North Carolina Accident and Health Insurance Laws Exam 2025

North Carolina Accident and Health Insurance Laws Exam 2025 What must applications for individual and family health insurance policies in North Carolina include? - -Applications must be signed by the applicant and contain an agent's certification that the information provided by the insured has been accurately recorded. What happens if a health insurance policy has an age limit and the insurer accepts a premium during that period? - -The policy's coverage continues in force until the end of the period for which the premium was paid. What is the insurer's liability if the insured's age was misstated on a policy? - -The insurer is only liable for refunding the premium paid for the period not covered by the policy. Can physicians and institutions be denied payment for services provided by a registered nurse? - -No, they may not be denied payment or reimbursement for services provided by a registered nurse. What must health insurance policies do regarding services provided by physician assistants? - -Health insurance policies must pay benefits for services provided by physician assistants. List at least five types of health care providers that health insurance policies must pay benefits for. - -Optometrists, podiatrists, dentists, chiropractors, clinical social workers, substance abuse professionals, professional counselors, psychologists, pharmacists, pastoral counselors, physician assistants, marriage and family therapists, advanced practice registered nurses, clinical mental health counselors. What happens if the insured chooses a provider outside the insurer's network? - -The insured has the right to choose a provider, but a higher level of benefits will be paid if the provider is within the insurer's network. What must an insurer do before terminating a policy for nonpayment of premium through payroll deductions? - -The insurer must give the employer written notice stating the amount of premium in default at least 15 days before the policy is canceled. Who is considered an insurance fiduciary? - -An insurance fiduciary can be a person, employer, principal, agent, trustee, or third-party administrator responsible for paying group health or group life insurance premiums or funding a group health plan. What must an insurer provide to the fiduciary when a group health or life insurance policy is issued or renewed? - -The insurer must provide a written notice stating that the Insurance Insurance fiduciary may not cause the policy to be canceled or not renewed due to nonpayment of premiums. What notice must fiduciaries provide if they plan to stop paying premiums for a policy? - -Fiduciaries must provide at least 45 days written notice to the insureds. What is the consequence for an insurance fiduciary who violates premium payment requirements? - -They are guilty of a Class H felony and may be ordered to make restitution to insureds who incurred expenses due to termination of coverage. What is a preferred provider organization (PPO)? - -A PPO assembles a panel of preferred providers who accept discounted rates for their health-care services in exchange for being part of the panel. How are preferred provider contracts treated by the Commissioner? - -A preferred provider contract is considered approved unless the Commissioner disapproves the arrangement within 90 days of its filing. What is required for an agent to change an application for health insurance? - -An agent cannot change an application without the applicant's written consent. What is the significance of the application in relation to the policy when issued? - -The application must be attached to the policy when issued. What services can a licensed registered nurse be paid directly for? - -A licensed registered nurse may be paid directly for conducting medical examinations or procedures to collect evidence from crime victims. What is the role of the Commissioner regarding cost containment arrangements? - Insurers may enter into preferred provider contracts or other cost containment arrangements approved by the Commissioner. What must be done if a health insurance policy contains an age limit? - -If premiums are accepted during the age limit period, coverage continues until the end of the premium payment period. What happens if the correct age was stated on a policy regarding coverage? - -If the correct age would have prevented coverage from becoming effective or would have ended it, the insurer is liable only for refunding the premium for the period not covered. What is the minimum notice period for an insurer to inform an employer about premium default? - -At least 15 days before the policy is canceled. What is the penalty for an insurance fiduciary who fails to pay premiums? - -They may be guilty of a Class H felony and required to make restitution. Insurance Insurance What is the requirement for insurers regarding payments to health care providers? - Health insurance policies must pay benefits for services provided by a wide range of health care providers. What information must an insurer offering PPO plans file each year with the Commissioner? - -The PPO's name and address, the name, address, and nature of the organization administering the preferred provider benefit