Section 7 - Health Insurance Rules
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o newborn coverage o disability policy rules o HMOs o claim procedures
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62 Terms
When does newborn coverage under a health policy begin?
At the moment of birth
What must newborn coverage include?
Birth abnormalities and congenital defects
Can newborn coverage require proof of insurability?
No
Must family health policies cover newborn children automatically?
Yes
Can coverage for newborns depend on payment of an additional premium first?
No
What is the purpose of newborn coverage laws?
To protect infants immediately after birth
What health condition must newborn coverage include?
Birth abnormalities
Can insurers delay newborn coverage until notification is received?
No
Does newborn coverage include congenital conditions?
Yes
Who is protected by newborn coverage provisions?
Newborn children under family policies
What is a disability insurance policy?
A policy providing income or medical benefits due to sickness or injury
What is the grace period for monthly premium disability policies?
10 days
What is the grace period for weekly premium disability policies?
7 days
How long after reinstatement before sickness claims are covered?
10 days
When are accident claims covered after reinstatement?
Immediately
How long after proof of loss can legal action begin against a health insurer?
60 days
How long after proof of loss can legal action no longer be brought?
3 years
How many years before a disability policy becomes incontestable?
2 years
What is reinstatement?
Restoring a lapsed policy to active status
What may happen if premiums are not paid before the grace period ends?
The policy lapses
What is proof of loss?
Written evidence supporting a claim
Within how many days should notice of claim usually be given?
20 days
Within how many days should proof of loss usually be submitted?
90 days
What is the purpose of the proof of loss provision?
To verify claims
Can insurers require proof of loss?
Yes
Must insurers provide claim forms after receiving notice of claim?
Yes
What is an unfair claims settlement practice?
Improper handling or denial of claims
Can insurers deny claims without investigation?
No
Must insurers explain claim denials?
Yes
Can insurers delay claim payments without reason?
No
What is an HMO?
Health Maintenance Organization
Who pays premiums to an HMO?
The subscriber
What is the purpose of an HMO?
To provide managed health care services
Do HMOs generally require use of network providers?
Yes
What is a subscriber in an HMO?
The person responsible for payment
Are HMOs focused on preventive care?
Yes
Can HMOs require referrals for specialists?
Yes
What is one advantage of HMOs?
Lower healthcare costs
What type of healthcare system do HMOs use?
Managed care
Do HMOs usually provide coordinated care?
Yes
Can disability policies be canceled during the grace period for nonpayment?
No
What is the purpose of the grace period?
To prevent immediate loss of coverage
Can reinstated policies impose waiting periods for sickness?
Yes
Can a disability policy deny claims after the incontestable period for minor misstatements?
Generally no
What is the incontestable clause?
A provision limiting policy disputes after a certain time
What happens if proof of loss is not submitted on time?
The claim may be delayed or denied
What must insurers do after receiving proof of loss?
Process claims promptly
Can legal actions be taken immediately after claim submission?
No
What is one example of an unfair claims practice?
Failing to promptly explain claim denials
What is one purpose of disability policy provisions?
Consumer protection
What type of policy provides benefits for sickness or injury?
Disability insurance
What is a lapse?
Termination of coverage for nonpayment
Can lapsed disability policies be reinstated?
Yes
What is required for reinstatement?
Payment of overdue premiums and possible evidence of insurability
Can health insurers require reasonable investigation before paying claims?
Yes
What is the purpose of claim procedures?
To standardize the handling of claims
Can insurers compel insureds to sue by offering low settlements?
No
Can insurers ignore claim communications?
No
What is one role of claim procedures?
Protect both insureds and insurers
Can insurers require timely notice of claims?
Yes
What happens during the grace period if a covered loss occurs?
Coverage remains active
What is one purpose of disability insurance?
Income and medical protection during sickness or injury