G.B. v. State Health Benefits Com'n
| Decision Date | 06 January 1988 |
| Citation | 222 N.J.Super. 83,535 A.2d 1010 |
| Parties | G.B. and R.B., Petitioners, and N.B., Petitioner-Appellant, v. STATE HEALTH BENEFITS COMMISSION, Respondent-Respondent. |
| Court | New Jersey Superior Court — Appellate Division |
Edward Kopelson, Morristown, for petitioner-appellant N.B. (David Lazarus, Director of Litigation, Community Health Law Project, Trenton, attorney; Edward Kopelson, Morristown, on the brief).
Adele C. Baker, Deputy Atty. Gen., for respondent-respondent State Health Benefits Com'n (W. Cary Edwards, Atty. Gen., attorney; Michael R. Clancy, Deputy Atty. Gen., of counsel; Adele C. Baker, on the brief).
Alfred A. Slocum, Public Advocate, filed an amicus curiae brief and reply brief on behalf of appellant (William F. Culleton, Jr., Asst. Deputy Public Advocate, on the brief).
Before Judges SHEBELL, GAYNOR and ARNOLD M. STEIN.
The opinion of the court was delivered by
SHEBELL, J.A.D.
Appellant N.B. appeals from a decision of the respondent State Health Benefits Commission (Commission) which denied him continued coverage as a dependent under the State Health Benefits Program after age 23, despite his total disability. The basis for denial was that appellant's total disability results from mental illness rather than mental retardation or physical handicap.
Appellant, until age 23, was insured for state-sponsored health benefits as a qualified dependent under policies held by his parents, R.B. and G.B., both of whom were state employees. On November 16, 1984, the Commission notified the parents that their request for a continuation of insurance coverage for their mentally-ill son had been denied. R.B. requested the Commission to reconsider its decision, and on February 7, 1985, the Commission again refused to continue coverage.
The parents filed a timely administrative appeal of the Commission's decision on March 28, 1985, and the Commission referred the matter to the Office of Administrative Law (OAL) for a hearing. On June 14, 1985, the administrative law judge (ALJ) entered a consent order permitting appellant to intervene. The judge required that the insurance carriers be notified of their eligibility to participate in the administrative proceeding. Blue Cross/Blue Shield of New Jersey (BC/BS) accepted the invitation to intervene. A formal order of intervention was entered, but on April 8, 1986, BC/BS withdrew from participation, explaining that its intervention became unnecessary because the requested relief would not affect BC/BS subscribers in general.
A hearing was held before the ALJ on April 15, 17, 18 and 29, and May 20, 1986. The Initial Decision, dated August 28, 1986, recommended that the Commission's determination denying continued benefits to appellant be affirmed. At a meeting held on October 8, 1986, the Commission adopted the ALJ's decision and on November 10, 1986, the Commission issued its final administrative determination.
Appellant has filed a timely notice of appeal from the Commission's final decision although his parents have not appealed. The Department of the Public Advocate was granted leave to appear as amicus curiae in this appeal and filed a brief and reply brief.
Appellant's parents have participated in the State Health Benefits Program since 1971 and 1975. Appellant was enrolled as a qualified dependent under his parents' state-sponsored insurance policies from 1971 through 1984, when he achieved 23 years of age. The insurance provided to appellant by the program included medical, hospital, and surgical coverage through a master contract with BC/BS, and major medical through a master contract with the Prudential Insurance Company of America (Prudential). These contracts were obtained and administered by the Commission, a state agency statutorily charged with negotiating for insurance benefits for state employees under N.J.S.A. 52:14-17.28.
Prior to his 23rd birthday, appellant became totally disabled because of mental illness. Thus, he became dependent on his parents for support and maintenance. The diagnosis of mental illness was made by various health professionals who examined him. He was confined in a psychiatric hospital several times and required restricted living arrangements. Nothing in the record suggests that appellant is either mentally retarded or physically handicapped. The Social Security Administration classified appellant as "totally disabled" and granted his request for disability benefits more than two years before he became 23.
On September 19, 1984, a timely request was filed with BC/BS to continue appellant's health benefits beyond his 23rd birthday. Under the state-sponsored program, BC/BS was responsible for determining initially whether a dependent's insurance coverage would be continued beyond age 23. Any determination made by BC/BS concerning continuation of a dependent's medical, hospital, and surgical benefits was adopted as a matter of course by Prudential.
In November 1984, BC/BS denied the request for continuation of appellant's benefits based upon appellant's failure to meet the necessary criteria for continuation given in the master contract with the State. The pertinent contract provision follows:
If the Employee maintains Family or Parent and Children coverage under this Contract, coverage will continue for an unmarried child covered as a Dependent by the Contract prior to age 23, if the child:
(i) is incapable of self-sustaining employment because of mental retardation or physical handicap; and
(ii) became so incapable before age 23; and
(iii) is chiefly dependent upon the Employee for support and maintenance; and if (iv) the Employee has submitted proof satisfactory to the Plans of such child's incapacity within 31 days of the last day of the calendar year in which such child's twenty-third birthday occurred.
[Emphasis supplied].
On November 15, 1984, Prudential likewise declined to continue benefits for appellant, basing its decision on a provision of its master contract which stated:
Continued Coverage for an Incapacitated Child: This applies only to the Dependents insurance an Employee has for a child. The insurance for the child will not end on the date the age limit in the definition of Qualified Dependent is reached if both of these are true:
(1) The child is then incapable of self-sustaining employment due to mental retardation or physical handicap. Prudential must receive proof of this within the next 31 days.
(2) The child otherwise meets the definition of Qualified Dependent.
If these conditions are met, the age limit will not cause the child to stop being a Qualified Dependent. This will apply as long as the child remains so incapacitated.
[Emphasis supplied].
Continued coverage was thus denied, even though appellant was incapable of self-sustaining employment before attaining the age of 23, was unmarried and dependent upon his parents, and had given timely proof of incapacity. The reason for denial was that appellant's incapacity resulted from mental illness rather than mental retardation or physical handicap.
On November 28, 1984, the Commission's benefits coordinator wrote to his supervisor and explained that mental illness is not classified with mental retardation or physical handicaps because it is believed to be less debilitating and more temporary, and because the administrative task of defining and verifying mental illness would be great and the costs associated with covering the additional dependents would be high. The administrative law judge who heard the case cited the administrative burden and the increased costs of the program as "significant concerns" when he affirmed the Commission's decision denying continued benefits to appellant.
Appellant argues that the Commission's extension of continued benefits to dependents who are totally disabled due to mental retardation or physical handicaps but not to those who are totally disabled due to mental illness is in contravention of the State Health Benefits Program Act (the act), N.J.S.A. 52:14-17.25 et seq. The act was passed in 1961 for the purpose of procuring health benefits for state employees. N.J.S.A. 52:14-17.25; N.J.S.A. 52:14-17.27. The Commission created under the act had as its primary function to
negotiate with and arrange for the purchase, on such terms as it deems to be in the best interests of the State and its employees, ... providing ... benefits covering employees of the State and their dependents, and [the Commission] shall execute all documents pertaining thereto for and on behalf and in the name of the State. [ N.J.S.A. 52:14-17.28; emphasis supplied].
The statute requires that insurance be available to all eligible employees and their dependents and that the procured insurance benefits meet or exceed a stated minimum standard. N.J.S.A. 52:14-17.28. No statutory requirement expressly mandates the extension of continued benefits to any dependents...
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