Connecticut insurers must be careful when writing accidental death and dismemberment policies if they want to avoid triggering health benefit mandates.

Connecticut Insurance Susan Cogswell writes about the fine points of Connecticut’s definitions of “AD&D” policy and “accident only” policy in a recent notice sent to all licensed life and health insurers in Connecticut.

The Connecticut Insurance Department normally treats AD&D policies that offer indemnity benefits for death, dismemberment, or loss of use of body parts as life insurance products, Cogswell writes.

Because the Connecticut department treats standard AD&D policies as life insurance policies, the policies are not subject to health insurance laws, such as mandatory health insurance benefit laws.

“However, when AD&D policies offer benefits beyond dismemberment and loss of use of a member, and include certain medical benefits, the department considers such policies to be ‘accident only’ policies and, therefore, subject to existing health insurance mandates,” Cogswell warns.

The Connecticut department is likely to view a filing as a health filing if it includes benefits for medical services and those benefits are payable only when services have been provided and expense has been incurred, Cogswell writes.

The Connecticut department would require the insurer to comply only with health mandates that seem to “relate to” accidents, and not mandates having to do with matters such as mammography or infant formula, Cogswell writes.

“It may be likely to mislead or confuse the insured to include in an accident policy, mandates that do not apply to an accident situation,” Cogswell writes. “An insured could mistakenly believe it is a broader health policy, rather than an accident only policy.”

Similarly, the Connecticut department might require the inclusion of certain types of health mandates, but not all health mandates, in a disability insurance policy that provides medical benefits in addition to medical benefits, Cogswell writes.

A copy of the Connecticut notice is on the Web at Document Link