New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 16 - MINIMUM STANDARDS FOR INDIVIDUAL HEALTH INSURANCE › Section 11:4-16.6 - Minimum standards for benefits

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The following minimum standards for benefits are prescribed for the categories of coverage noted in the following subsections. No individual health insurance policy shall be delivered or issued for delivery in this State that does not meet the required minimum standards for the specified categories unless the Commissioner finds that such policies can be filed as a limited benefit health coverage and the outline of coverage complies with the appropriate outline in N.J.A.C. 11:4-16.8. This section does not apply to individual health insurance policies that are health benefits plans.
(b) Nothing in this section shall preclude the issuance of any policy combining two or more categories of coverage set forth in this section.
(c) General rules include the following:
1. All policies, except short-term nonrenewable policies, Medicare supplement policies and as otherwise provided in this paragraph, shall provide that the policyholder shall have the right to return the policy within 10 days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. With respect to Medicare supplement policies and policies issued pursuant to direct response solicitation, the policy shall provide that the policyholder shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason.
2. A "noncancellable", "guaranteed renewable", or "noncancellable and guaranteed renewable" policy shall not provide for termination of coverage of the spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than nonpayment of premium. The policy shall provide that in the event of the insured's death the spouse of the insured, if covered under the policy, shall become the insured.
3. In a family policy covering spouses the age of the younger spouse shall be used as the basis for meeting the age and durational requirements of the definition of "noncancellable" or "guaranteed renewable." However, this requirement shall not prevent termination of coverage of the older spouse upon attainment of the stated age limit (for example, age 65) so long as the policy may be continued in force as to the younger spouse to the age or for the duration specified in said definition.
4. If a policy contains a status type military service exclusion or a provision which suspends coverage during military service, the policy shall provide, upon receipt of written request, for refund of premiums as applicable to such person on a pro rata basis.
5. Policies which provide normal pregnancy and childbirth benefits shall cover pregnancy if conception occurs after the effective date of coverage or after a probationary period of not more than 30 days after the effective date of coverage.
6. In the event the insurer cancels or refuses to renew, policies providing normal pregnancy benefits shall provide for an extension of benefits as to pregnancy commencing while the policy is in force and for which benefits would have been payable had the policy remained in force.
7. Policies providing convalescent or extended care benefits following hospitalization shall not condition such benefits upon admission to the convalescent or extended care facility within a period of less than 14 days after discharge from the hospital.
8. Policies which provide surgical benefits based on a surgical schedule shall also provide that procedures not listed in the schedule and not otherwise excluded shall be covered on a basis consistent with listed procedures of comparable severity.
9. In a policy which provides a second surgical opinion benefit, the following conditions must be met:
i. The benefit includes a definition of elective surgery which is sufficiently clear to permit the average insured to distinguish between "elective" and "nonelective" surgery.
ii. Second surgical opinions will be rendered only by specialists who are clearly qualified in their field, who are independent of the physician who makes the original recommendation for surgery, and who have no financial interest in the outcome (for or against surgery) of their recommendations. "Clearly qualified" will be deemed satisfied by board certification in the field of proposed surgery or in the field of medical specialization concerned with the organ involved. "Independent" will be assumed if names of qualified second opinion specialists are provided by the insurer, although the insurer may provide other methods of designating specialists that result in an equal degree of independence. "No financial interest" will be deemed to exist if the specialist providing second opinions is prohibited from performing the recommended surgery, if his remuneration is not dependent on the nature of his recommendation, and if he has no financial involvement of any nature in a partnership, corporation, or office with the first physician recommending surgery.
iii. A second surgical opinion cannot be mandatory unless the insurer is able to provide to the insured names of qualified specialists who are within convenient access to the insured. "Mandatory" means that payment of claims for elective surgery is conditioned on having obtained a second opinion.
iv. If the policy requires the insured to pay for any part of the second surgical opinion (copayment, deductible, maximum amount), the premium for the policy cannot exceed the premium payable for a comparable policy without second surgical opinion benefits, and the insurer shall disclose to the insured that his or her out-of-pocket expenses may exceed the expenses which would result from an otherwise comparable policy without a second surgical opinion benefit. See 11:4-16.8(d), (e) and (f) for disclosure requirements.
10. Any policy providing coverage for the recipient in a transplant operation shall also provide reimbursement of any medical expenses of a live donor to the extent that benefits remain and are available under the recipient's policy, after benefits for the recipient's own expenses have been paid.
11. A policy may contain a provision relating to recurrent disabilities; provided however, that no such provision shall specify that a recurrent disability be separated by a period greater than six months. A subsequent disability due to an unrelated cause is not a recurrent disability.
12. Policies which provide disability benefits that are limited to business or professional expenses must also provide for a pro rata premium refund at the request of the insured, if such expenses cease (e.g., a professional person discontinues his office). The premium refund may be limited to one year's premium.
13. If disability is a criterion for payment of benefits under a policy, the policy must include a definition of disability.
14. Policies which provide disability benefits shall provide that a period of disability begins on the date disability commences. A period of disability shall not be based on the date of first medical treatment.
15. Disability income benefits, if provided, shall not require the loss to commence less than 30 days after the date of accident, nor shall any policy which the insurer cancels or refuses to renew require that it be in force at the time disability commences if the accident occurs while the policy was in force.
16. Accidental death and dismemberment benefits shall be payable if the loss occurs within 90 days from the date of the accident. There shall be no requirement that the insured be disabled or that the policy be in force at the time of loss.
17. When accidental death and dismemberment coverage is part of the insurance coverage offered under the contract, the insured shall have the option to include all insureds under such coverage and not just the principal insured.
18. Specific injury benefits shall not be in lieu of other benefits unless the specific benefit equals or exceeds the other benefits.
19. A policy which provides benefits for injury sustained while the insured is riding in a vehicle shall not require that the insured be within the enclosed part of the vehicle.
20. In a policy which includes an option to purchase additional insurance, the following conditions must be met:
i. The option can only be included in a policy which is noncancellable or guaranteed renewable.
ii. Any underwriting requirements that must be satisfied in order to exercise the option (income limits, health status, other insurance) must be specified in the option. The option may not state that no evidence of insurability is required, if such underwriting criteria are imposed.
iii. The time limit on certain defenses for the additional insurance shall run from the date of the original policy for the duration specified in the original policy, except that such time limit may run from the effective date of the additional insurance for any representations material to the issue of new insurance.
iv. Prior to each option date, the insurer shall notify the insured of the availability of the additional insurance. Such notice shall be given in sufficient time to exercise the option.
v. Guaranteed insurability options may only provide for additional coverage, without evidence of insurability, of a kind directly comparable to the kind of coverage provided by the basic policy to which the option is attached.
21. Policies which reduce benefits at a specified age shall only be issued at ages which provide full coverage for at least five years. This rule shall not apply to hospital-medical expense benefits or hospital indemnity benefits which are reduced at the Medicare eligible age nor to disability income benefits where the basis for the reduction is retirement at 65 or a later age.
22. Termination of the policy shall be without prejudice to any claim for continuous loss which commenced while the policy was in force; however, the payment of benefits after the termination date may be predicated upon the continuous disability of the insured, limited to the duration of the benefit period or payment of the maximum benefits.