Free Group Health Insurance Study Guide
North Carolina Accident & Health exam — Group Health Insurance.
Group underwriting, federal COBRA, HIPAA and the ACA group rules are covered in the national Group Health Insurance guide. North Carolina adds its own rules:
- a state continuation law (G.S. 58-53-5 and following)
- a conversion privilege
- rules for franchise and blanket coverage
- protection for employees when an employer stops paying premiums
Types of group-related coverage
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Blanket coverage (58-51-75) may be issued to:
- common carriers, for their passengers
- employers, for employees exposed to exceptional hazards
- schools and colleges, for their students
- volunteer fire and rescue organizations
- qualifying associations
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Franchise insurance (58-51-90) is individual A&H policies issued under an arrangement with:
- an employer of five or more employees, or
- an association or union of 10 or more members
The employer or association remits the premiums.
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Accident definitions (58-3-30(b)). Group A&H policies issued on or after October 1, 1989 must define "accident" with result language, not an "accidental means" test.
Replacing a group plan (58-51-110)
If an employer replaces its group medical contract within 15 days after the old one ends, the new insurer must cover:
- everyone eligible under its own terms, and
- people who were validly covered under the old plan when it ended and are in an eligible class.
When the employer stops paying (58-50-40)
- An employer or other insurance fiduciary that intends to stop paying group health or life premiums must give every covered person written notice at least 45 days before coverage ends.
- Willfully violating this rule is a felony: Class F if losses total $100,000 or more, Class H if less. Restitution is required.
State continuation (58-53-5 to 58-53-40)
| Rule | North Carolina requirement |
|---|---|
| Eligibility | Continuously insured under the group for the three consecutive months before termination |
| Not available if | The person is or could be covered by another group plan within 31 days, or coverage ended for nonpayment of contributions |
| Election | At least 60 days after termination. Coverage is retroactive once the first contribution is paid |
| Cost | No more than 102% of the full group rate, paid in advance. Payments can't be required more often than monthly |
| What's continued | Hospital, surgical and major medical. Dental, vision and prescription drug benefits aren't required |
| Ends | At the earliest of: 18 months, nonpayment, eligibility for other group coverage, or termination of the group policy |
Conversion (58-53-45 to 58-53-70)
- When group or continuation coverage ends, a member may get an individual converted policy without evidence of insurability.
- The application and first premium are due within 31 days after the coverage ends.
- An insurer needn't issue a converted policy to someone who is or can be covered by Medicare, or who has similar coverage that would cause overinsurance.
Common exam traps
- State continuation lasts up to 18 months, costs up to 102%, and requires 3 months of prior coverage.
- The continuation election period is at least 60 days.
- Conversion: apply within 31 days, with no evidence of insurability.
- Franchise insurance needs 5 employees or 10 association members. It's individual policies, not a group policy.
- An employer stopping premium payments owes covered persons 45 days' notice.
Practice Group Health Insurance questions All Accident & Health topics
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