plan, the terms of agreements between the insurer and preferred providers, and any other information required by the Commissioner. Can a person enrolled in a PPO obtain health-care services from a nonparticipating provider? - -Yes, but the PPO may limit coverage for services obtained from a nonparticipating provider. What must a PPO provide to insureds regarding participating providers? - -A list of the current participating providers within the geographic area where most health-care services will be provided. What is prohibited regarding health plan payments and provider reimbursements? - -An insurer may not offset or reverse a health plan payment against a provider reimbursement for other medical charges unless it was for a specific medical charge under workers' compensation. What is the purpose of a Utilization Review Program? - -To give insurers control over a patient's care and allow intervention before treatment decisions are made to find cost effective alternatives. What are the components of a Utilization Review Program? - -Ambulatory review, case management, certification, concurrent review, discharge planning, prospective review, retrospective review, and second opinion. What does ambulatory review entail? - -The review of services provided in an outpatient setting. What is case management in the context of Utilization Review? - -A coordinated set of activities for individual patient management of serious or protracted health conditions. What does certification mean in Utilization Review? - -An insurer's determination that a service has been reviewed and meets requirements for medical necessity, appropriateness, health-care setting, level of care, and effectiveness. What is concurrent review? - -A review of medical services conducted during a patient's hospital stay or course of treatment. What is discharge planning? - -The formal process for determining the type of care a patient will receive after being discharged from a facility. Insurance Insurance What is prospective review? - -A review conducted before a patient is admitted or treated, including preauthorization or precertification. What is retrospective review? - -The review of services and supplies conducted after services have been provided to a patient. What is the purpose of a second opinion in the Utilization Review process? - -To allow a patient to obtain an evaluation by another provider to determine the necessity and appropriateness of the proposed service. What must insurers maintain regarding grievances from insureds? - -Written procedures for resolving grievances and records showing how each grievance was handled for five years. What must the certificate of coverage and member handbook describe? - -The insurer's grievance process and inform insureds about contacting the Commissioner's office or the Managed Care Patient Assistance Program for help. Which policies are exempt from general rules pertaining to individual and group health insurance? - -Workers' compensation insurance, policies issued by fraternal benefit societies, disability insurance, and accidental death and dismemberment insurance. What are the penalties for insurers, officers, and agents that violate health insurance policy requirements? - -Guilty of a Class 3 misdemeanor and may be fined up to $5,000 for each offense; the Commissioner may also revoke their license. What must the Commissioner do regarding accident and health insurance policies? - Approve all accident and health insurance policies before they are issued. What must all accident and health insurance policies state? - -The premium. What information must accident and health insurance policies disclose? - -When the insurance takes effect and terminates. Who can be insured under an accident and health insurance policy? - -Only one person, except for family policies. What must be clearly listed in an accident and health insurance policy? - -Any exceptions and limits on benefits. What is required to be included in an accident and health insurance policy? - -A form number. What part of the insurer's bylaws or charter cannot be included in the policy? - -No part of the insurer's bylaws or charter can be made part of the policy. Insurance Insurance What type of claims must be covered by accident and health insurance policies? - Claims that are subject to workers' compensation laws. What is the 'Right to Return' period for policyowners in North Carolina? - -At least ten days after the policy is delivered. What happens if a policyowner is unsatisfied with their policy during the 'Right to Return' period? - -They can return it for a full refund of the premium paid. What notice must individual and family health insurance policies contain in North Carolina? - -A notice warning that the policy may not be in force when a claim is made and advising the policyowner to report any misstatements or omissions in their application. What does the 'Entire Contract' provision state? - -The policy, endorsements, and attached documents constitute the entire insurance contract. What is required for changes to a health insurance contract to be valid? - -Changes must be approved and endorsed by an officer of the insurance company. What is the 'Time Limit on Certain Defenses' provision? - -After two years, the insurer