TN Insurance Bulletin (1988-09-01): Newborn Coverage T.C.A. 56-7-1003

NED McWHERTER

GOVERNOR

STATE OF TENNESSEE

DEPARTMENT OF COMMERCE AND INSURANCE

500 JAMES ROBERTSON PARKWAY

NASHVILLE, TENNESSEE 37219

B U L L E T I N

TO:

All Accident and Health Insurers

FR:

Elaine A. McReynolds, Commissioner

~~J'1

Department of Commerce and Insuranc~f1

RE:

Newborn Coverage, T.C.A. 56-7-1003

DA:

September 1, 1988

ELAINE A. McREYNOLDS

COMMISSIONER

Attached

you

will

find

a

recent

Attorney

General's

Opinion regarding newborn child coverage.

Briefly, the Attorney General states that an insurer must

cover

a

newborn

child

as

long

as

the

parent

tenders

any

increased premium for family coverage or for coverage of the

child within 31 days of the child's birth.

In other words,

the parent need not have family coverage at the date of the

child's birth.

The parent may

add such coverage within 31

days following the child's birth.

EAM/cmf

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STATE OF TENNESSEE

OFFICE OF THE

ATTORNEY GENERAL

450 JAMES ROBERTSON PARKWAY

NASHVILLE, TENNESSEE 37219

September 2, 1988

OPINION NO. 88-162

Well-Born Child Insurance Coverage

QUESTION

Whether T.C.A. § 56-7-1001 requires insurance

companies to provide newborn insurance coverage under only

family insurance policies already in effect on the date of

birth of the dependent child.

Stated differently, whether

Tennessee law would prohibit an insurer from choosing to extend

coverage to a newborn infant only if the insured parent of the

child had a family insurance policy in effect on the date of

the newborn's birth.

OPINION

It is the opinion of this office that T.C.A.

§ 56-7-1001 requires insurance to provide coverage for a child

from the moment of birth if the parent of the child had

pre-e~isting family insurance coverage or if the parent tenders

the increased premium for such coverage within thirty-one (31)

days of the child's birth.

ANALYSIS

In relevant part, T.C.A. § 56-7-1001 provides:

s birth.

OPINION

It is the opinion of this office that T.C.A.

§ 56-7-1001 requires insurance to provide coverage for a child

from the moment of birth if the parent of the child had

pre-e~isting family insurance coverage or if the parent tenders

the increased premium for such coverage within thirty-one (31)

days of the child's birth.

ANALYSIS

In relevant part, T.C.A. § 56-7-1001 provides:

(a) All individual and group health

insurance policies providing coverage on an

expense incurred basis and individual and

group service or indemnity type contracts

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issued by a nonprofit corporation whicn

provide coverage for a child of the insured

or subscriber shall, as to such child's

coverage, also provide that the health

insurance benefits applicable to children,

if any, shall be payable with respect to a

newly born child of the insured or

subscriber from the moment of birth.

(c) If payment of a specific premium or

subscription fee is required to provide

coverage for a child, the policy or contract

may require that notification of birth of a

newly born child and payment of the required

premium or fees must be furnished to the

insurer or nonprofit service or indemnity

corporation within thirty-one (31) days

after the date of birth in order to have the

coverage continue beyond such thirty-one

( 31) day period.

The manner in which these statutory provisions are interpreted

is governed by well-established rules of statutory construction.

Two of those rules were reiterated by the Tennessee

Supreme Court in the case of Worrall v. Kroger Co., 545 S.W.2d

736, 738 (Tenn. 1977).

In Worrall, the Court stated that:

Id~

[t]he fundamental rule of statutory

construction is to ascertain and, if

possible, give effect to the intention or

purpose of the legislature as expressed in

the statute.

[Citation omitted]

tatutory construction.

Two of those rules were reiterated by the Tennessee

Supreme Court in the case of Worrall v. Kroger Co., 545 S.W.2d

736, 738 (Tenn. 1977).

In Worrall, the Court stated that:

Id~

[t]he fundamental rule of statutory

construction is to ascertain and, if

possible, give effect to the intention or

purpose of the legislature as expressed in

the statute.

[Citation omitted].

This

legislative intent or purpose is to be

ascertained primarily from the natural and

ordinary meaning of the language used, when

read in the context of the entire statute,

without any forced or subtle construction to

limit or extend the import of the language.

[Citations omitted].·

Based upon those and other similar rules of statutory

construction, it appears that T.C.A. § 56-7-1001, when read in

its entirety, would require that an insurance company provide

newborn insurance coverage to any child of a parent who had

already purchased family i nsurance coverage prior to the birth

of that child.

Additionally, such newborn coverage must be

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extended to any child of a parent who tenders the specific

premium or subscription fee required to provide coverage for a

child within thirty-one (31) days after the birth of the child.

To construe the statute otherwise would to ignore the plain

meaning of T.C.A. § 56-7-lOOl(c) and would confer upon the

General Assembly an intent to require possible premium payments

for insuring the health of an individual not yet in existence.

A statute should be construed so as to give effect to

all of its provisions.

See United Canners, Inc. v. King, 696

S.W.2d 525, 527 (Tenn. 1985).

"!t is improper ... to lift one

sentence, word or clause from a statute and construe it alone,

without reference to the balance of the statute."

State ex rel.

Rector v. Wilkes, 222 Tenn. 384, 390, 436 S.W.2d 425 (1968).

