You asked if insurance companies are prohibited from offering more than one stand-alone specified disease policy in Connecticut. You described a constituent's situation and asked how it could be improved.

As told to you, the constituent's employer, an insurance company, is allowed to offer only one specified disease policy as a stand alone policy in Connecticut—a cancer policy. If a person wants to purchase insurance coverage for a different specified health event, he or she must apply for and buy the company's stand alone cancer policy, which the person may not need or want, and riders to cover the specified health event.

SUMMARY

Connecticut law and regulations do not limit the number of stand alone policies an insurer may offer individuals for specifically named diseases or conditions. Each such policy must comply with the individual specified disease policy regulations (see, Conn. Agencies Regs. § 38a-505-13, enclosed). The Connecticut Insurance Department indicates that, several insurers have more than one specified disease policy approved for sale in the state.

The department believes that by “specified health event” policy, the constituent may mean a “critical illness” benefit, under which a fixed dollar amount is payable when a named health event occurs (e.g., heart attack, stroke). The department does not permit a critical illness benefit as a stand alone policy. Rather, in order to offer a stand alone policy providing coverage for a named health event, an insurer must adhere to the specified disease policy regulations noted above.

As a result, the policy would have to include not only the first occurrence benefit, but also coverage for all of benefit components related to the diagnosis and treatment of that health event (e.g., hospital confinement, outpatient surgery, skilled nursing home, home health care).

NEW PUBLIC ACT

Passed in the 2008 regular session, PA 08-181, which becomes effective when the governor signs it, permits insurers to also offer specified disease policies to groups, in accordance with regulations the insurance commissioner must adopt.

The public act prohibits group and individual health insurance plans from coordinating benefits, or otherwise reducing benefit payments, because a person covered under its terms is also covered by or receiving benefits from a group specified disease policy that was delivered, issued, renewed, amended, or continued in Connecticut. Thus, if a person is covered under both a group specified disease policy and another health insurance plan, each plan must adjudicate claims and pay benefits without considering what the other policy is paying.

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