cannot void the policy or deny a claim based on a fraudulent misstatement made in the application. What stipulation is there regarding pre-existing conditions after two years? - -An insurer cannot deny or limit a claim for loss or disability beginning after two years on the basis of a pre-existing condition that was not specifically excluded. What are the grace periods required for health insurance policies? - -At least seven days for weekly premiums, ten days for monthly premiums, and 31 days for all other policies. What happens if a policyholder fails to pay the renewal premium within the grace period? - -The policy can be reinstated if the insurer accepts payment later. What is the procedure for reinstatement if an application is required? - -The insurer will issue a conditional receipt until the application is approved. What happens if the insurer does not act on the reinstatement application within 45 days? - -The policy is automatically reinstated. What coverage does a reinstated policy provide? - -It covers losses from accidental injury immediately and losses from sickness beginning ten days after reinstatement. What is the time frame for a policyholder to give written notice of a claim? - -Within 20 days after a loss or as soon as reasonably possible. How long does the insurer have to send forms for filing proof of loss after receiving notice of a claim? - -15 days. What can a policyholder do if the insurer fails to send proof of loss forms? - -Provide proof of loss by giving a written statement. What must a policyholder do if it is not reasonably possible to give written proof of loss within the allowed time? - -Provide it as soon as reasonably possible. What is the time frame for providing proof of loss after a loss occurs? - -Proof of loss must be provided within one year from the loss, unless the policyholder is legally incapacitated. What rights does an insurer have regarding physical examinations and autopsies? - The insurer can conduct a physical examination of the insured as often as necessary and may conduct an autopsy during the contestability period in North Carolina, with all expenses paid by the insurer. How long must an insured wait before suing the insurer after filing proof of loss? - -An insured cannot sue the insurer until 60 days have passed since filing proof of loss. What is the deadline to file a lawsuit after filing proof of loss? - -The deadline to file a lawsuit is three years after filing the proof of loss. What is required for an insured to change the beneficiary of a policy? - -The insured can change the beneficiary by giving written notice to the insurer unless an irrevocable beneficiary designation is made. Is beneficiary consent required for the insured to change a beneficiary designation? - No, beneficiary consent is not required for the insured to surrender or assign the policy or to change a beneficiary designation. What happens if the insured changes to a more hazardous occupation? - -The insurer can reduce the policy's benefits if the insured changes to a more hazardous occupation. What happens if the insured changes to a less hazardous occupation? - -The insurer may reduce the premium and return any excess unearned premium to the insured. What occurs if the insured misstated their age in the application? - -Benefits payable will be adjusted to what the premiums would have purchased at the correct age. Insurance Insurance What is the limit on the total amount of insurance for one person with this insurer? - The total amount of insurance is limited to a specific amount, regardless of the number of policies issued; any excess is void and premiums returned. What is the maximum coverage amount from a single insurer for expense-incurred benefits? - -Coverage is limited to a specific maximum amount, regardless of the number of health insurance policies. What happens if the insurer is not notified of other existing coverage for the same risk? - -Benefits paid for expenses incurred will be prorated to prevent over-insuring the person. How does the insurer handle benefits for other insurance that is not expense-incurred? - -Benefits are prorated, and any premiums paid for excess coverage will be returned to the insured. Under what conditions can disability income insurance benefits be reduced? - -Benefits can be reduced if total monthly benefits exceed the greater of the insured's monthly earnings at the time of disability or their average monthly earnings for the two years prior. What happens if the insured fails to pay a premium when a claim is made? - -The insurer may deduct the unpaid premium from the amount payable to the insured or beneficiary. What occurs if a health insurance policy provision conflicts with state laws? - -The policy is automatically amended to conform to the minimum requirements of state laws. What losses can the insurer exclude from coverage? - -The insurer can exclude any loss arising from the insured's participation in a felony or engagement in an illegal occupation. What types of policies can insurers issue beyond traditional accident and health insurance? - -Insurers may issue limited policies that protect against specified accidents or sickness. What does hospitalization insurance provide benefits for? - -Benefits when the insured