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Limitations & Exclusions from North Carolina Health Insurance

Pre-Existing Conditions

A health plan may refuse to pay for treatment of health conditions that existed prior to your enrollment in a health plan. For group health plans, both federal and North Carolina laws place time limits on the exclusion period for pre-existing conditions. Under federal and North Carolina law, a pre-existing condition is one for which you received medical advice or treatment within six months prior to enrolling in the plan. The maximum pre-existing condition exclusion period for timely enrollees (individuals who enrolled in the group plan at the first opportunity to do so) is 12 months. An 18 month pre-existing condition exclusion period may be imposed on late enrollees (anyone who did not enroll when they were first eligible to do so). If you have an individual major medical plan, a pre-existing condition may be defined as a health condition for which you received medical advice, diagnosis, care or treatment within 12 months immediately prior to the effective date of your plan. The maximum pre-existing conditions waiting period for individual coverage is 12 months. Generally, pre-existing condition waiting periods under both group and individual plans can be reduced by the length of time that coverage was maintained under prior health insurance plans, provided that there was not a lapse of 63 days or more between plans.

Portability

For many years, people have been concerned about the effect that changing jobs can have on health insurance coverage. Previously, medical conditions covered under a prior plan were often not covered under the subsequent plan. The Health Insurance Portability and Accountability Act (HIPAA), though, guarantees that insured persons get "credit" for the time covered under the previous plan, provided that the period between plans is no more than 63 days. Specifically, insurance companies must reduce any pre-existing condition limitation periods by the amount of time that the insured person was covered under prior creditable coverage.

Any coverage under a group plan (including COBRA or State Continuation), individual health insurance policy, Medicare or Medicaid or North Carolina's Health Choice program or comparable children's health plan offered by another state is considered "creditable coverage." As proof of coverage, employers and/or insurance companies are required to provide a "certificate of creditable coverage" to insured persons when coverage ends. That certificate is used to show the person's new health plan the amount of pre-existing credit to which the person is entitled.

If your coverage with a plan ends for any reason, it is very important that you save this certificate of creditable coverage. Benefits for pre-existing medical conditions cannot be denied under any plan's pre-existing condition limitation provision if the person has had creditable coverage for at least 12 months without a break (or lapse) in coverage of more than 63 days.

Incontestable Provision

Generally, insurance companies can contest the validity of a policy within the first two years after the policy is issued (or reinstated), if they suspect that information on an application was misstated or misrepresented, and that this information affected the insurance company's decision to issue the policy.

Lifetime Limits

Most health insurance policies limit the total dollar amount that the policy will pay over the course of the insured person's lifetime (such as $1 million). Once this limit has been reached, policy benefits will cease.

Annual Limits

Annual limits cap the total dollar amount of benefits payable during the course of the policy year, and usually pertain to a specific type of benefit or covered service.

Out-Of-Pocket Maximums

Many policies limit the total coinsurance amount you must pay each year. Once you reach the coinsurance limit specified in your policy, the insurance company will pay 100 percent of covered charges for the remainder of the year.

Usual, Customary and Reasonable (UCR) Charges

Insurance companies may (for some covered services) base their reimbursement amounts on Usual, Customary and Reasonable (UCR) charges, if permitted under the policy contract. This is typically the case for treatment received from out-of-network providers. Generally, UCR determinations are based upon average costs, in your local area, for the health care services in question.

Coverage Exclusions

Although you may purchase a plan that covers most medical, hospital, surgical and prescription drug expenses, no health plan will cover every conceivable medical expense you may incur. Examples of common exclusions include:

Vision care (eye exams, glasses, contacts, etc.)
Hearing aids
Dental care
Cosmetic surgery
Experimental treatments
Specific Treatments (e.g., sterilization, acupuncture, etc.)

Coverage by Region:

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