On appeal from a final decision of the State Health Benefits Commission.
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 ...