or their dependents are hospitalized. What is franchise accident and health insurance? - -An individual health insurance policy issued to five or more employees of a corporation or ten or more members of an association formed for purposes other than obtaining insurance. What does credit accident and health insurance do? - -Helps an insured pay off a loan if they die or become disabled, paying monthly benefits equal to the loan payment. Insurance Insurance What is included in a health benefit plan? - -An accident and health insurance policy, nonprofit hospital or medical service corporation contract, HMO contract, multiple employer welfare arrangement plan, and other benefit arrangements. What entities are considered health insurers? - -Health insurance companies, multiple employee welfare arrangements, hospital, medical, or dental service corporations, HMOs, group health plans, and others operating under North Carolina law. What must a new insurer provide if a group accident and health insurance policy is replaced? - -Coverage for individuals insured under the prior plan, regardless of active employment, hospital confinement, or pregnancy. Can an employee benefit plan limit benefits due to Medicaid eligibility? - -No, it cannot limit or exclude benefits because an employee is eligible for Medicaid. What are accident and health insurance policies required to cover? - -Certain diseases and illnesses, including diabetes, mental illness, and chemical dependency. Under what conditions are insurers not liable for losses due to intoxication or narcotics? - -Unless the narcotics were administered on a physician's advice. What is the renewability requirement for individual and family accident and health policies? - -They must be renewable at the policyholder's option, with a 30-day notice required for non-renewal during the first year. What must a health insurance policy provide for dependent children? - -Coverage must not end when a child reaches the limiting age if they are incapable of self-sustaining employment due to a disability and chiefly dependent on the policyholder. What proof may an insurer require regarding dependent children? - -Proof of incapacity and dependency within 31 days after the child reaches the limiting age and annually thereafter. What must insurers do if a parent is under a court order to provide health insurance for a child? - -Allow the parent to enroll the child under family coverage without restrictions. What are the conditions under which an insurer is required to cover a child? - -The insurer must cover the child until the court order is no longer in effect, the child is enrolled in comparable health coverage through another insurer, or the employer has terminated family health coverage under its group health plan. Can a health insurer deny enrollment to a child under a parent's health benefit plan? - No, an insurer may not deny enrollment based on the child being born out of wedlock, not being claimed as a dependent on the parent's federal income tax return, or not living with the parent or in the insurer's service area. Insurance Insurance When does coverage for newborns begin under their parents' health insurance? - Coverage begins from the moment of birth. What must a policyholder do to continue health coverage for a newborn? - -The policyholder must notify the insurer of the child's birth and may need to pay the premium within 30 days after the birth. When are foster children covered by health insurance? - -Foster children are covered upon placement in the foster home to the same extent as other family members. What constitutes a placement in a foster home? - -A placement occurs when a guardian or custodian assumes total or partial support of a minor child living in the home on a long-term basis. When does health insurance coverage begin for adopted children? - -Coverage begins upon adoption or when they are first placed for adoption. What is the legal definition of a child for adoption purposes? - -A child is defined as someone who is younger than 18 years of age when adopted or placed for adoption. Can a health benefit plan restrict coverage for an adopted child due to a pre-existing condition? - -No, a health benefit plan may not restrict coverage for an adopted child because of a pre-existing condition. What restrictions do insurers have regarding children with physical handicaps or intellectual disabilities? - -Insurers may not refuse to issue a policy, charge a higher premium, or limit benefits due to a child's physical handicap or intellectual disability. What must health benefit plans that offer pharmaceutical benefits allow insureds to do? - -They must allow insureds to select a pharmacy of their choice and cannot limit benefits based on pharmacy participation. Can insurers impose penalties for using one pharmacy over another? - -No, insurers may not impose a monetary penalty or offer an advantage for using one pharmacy instead of another. Are insureds required to purchase prescription drugs exclusively through a mail-order pharmacy? - -No, plans cannot require this as a condition of payment or reimbursement. What obstetrical-gynecological benefits must health benefit plans provide? - -Plans must provide benefits to female participants who are age 13