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A group insurance policy that provides more extended long-term disability benefits for physical disabilities than for mental ones does not violate New York’s Insurance Law, a divided state appellate court ruled Tuesday. The Appellate Division, 1st Department, split 3-2 in affirming Matter of Polan v. State of New York Insurance Department, 1645. Acting Justice Robert Lippmann in Manhattan had dismissed Charlene Polan’s Article 78 proceeding challenging the Insurance Department’s finding that Metropolitan Life Insurance Co. (Metlife) did not discriminate against her as a result of her mental disability. At issue was Insurance Law � 4224 (b)(2), which states that “no insurer” providing accident and health insurance in New York shall “refuse to insure, refuse to continue to insure or limit the amount, extent or kind of coverage available to an individual, or charge a different rate for the same coverage solely because of the physical or mental disability, impairment or disease, or prior history thereof, of the insured or potential insured.” Justice Richard T. Andrias, writing for the majority, focused on the statute’s application to “insurers, not insurance policies.” He agreed with the Insurance Department’s finding that Polan “does not allege that Metlife refused to provide to her the same LTD [long-term disability] benefits coverage as all other MetPath employees. On the contrary, Polan was eligible for the same package of LTD benefits provided to all employees. … Her complaint is that the package of benefits would have paid her more if she had incurred a different kind of disability. Nothing in � 4224(b)(2) requires an insurance company to provide the same benefits for all conditions.” Polan’s employer, MetPath, now known as Quest Diagnostics, offered disability insurance that limited long-term disability coverage caused by mental disorders to 24 months, whereas coverage for physical disabilities continued until the disability ceased or the insured reached age 65. Polan has been unable to work since March 1994 because of chronic depression. Her long-term disability benefits ceased in September 1996. Justice Joseph P. Sullivan, who was joined in dissent by Justice Alfred D. Lerner, read the statute to forbid a differentiation in benefits for physical and mental disabilities. “In unambiguous language, the statute prohibits an insurer doing business in New York State … from limiting the amount or extent of coverage available because of the mental disability of the insured unless that limitation is based on sound actuarial principles or is related to actual or anticipated experience,” Sullivan wrote. Although no New York courts have interpreted the statute, Justice Andrias cited a ruling by the 5th U.S. Circuit Court in McNeil v. Time Ins. Co., 205 F3d 179 (2000), “which turned on its finding that the plain language of the essentially similar Texas statute required that the violation must be committed by the insurer, not by a term of the policy.” Sullivan found that “the 5th Circuit’s emphasis on the issuance of the policy and the insurer’s knowledge or lack of knowledge of the particular condition of the individual applying for insurance at the time of the policy’s issuance misses the mark. The language of the New York statute, like the Texas statute … is keyed, not only to an insurer’s issuance of a policy but, as well, to its ‘limit[ation]‘ of the amount, extent or kind of coverage available.” Both judges also noted that a bill has been proposed in Albany, “Timothy’s Law,” that would mandate that health insurers cover mental health the way they cover physical health. They disagreed on whether there was an inference that the 1994 legislation amending � 4224 was intended to provide the same coverage for mental and physical ailments. Polan was represented by Robert L. Schonfeld of Stein & Schonfeld of Garden City, N.Y. Assistant Attorneys General David Lawrence and Michael S. Belohlavek handled the appeal for the Insurance Department.

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