Plavin v Group Health Inc.

Plavin v Group Health Inc.

Opinion

 [**1165]  [***6]  [*5]   Stein, J.

The United States Court of Appeals for the Third Circuit has asked us to decide, in essence, whether plaintiff has sufficiently alleged consumer-oriented conduct to assert claims under General Business Law §§ 349 and 350 for damages incurred due to an insurance company's alleged materially misleading representations made directly to the City of New York's employees and retirees about the terms of its insurance plan to induce them to select its plan from among the 11 health insurance plans made available to over 600,000 current and former City employees. Because the complaint sufficiently alleged consumer-oriented conduct, we answer in the affirmative.

The City offers its employees and retirees their choice of health insurance plans as part of their compensation and retirement packages. Plaintiff is a retired New York City police officer, who received health insurance coverage through the health care plan of defendant Group Health Incorporated (GHI). GHI is a not-for-profit corporation, operating as an indemnity insurer, that offers City employees its "Comprehensive Benefits Plan," which provides in-network coverage and partial [****2]  reimbursement for out-of-network services (the GHI Plan or Plan).

Plaintiff alleged that, at all relevant times, the GHI Plan was among 11 plans the City offered to approximately 600,000 employees and retirees on an annual or biannual basis.¹ The terms of these plans were negotiated between the City, the insurance vendors, and the New York City Municipal Labor Committee, which was comprised of various employee unions. Prior to an open enrollment period, the New York City Office of Labor Relations, on behalf of the City, assembled and distributed to employees and retirees a summary program description, which contained health plan descriptions prepared by each insurer. Plaintiff alleged that this document—the content of which was [*6]  not reviewed by the City or Municipal Labor Committee—was the only one distributed to City employees and retirees regarding the GHI Plan before they were required to select a plan. In addition, as pertinent to plaintiff's claims, GHI created its own online summary of benefits and coverage, which was available on its website. If an employee or retiree selected the GHI Plan, the City sponsored and paid the entire cost of the premiums therefor.

As relevant here, the [****3]  complaint alleges that the summary program description and online summary (collectively, the summary materials) represented the GHI Plan as furnishing its members with extensive out-of-network coverage subject to deductibles and coinsurance, and "the freedom to choose any provider worldwide." Further, the summary materials stated that the GHI Plan contained "additional Catastrophic Coverage" for "100% of the Catastrophic Allowed Charge as determined by [***7]  [**1166]  GHI" if a member's out-of-network expenses for predominantly in-hospital care   exceeded $1,500, and also represented that the Plan offered its members an optional rider, at an additional cost, that would provide enhanced coverage for certain services, increasing out-of-network reimbursements "on average, by 75%." Relatedly, GHI stated in the materials that the out-of-network reimbursement fee schedule was "originally based on 1983 procedure allowances," and that some of the rates would be updated "periodically."

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