to aid disabled workers, issuing a ruling (2006 Circular Letter No. 14) which invalidated certain contract language in disability insurance policies that are provided to individuals as an employee benefit. The Insurance Department declared that the use of "discretionary clauses" in these policies is illegal and in violation of the Insurance Law.

These important benefits have been unfortunately subjected to sharp practices by insurance companies, who act with relative immunity because the courts reviewing these determinations are compelled to provide great deference to the insurance company decisions, overturning only the rare case where the conduct was found to be arbitrary and capricious. "We are once again forcing the Insurance Department to make fundamental changes to permit insureds a fighting chance to obtain important benefits", said Justin Frankel, Esq., a partner with Frankel & Newfield, P.C., a firm whose practice focuses on protecting the rights of disabled claimants.

Many clients of Frankel & Newfield have claims which are governed under the federal statute ERISA (Employee Retirement Income Security Act), which was originally intended to protect employees. Because of the discretionary clauses in policies however, employees have seen valid claims denied or terminated, some even after years of being paid benefits, often with no change in their medical condition. "We hope that the Insurance Department recognizes the injustice which has existed for far too long, and takes the actions that other states have taken", said Jason Newfield, Esq., referring to New Jersey, California, and other states. The results of this long overdue action will be that claims will be adjudicated more fairly, and claimants will have more success if and when litigation becomes necessary, Mr. Newfield predicted.