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North Carolina Health Insurance Limitations & Exclusions

Policy Provisions Limitations and Exclusions

No matter what kind of health insurance plan you have, be sure to review and study your policy. It is important for you to understand your rights, obligations, covered services and excluded services. If at any time you do not understand your policy or have questions, you can contact the Department of Insurance at 1-800-546-5664 from anywhere within North Carolina. Our specialists are here to help you.

Some common provisions, limitations and exclusions in health insurance policies are:

Free-Look Period

When applying for an individual health insurance policy, you may return the policy to the company within the free-look period and receive a complete refund of all premiums paid, if you are not satisfied for any reason. The minimum free look period is 10 days, beginning with the date of policy delivery. Returning the policy during the free look period voids all benefits from policy inception.

Premium Payment Grace Period

Health insurance companies must allow policyholders a grace period after each premium due date. During the grace period, the policy remains in full force and effect. However, if a premium is not paid prior to the expiration of the grace period, the policy will lapse. Benefits typically terminate on the last day of the premium period for which premiums have been paid. The industry norm for premium grace periods is 31 days. In some instances, though, the grace period might be less than 31 days.

Deductible

The deductible is an initial out-of-pocket amount that members must pay for covered services, before the plan begins to pay. For example, a health plan may require a $250 annual or a $250 per illness deductible. Choosing a higher deductible may help lower your premium.

Coinsurance

Coinsurance is the amount (usually states as a percentage) that must be paid by the insured person for covered services, after the deductible has been met. For example, if a policy pays 80 percent of covered charges, then the insured person's coinsurance amount will be the remaining 20 percent of covered charges.

Note: When covering services rendered by out-of-network providers, some plans base their own payment and the member's coinsurance on "allowed" amounts. If the out-of-network provider's total charges are greater than the plan's allowed amount, the member may be billed by the provider for the remaining balance. Members who receive care from in-network providers should never be subject to balance billing, as long as the services were covered and (if necessary) properly authorized by the plan. Check your member handbook and contact your plan, if you have any questions about your out-of-pocket liability for health care services.

Copayment

This is a fixed dollar amount (such as $10, $20, etc.) that insured persons are required to pay directly to the provider, for covered services.

Coordination of Benefits

The Coordination of Benefits provision applies when a member is covered by two health plans. It spells out how the charges for covered services will be paid by the two plans, so that total benefits do not exceed total charges.

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