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
Universal Citation: NJ Admin Code 11:4-16.6
Current through Register Vol. 56, No. 18, September 16, 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.
(d) "Disability income protection coverage" shall be subject to the following standards:
1. "Disability income protection
coverage" is a health insurance policy which provides for periodic payments,
weekly or monthly, for a specified period during the continuance of disability
resulting from either sickness or injury or a combination thereof which:
i. "Provides that periodic payments which are
payable at ages after 62 and reduced solely on the basis of age are at least 50
percent of amounts payable immediately prior to 62;
ii. Contains an elimination period no greater
than:
(1) 90 days in the case of coverage
providing a benefit of one year or less;
(2) 180 days in the case of coverage
providing a benefit of more than one year but not greater than two years;
or
(3) Two years in all other cases
during the continuance of disability resulting from sickness or
injury;
iii. If a policy
contains an elimination period in excess of six months, provides a premium
waiver disability benefit which becomes operative not later than six months
after commencement of total disability regardless of whether or not income
indemnity is then payable, or provides for full reinstatement without evidence
of insurability during a continuous period of total disability if the policy
has lapsed after the sixth month of the elimination period;
iv. Has a maximum period of time for which
benefits are payable during disability of at least six months except in the
case of a policy covering disability arising out of normal pregnancy or
childbirth in which case the period for such disability may be one
month;
v. If the policy terminates
benefits at a specified age, provides a minimum benefit period of at least one
year or the length of the benefit period if less than one year;
vi. Where a policy provides that periodic
payments are reduced if the insured is not gainfully employed away from the
home, provides a benefit which is at least 50 percent of the full periodic
payment and for return of the pro rata unearned premium for the period the
insured is not so employed.
Paragraph (g)1 above does not apply to business buyout coverage.
2.
Elimination periods that do not comply with (d)1ii above may be used on a
supplemental basis as an additional benefit to an individual disability income
policy that otherwise complies with (d)1ii, if the insurer submits the
following to the Department:
i. A specimen
copy of that part of the policy which illustrates how the supplemental premium
rates will be shown; and
ii. A
certification by an officer of the insurer that:
(1) Every individual disability income policy
issued by the company will contain an elimination period/benefit period
combination which complies with (g)1ii above;
(2) Supplemental individual disability income
benefits *that* are not in compliance with (d)1ii above will only be used to
provide additional coverage on an individual disability income policy issued by
the insurer *that* has an elimination period/benefit period combination *that*
is in compliance with (d)1ii above;
(3) The part of the coverage that complies
with (d)1ii above represents at least 50 percent of the benefits provided by
the policy; and
(4) Any changes
made after issue will meet the requirements in (d)2ii(1) through (3) above to
ensure that compliance with (d)1ii will be maintained.
3. A cash value or premium refund
benefit may be included in disability income protection coverage if the
following conditions are met:
i. The insurer
must submit copies of sales or advertising literature and a statement of the
class or type of insureds to whom the policy will be sold;
ii. The benefit is only included in a policy
which is noncancellable or guaranteed renewable;
iii. The benefit payable is not reduced by an
amount greater than the aggregate of claims paid under the policy;
iv. If the cash value or premium refund
benefit depends on the policy being in force for a given term, and if the
insured dies or otherwise terminates coverage prior to the end of the term, an
appropriate benefit is provided. The benefit should be related to the number of
years the cash value of premium refund provision has been in force and to the
cash value or premium refund which would have been provided at the end of the
given term. Some variation by issue age may be allowed.
4. A social insurance benefit may be included
in disability income protection coverage if the following conditions are met:
i. Social insurance benefit is defined as a
disability income benefit which is payable when the insured is not receiving
disability benefits under government mandated programs including, but not
limited to, Federal Social Security, Workers' compensation or occupational
disability laws, automobile no-fault insurance;
ii. The amount payable for total disability
is a fixed dollar amount;
iii. The
insurer submits to the department the under-writing rules and benefit limits
applicable to the benefit and any promotional material that will be presented
to the proposed insured;
iv.
Experience on policies that include the benefit is kept and reported separately
from policies without the benefit.
(e) "Hospital confinement indemnity coverage" is a health insurance policy which provides daily benefits on an indemnity basis for a period of not less than 31 days during one period of hospital confinement for each person covered under the policy and which:
1. Provides a daily benefit of not less than
$ 40; and
2. Contains no
elimination period greater than three days.
(f) "Accident only coverage" is a health insurance policy which provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by accident. Accidental death and double dismemberment amounts under such a policy shall be at least $ 1,000 and a single dismemberment amount shall be at least $ 500.
(g) "Medicare supplement coverage" is a health insurance policy sold to a Medicare eligible person, which is designed primarily to supplement Medicare, or is advertised, marketed, or otherwise purported to be a supplement to Medicare and which meets the minimum benefit standards and other requirements set forth in N.J.A.C. 11:4-23.
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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