New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 16 - MINIMUM STANDARDS FOR INDIVIDUAL HEALTH INSURANCE
Section 11:4-16.4 - Policy definitions
Universal Citation: NJ Admin Code 11:4-16.4
Current through Register Vol. 56, No. 6, March 18, 2024
(a) Except as provided hereafter, no health insurance policy delivered or issued for delivery in this State shall contain definitions respecting the matters set forth below unless such definitions comply with the requirements of this section.
1. "Accident", "accidental injury",
"accidental means", shall be defined to employ "result" language and shall not
include words which establish an accidental means test or use words such as
"external, violent, visible wounds" or similar words of description or
characteristics.
i. "Injury" shall not be
defined more restrictively than accidental bodily injury sustained by the
insured person which is the direct cause of the loss, independent of disease,
bodily infirmity or other cause, and which occurs while the insurance is in
force.
(1) Such definition may provide that
injuries shall not include injuries for which benefits are provided under
workers' compensation, employer's liability or similar law, out-of-State
automobile insurance coverage as defined at
11:3-37.2 and provided for at
11:3-37.3, or injuries occurring
while the insured person is engaged in any activity pertaining to any trade,
business, employment, or occupation for wage or profit.
2. "Sickness" shall not be defined
in health insurance policies that are not health benefits plans more
restrictively than as follows: a sickness or disease that causes loss
commencing while the policy is in force and that is not excluded under a
preexisting condition limitation. A definition may provide for a probationary
period that will not exceed 30 days from the effective date of the coverage of
an insured person. Such probationary period shall not apply to newly-born
children where immediate coverage is required by
N.J.S.A.
17B:26-2. The definition may also be modified
to exclude sickness or disease for which benefits are provided under any
workers' compensation, occupational disease, employer's liability, or similar
law.
3. Preexisting conditions
shall not be defined or applied in a health insurance policy that is a health
benefits plan. In all other plans, "preexisting condition" shall not be defined
to be more restrictive than as stated in (a)3i and ii below. Subparagraph (a)3i
shall apply where the insurer uses an application form designed to elicit the
complete health history of a prospective insured and, on the basis of the
answers on that application, underwrites in accordance with the insurer's
established standards. Subparagraph (a)3ii shall apply where the insurer elects
to use a simplified application, with or without a question as to the
applicant's health at the time of application, or elects not to use any
application.
i. A condition misrepresented or
not revealed in the application and for which symptoms existed prior to the
effective date of coverage that would cause an ordinarily prudent person to
seek diagnosis, care or treatment or for which medical advice or treatment was
recommended by or received from a physician.
ii. A condition for which symptoms existed
that would cause an ordinarily prudent person to seek diagnosis, care or
treatment within a one year period preceding the effective date of the coverage
or a condition for which medical advice or treatment was recommended by a
physician or received from a physician within a five year period preceding the
effective date of the coverage.
4. "Hospital" may be defined in relation to
its status, facilities and available services or to reflect its accreditation
by the Joint Commission on Accreditation of Hospitals.
i. The definition of the term "hospital"
shall not be more restrictive than one requiring that the hospital:
(1) Be an institution operated pursuant to
law; and
(2) Be primarily and
continuously engaged in providing or operating, either on its premises or in
facilities available to the hospital on a prearranged basis and under the
supervision of a staff or duly licensed physicians, medical, diagnostic and
major surgical facilities for the medical care and treatment of sick or injured
persons on an inpatient basis for which a charge is made; and
(3) Provide 24 hour nursing service by or
under the supervision of registered graduate professional nurses
(R.N.'s).
ii. The
definition of the term "hospital" may state that such term shall not be
inclusive of:
(1) Convalescent homes,
convalescent, rest, or nursing facilities;
(2) Facilities primarily affording custodial,
educational or rehabilitative care;
(3) Facilities for the aged or drug addicts;
or
(4) Any military or veterans
hospital or soldiers home or any hospital contracted for or operated by any
national government or agency thereof for the treatment of members or
ex-members of the armed forces, except for services rendered on an emergency
basis where a legal liability exists for charges made to the individual for
such services.
5. "Convalescent nursing home", "extended
care facility", or "skilled nursing facility" shall be defined in relation to
its status, facilities, and available services.
i. A definition of such home or facility
shall not be more restrictive than one requiring that it:
(1) Be operated pursuant to law;
(2) Be approved for payment of Medicare
benefits or be qualified to receive such approval, if so requested;
(3) Be primarily engaged in providing, in
addition to room and board accommodations, skilled nursing care under the
supervision of a duly licensed physician;
(4) Provide continuous 24 hour a day nursing
service by or under the supervision of a registered graduate professional nurse
(R.N.); and
(5) Maintain a daily
medical record of each patient.
ii. The definition of such home or facility
may provide that such term shall not be inclusive of:
(1) Any home, facility or part thereof used
primarily for rest;
(2) A home or
facility for the aged or for the care of drug addicts; or
(3) A home or facility primarily used for the
care and treatment of mental diseases or disorders, or custodial or educational
care.
6. "One
period of confinement" means consecutive days of in-hospital service received
as an inpatient, or successive confinements due to the same or related causes,
when discharge from and readmission to the hospital occurs within a period of
time not more than 90 days or not more than three times the maximum number of
days of in-hospital coverage provided by the policy to a maximum of 180
days.
