Key Takeaway
New York no-fault insurance regulation limits benefit payments to applicants or healthcare providers only, blocking health insurers from claiming subrogation rights.
This article is part of our ongoing coverage coverage, with 150 published articles analyzing coverage issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
(1) “Article 51 of the New York Insurance Law, enacted as the Comprehensive Motor Vehicle Insurance Reparations Act (see L 1973, ch 13), governs payments to reimburse a person for basic economic loss for personal injury arising out of the use or operation of a motor vehicle, irrespective of fault. Article 51 is commonly known as the No-Fault Law. The purpose of the No-Fault Law was to promote “prompt resolution of injury claims, limiting cost to consumers and alleviating unnecessary burdens on the courts” (Pommells v Perez, 4 NY3d 566, 571 )”
(2) “The applicable regulation, 11 NYCRR 65.3.11 (a) provides, in relevant part, that “an insurer shall pay benefits for any loss, other than death benefits, directly to the applicant or, … upon assignment by the applicant …shall pay benefits directly to providers of health care services…” (emphasis added). Aetna concedes that as a health insurer it is not a “provider of health care services” as contemplated by the language of this regulation (see Health Insurance Plan of Greater New York v Allstate Insurance Co., 2007 N.Y.Slip Op 33925 ; see also Gen. Counsel Opinion 1-28-2008). Aetna argues, however, that it stands in Herrera’s shoes because Herrera assigned her no-fault rights to it.”
(3) “This argument fails for two reasons. First, since Herrera’s health care providers were able to bill and recoup payment from Aetna, an assignment by Herrera of her no-fault rights had already been made, leaving her with no rights to assign to Aetna. Second, by its very language, the no-fault regulation permits only the insured — or providers of health care services by an assignment from the insured — to receive direct no-fault benefits. Because Aetna does not fall under the term “health care provider,” Herrera could not assign her rights to it.”
What is interesting about this about this case is that the Court looks to the strict language of the regulations in coming to the conclusion major medical cannot subrogate against the no-fault carrier.
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The way this used to play out (prior to the changes in the GOL and the Second Circuit affirming same) was that the major medical carrier would assert a binding lien against the EIP or even bring a lawsuit against the EIP who, in turn, would bring an action (or third-party action) against the no-fault carrier. Insofar as the GOL has gutted the subrogation rights in major medical policies, this is a paradigm that does not play out anymore. And now that there is no direct right of action between the major medical carrier and the no-fault carrier, this whole issue has seemingly disappeared.
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Legal Context
Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
About This Topic
Insurance Coverage Issues in New York
Coverage disputes determine whether an insurance policy provides benefits for a particular claim. In the no-fault context, coverage questions involve policy inception, named insured status, vehicle registration requirements, priority of coverage among multiple insurers, and the applicability of exclusions. These articles examine how New York courts resolve coverage disputes, the burden of proof on coverage defenses, and the interplay between regulatory requirements and policy language.
150 published articles in Coverage
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Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
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