If T.C.A

et in existence.

A statute should be construed so as to give effect to

all of its provisions.

See United Canners, Inc. v. King, 696

S.W.2d 525, 527 (Tenn. 1985).

"!t is improper ... to lift one

sentence, word or clause from a statute and construe it alone,

without reference to the balance of the statute."

State ex rel.

Rector v. Wilkes, 222 Tenn. 384, 390, 436 S.W.2d 425 (1968).

If T.C.A. § 56-7-1001 is interpreted to require a

parent to secure a family insurance coverage prior to the birth

of a child in order for that child to be covered from the moment

of birth, the provisions of subsection (c) are rendered

meaningless.

Pursuant to subsection (c), payment of a specific

premium required to provide insurance coverage for a child

(e.g., the increased premium necessary to convert from an

individual to a family policy) may be tendered at anytime within

thirty-one (31) days of birth to continue the coverage required

by T.C.A. § 56-7-lOOl(a) beyond that thirty-one (31) day

period.

If T.C.A. § 56-7-1001 is, however, construed to require

maintenance of family insurance coverage prior to birth of a

child, the subsection (c) provision for payment of an increased

premium to continue coverage beyond the thirty-one (31) day

period is meaningless since no increased or specific premium

payment will be required.

The premium increase for family

coverage will have already been assessed prior to birth and no

new increase after birth is needed.

Clearly, T.C.A. § 56- 7-lOOl(a) refers only to

insurance policies already providing coverage for children.

Reading that subsection in isolation, therefore, it might appear

that a parent must have pre-existing family insurance coverage

in order to have a newborn child insured from the moment of

birth.

Despite the limited impact of T.C.A. § 56-7-lOOl(a)

standing alone, however, T.C.A

needed.

Clearly, T.C.A. § 56- 7-lOOl(a) refers only to

insurance policies already providing coverage for children.

Reading that subsection in isolation, therefore, it might appear

that a parent must have pre-existing family insurance coverage

in order to have a newborn child insured from the moment of

birth.

Despite the limited impact of T.C.A. § 56-7-lOOl(a)

standing alone, however, T.C.A. § 56-7-lOOl(c) expands the

coverage envisioned in subsection (a) •

If no pre-existing family coverage is in e f fect at the

moment of a child's birth, an additional "specific premium .

is required to provide coverage for a child."

T.C.A.

§ 56-7-lOOl(c).

Subsection (c) allows payment of that premium

within thirty-one (31) days of birth "in order to have the

coverage continue beyond such thirty- one (31) day period."

(Emphasis added) •

If the coverage i s to continue be yond the

thirty-one (31) day period, the statute obviously contemplates

that the child's medical coverage before payment of the

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increased premium will be insured if that premium is later

tendered within thirty-one (31) days of the date of birth.

Thus, a common-sense reading of the entire statute indicates

that a parent may ensure coverage of a newborn child's medical

expenses by either having pre-existing family insurance coverage

or by tendering the additional premium for such coverage within

thirty-one (31) day of the birth of the child.

Additionally, interpreting T.C.A. § 56-7-1001 to

require family coverage before the child's birth to ensure that

the child is covered by health insurance from the moment of

birth would attribute an unrealistic intent to the legislature

that passed the statute.

Many two-income couples, for example,

maintain two s~parate individual insurance policies through the

respective spouses' employers

Additionally, interpreting T.C.A. § 56-7-1001 to

require family coverage before the child's birth to ensure that

the child is covered by health insurance from the moment of

birth would attribute an unrealistic intent to the legislature

that passed the statute.

Many two-income couples, for example,

maintain two s~parate individual insurance policies through the

respective spouses' employers.

If prior family insurance

coverage is required before the birth of a child if that child

is to be covered by health insurance, one of the spouses must

convert to a higher-priced family policy many months prior to

child birth in order to be sure that the medical costs

associated with a possible premature birth are reimbursed.

Under such a scenario, a parent would, in many cases, be

required, in order to protect against catastrophic medical

costs, to pay increased premiums for many months before the

actual birth of the covered child.

An even more unjust result could occur in the case of

an adopted child.

In such a case, if pre-existing family

coverage is required by T.C.A. § 56-7-1001, a parent may have to

pay increased family coverage premiums for many years before

being matched with an adoptive child.

It cannot be assumed that

the legislature intended such an absurd result.

See Epstein v.

State, 211 Tenn. 633, 641, 366 S.W.2d 914 (1963).

Pursuant to rules of statutory construction, T.C.A.

§ 56-7-1001 must be read as a whole, giving effect to every

provision of the statute.

Such a reading of the statute leads

to the inesc~pable conclusion that insurance coverage for newly

born children must be provided from the moment of birth if a

parent of the child had pre-existing family insurance coverage

or if the parent tenders the increased premium for such coverage

within thirty-one (31) days of the child's birth.

KNOX WALKUP

ef Deputy Attorney

ision of the statute.

Such a reading of the statute leads

to the inesc~pable conclusion that insurance coverage for newly

born children must be provided from the moment of birth if a

parent of the child had pre-existing family insurance coverage

or if the parent tenders the increased premium for such coverage

within thirty-one (31) days of the child's birth.

KNOX WALKUP

ef Deputy Attorney

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CINDY COL

Assistant Attorney General

Requested by:

The Honorable Elaine A. McReynolds

Commissioner

Department of

1808 West End

Nashville, TN

Commerce & Insurance

Building

37203

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