Clarification of Bulletin HC-40

LH 88-50 CT state seal STATE OF CONNECTICUT INSURANCE DEPARTMENT BULLETIN HC 40(a) MAY 26, 1988 TO: COMPANIES LICENSED IN THE STATE OF CONNECTICUT TO WRITE ACCIDENT AND HEALTH INSURANCE AND ALL HMO'S SUBJECT: CLARIFICATION OF BULLETIN HC-40 Subsequent to the issuance of Bulletin HC-40 there have been numerous inquiries regarding its scope and effect. Bulletin HC-40 was intended to address, and is applicable to situations where a he?lth insurer, as a condition precedent to the payment of health benefits, requires its insureds to sign a reimbursement agreement which would require such insured to repay the health insurer from any sums collected from a responsible third party regardless of whether they include ­ health and medical expenses. Section 52-225c of the Connecticut General Statutes, as amended by Public Act 87-227, while somewhat ambiguous, at a minimum prevents subrogation or reimbursement where there has been a judicial award of damages wherein collateral source health benefits have been deducted by the court. In situations involving a judicial award of damages a reimbursement agreement, as described above would require the insured to repay the health insurer from proceeds where health benefits have been specifically subtracted, a situation which the legislature sought to prevent. A determination of whether Section 52-225c applie~ to situations other than a judicial award of damages must await judicial or legislative clarification. Pending such clarification, it is the Department's opinion that it is improper for an insurer to use a broadly drafted reimbursement provision or agreement which requires reimbursement from any sums coll~cted om a legally responsible third party, w;~ut recogn'tion of situations where such reimbursement mc__:e inappr riate. I ns ur ance Com missione r's signature Phone: 165 Capitol Avenue • Hartford, CT 06106 An Equal Opportunity Employer