They also have protections against misleading incentives to purchase health insurance policies. False and misleading advertisements and inducements are prohibited as an unfair method of competition. Health plans are required to include information about major coverage limitations prominently in all of their advertisements. Materials Must Be Understandable State law requires that all materials given to consumers be understandable at a ninth grade reading level. However, the state allows each health plan to assess the readability of its consumer materials.
Health plans can exclude medical terminology in their assessment of the readability level.
In effect, insurance materials are often difficult for the average person to understand. Evidence of Coverage Health plans must provide members with an explanation of the services or benefits covered under the insurance plan. Health plans have specific requirements for what information must be included in the Evidence of Coverage or insurance policy. How Will the Health Plan Treat Certain Health Conditions Health plans that offer managed care products must provide members and prospective members certain information, upon their request. Health Plan Comparisons HMOs and PPOs are required to report certain information to the NC Department of Insurance.