7. "Physician" may be defined
by including words such as "duly qualified physician" or "duly licensed
physician". The use of such terms requires an insurer to recognize and to
accept, to the extent of its obligation under the contract, all providers of
medical care and treatment when such services are within the scope of the
provider's licensed authority and are provided pursuant to applicable
laws.
8. "Nurses" may be defined so
that the description of nurse is restricted to a type of nurse, such as
registered graduate professional nurse (R.N.), a licensed practical nurse
(L.P.N.), or a licensed vocational nurse (L.V.N.). If the words "nurse",
"trained nurse" or "registered nurse" are used without specific instruction,
then the use of such terms requires the insurer to recognize the services of
any individual who qualifies under such terminology in accordance with the
applicable statutes or administrative rules of the Board of Nursing or any
other registry board of the State.
9. "Total disability" shall not be defined
more restrictively during the first year of disability in a policy that
provides disability income benefits than the inability of the insured to engage
in his own occupation. During any other period of disability, total disability
shall not be defined more restrictively than the complete inability of the
insured to engage in any employment or occupation for which the insured is
qualified by reason of education, training or experience. Total disability need
not be deemed to exist if the insured is actually engaged in any employment or
occupation for wage or profit.
i. Total
disability may be defined in relation to the inability of the person to perform
duties but may not be based solely upon an individual's inability to:
(1) Perform "any occupation whatsoever", "any
occupational duty", or "any and every duty of his occupation" or;
(2) Engage in any training or rehabilitation
program.
ii. An insurer
may specify the requirement of the complete inability of the person to perform
all of the substantial and material duties of his regular occupation or words
of similar import. An insurer may require care by a physician (other than the
insured or a member of the insured's immediate family).
10. "Partial disability" shall be defined in
relation to the individual's inability to perform one or more but not all of
the "major", "important", or "essential" duties of employment or occupation or
may be related to a "percentage" of time worked or to a "specified number of
hours" or to "compensation". Where a policy provides total disability benefits
and partial disability benefits, only one elimination period may be
required.
11. "Residual disability"
shall be defined in relation to the individual's reduction in earnings and may
be related either to the inability to perform some part of the "major",
"important", or "essential" duties of employment or occupation, or to the
inability to perform all usual business duties for as long as is usually
required. A policy which provides for residual disability benefits may require
a qualification period, during which the insured must be continuously totally
disabled before residual disability benefits are payable. The qualification
period for residual benefits may be longer than the elimination period for
total disability. In lieu of the term "residual disability", the insurer may
use "proportionate disability" or other term of similar import which in the
opinion of the Commissioner adequately and fairly describes the
benefit.
12. "Medicare" shall be
defined in any hospital, surgical or medical expense policy which relates its
coverage to eligibility for Medicare or Medicare benefits. Medicare may be
substantially defined as "The Health Insurance for the Aged Act, Title XVIII of
the Social Security Amendments of 1965 as Then Constituted or Later Amended",
or "Title I, Part I of Public Laws 89-97, as Enacted by the Eighty-Ninth
Congress of the United States of America and popularly known as the Health
Insurance for the Aged Act, as then constituted and any later amendments or
substitutes thereof" or words of similar import.
13. "Medicare eligible person" shall include
any person who is eligible by reason of age for Medicare as defined in
paragraph 12 above.
14. "Mental or
nervous disorders" shall not be defined more restrictively than a definition
including neurosis, psychoneurosis, psychopathy, psychosis, or mental or
emotional disease or disorder of any kind.
15. "Guaranteed renewable insurance" means
all individual insurance which grants an insured the right to continue the
policy in force by the timely payment of premiums until at least age 50, or in
the case of a policy issued after age 44 for at least five years from the date
of issue of the policy, during which period the insurer has no right to make
unilaterally any change in any provision of the policy while the policy is in
force, except that the insurer may make changes in premium rates by
classes.
16. "Noncancellable
insurance" or "noncancellable and guaranteed renewable insurance" means all
individual insurance which gives the insured the right to continue the
insurance in force by the timely payment of premiums set forth in the policy
until at least age 50, or in the case of a policy issued after age 44 for at
least five years from its date of issue, during which period the insurer has no
right to make unilaterally any change in any provision of the policy while it
is in force.
17. "Nonrenewable for
stated reasons only insurance" means all individual insurance which limits the
insurer's right of nonrenewal to reasons stated in the policy. The following
are acceptable reasons:
i. Fraud in applying
for the policy;
ii. Fraud in the
submission of claims;
iii.
Duplication of benefits or overinsurance in accordance with insurer's
standards;
iv. Attainment of a
specified age;
v. Discontinuance of
all policies issued on the same form in this State;
vi. In policies issued to employees of an
employer or to members of an association:
(1)
Termination of employment or membership;
(2) Discontinuance of all policies issued on
the same form to employees of the employer or to members of the
association.
vii. Change
of the insured's occupation to an occupation classified as more hazardous than
the original occupation;
viii.
Other reasons for nonrenewal which are appropriate to the coverage may be used
if they are approved by the commissioner.
Disclaimer: These regulations may not be the most recent version. New Jersey may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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