13.1 Accident & Health Claims: Accidental Injury vs. Sickness, Disability Income, Medical Expense & Long-Term Care

Accident & Health Claims: Accidental Injury vs. Sickness, Disability Income, Medical Expense & Long-Term Care

Exam Focus: Accident and Health Insurance Basics is worth 6% of the Series 17-70 — roughly six scored questions. The general adjuster license under 11 NYCRR 26.3(j) covers subdivisions (a) through (g), and the casualty authority in 26.3(g) pulls health service charges, workers' compensation and disability exposures onto your desk. Learn the trigger definitions first: whether a loss is an accidental injury or a sickness decides which benefit provision applies, when the elimination period starts, and whether a limited policy pays at all.

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Why an Independent Adjuster Needs A&H Fundamentals

An independent general adjuster in New York rarely writes the first-party health claim, but A&H concepts are embedded in almost every casualty file:

• A bodily injury liability claim is valued from medical expense and lost-income documentation produced under the claimant's health and disability plans.
• No-Fault (Article 51) basic economic loss is, functionally, a statutory medical expense and loss-of-earnings benefit sitting inside an auto policy.
• Coordination questions — which carrier pays first, whether a health plan has a lien, whether a disability carrier will seek reimbursement — turn on A&H vocabulary.
• Homeowners Coverage F (medical payments to others) and CGL Coverage C are medical expense coverages written on a no-fault basis.

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The Two Claim Triggers: Accidental Injury and Sickness

Every accident and health contract is built on a definition of the insured event. Reading that definition precisely is the whole job.

Accidental Injury

An accidental injury is bodily harm caused by a sudden, unforeseen, external event, independent of all other causes. Two competing standards appear in policy language and the distinction is heavily tested:

• Accidental Means (the narrower, older standard): both the cause and the result must be unintended. A claimant who deliberately jumps from a loading dock and shatters a heel has an intended cause and an unintended result — no coverage under strict accidental-means wording.
• Accidental Bodily Injury / Accidental Results (the broader, modern standard): only the result must be unintended. The same loading-dock claimant is covered.

Sickness

A sickness (or illness) is a disease or physical condition that first manifests itself while the policy is in force and after any applicable probationary period (commonly 10 to 30 days for sickness on individual policies). Because sickness has no single dramatic event, the operative question is when the condition first manifested, which is what makes pre-existing condition provisions the most litigated clause in individual A&H.

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Principal Types of Losses and Benefits

The blueprint groups A&H benefits into three families. Know what each one indemnifies.

1. Loss of Income From Disability

Disability income (DI) replaces a percentage of earnings — typically 60% to 70% of gross income, because the benefit is usually received income-tax-free when the individual paid the premium with after-tax dollars. Key structural terms:

• Elimination (waiting) period: the number of days of disability that must elapse before benefits accrue — commonly 30, 60, 90 or 180 days. It is a time deductible, and benefits are ordinarily paid in arrears.
• Benefit period: how long benefits run once payable — two years, five years, to age 65, or lifetime.
• Total disability definitions:
  • Own occupation: the insured cannot perform the material duties of their own occupation. Most generous.
  • Any occupation: the insured cannot perform the duties of any occupation for which they are reasonably suited by education, training and experience. Most restrictive; this is the Social Security standard.
  • Split definition: own-occupation for an initial period (often 24 months), then any-occupation.
• Residual / partial disability: pays a proportionate benefit when the insured returns to work at reduced earnings. The benefit is generally proportionate to the loss of income, not to the loss of time.
• Recurrent disability: a relapse from the same cause within a stated window (often six months) is treated as a continuation of the original claim, so the elimination period is not re-imposed.
• Presumptive disability: loss of sight in both eyes, hearing in both ears, speech, or any two limbs is presumed total and permanent, with no elimination period.

2. Hospital and Medical Expense

Medical expense coverage reimburses the cost of care rather than replacing income. The structural vocabulary:

• Deductible (per-cause or calendar-year), coinsurance (commonly 80/20), and an out-of-pocket maximum after which the plan pays 100%.
• Stop-loss provisions, inside limits (per-day room and board caps in older plans), and lifetime or annual maximums.
• Basic vs. major medical: basic plans pay first-dollar for defined services with no deductible but low limits; major medical layers a large limit over a deductible and coinsurance. A comprehensive major medical plan merges the two.
• Network structures: indemnity/fee-for-service, PPO, EPO, HMO and point-of-service, each changing the claimant's out-of-pocket exposure and therefore the special damages you are valuing on a bodily injury file.

3. Long-Term Care Expense

Long-term care (LTC) insurance pays a daily or monthly benefit for custodial, intermediate and skilled care in a nursing facility, an assisted living facility, or at home. The benefit trigger is usually the inability to perform a stated number (commonly two) of the six Activities of Daily Living — bathing, dressing, transferring, toileting, continence and eating — or a severe cognitive impairment such as Alzheimer's disease. LTC policies carry their own elimination period measured in days of service, and New York's Partnership for Long-Term Care program allows qualifying policies to shield assets from Medicaid spend-down.

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Coordination With the Casualty File

When a claimant's medical bills have already been paid by a health plan, disability carrier or no-fault insurer, the adjuster valuing a liability claim must identify:

• Collateral source documentation — in New York, CPLR 4545 permits a court to reduce a personal injury award by amounts the plaintiff has been or will be reimbursed from collateral sources, with an offset for premiums paid.
• Statutory and contractual liens — Medicare, Medicaid, New York hospital liens under Lien Law § 189, and workers' compensation liens under WCL § 29 (developed in Section 11.3).
• General Obligations Law § 5-335, which bars most private health insurer reimbursement out of a personal injury settlement.

Building the medical special damages correctly — billed charges, amounts actually paid, write-offs, and future care — is what separates a defensible reserve from a guess.