Plan types (indemnity, HMO, PPO, POS), cost sharing, HSAs and the ACA framework are covered in the national Medical Plans guide. This guide covers the North Carolina accident and health statutes, Chapter 58, Articles 50 to 55, that the state part of the Accident and Health exam tests: form and application rules, the 10-day free look, required coverage for children and screenings, and managed care rules.

Forms, applications and the free look

• Form approval. No accident and health form may be issued until the form, its risk classifications and its premium rates are filed and the form is approved (G.S. 58-51-1).
• Free look. Every individual or family hospitalization policy must carry a notice that the policyholder may return it within 10 days of receipt for a prompt premium refund. Coverage is void once the policy is mailed or delivered back (58-51-10).
• Applications (58-50-5):
  • An individual policy is issued only on a signed written application.
  • When a resident producer takes it, the application must carry the producer's certificate that the answers were recorded accurately.
  • No one but the applicant may alter it without the applicant's written consent.
  • A false statement bars recovery only if it materially affected acceptance of the risk or the hazard assumed.
• Nonconforming policies. A policy that conflicts with Articles 50 to 55 is valid, but it's read as if it complied with the statutes (58-50-15).
• Family policies. An individual policy may cover the spouse, dependent children, or children under a specified age of no more than 19, and other dependents (58-51-5).
• Age limits. If the insurer accepts premium for a period that runs past the policy's age limit, coverage continues through the period paid for (58-50-20).
• Insureds over 65. For a new individual hospitalization or A&H policy issued to someone over 65, preexisting conditions include only conditions specifically eliminated by rider (58-51-60).
• Payroll deduction. If an employer fails to remit the premium on an individual policy paid by payroll deduction, the insurer must mail the insured notice at least 15 days before the policy lapses (58-50-35).

Children

• Newborns are covered from the moment of birth. If an added premium is needed, the newborn must be enrolled within 30 days for coverage to run from birth. Adopted and foster children are treated the same way from placement (58-51-30).
• Adopted children must be covered from placement, even before the adoption is final, with no preexisting condition restriction (58-51-125).
• An insurer may not deny a child's enrollment because the child was born out of wedlock, isn't claimed as a tax dependent, or doesn't live with the parent (58-51-120).
• Disabled dependents stay covered past the limiting age while they're incapable of self-support and chiefly dependent. Proof is due within 31 days of reaching the limiting age (58-51-25).

Required benefits (examples tested)

• Diabetes: outpatient self-management training, equipment, supplies, medications and lab work (58-51-61).
• Mammograms (58-51-57):
  • a baseline at ages 35–39
  • one every other year at ages 40–49, or more often on a physician's recommendation
  • one every year from age 50
• PSA prostate screening when recommended by a physician (58-51-58).
• Direct OB-GYN access without a referral for female members age 13 or older (58-51-38).

Managed care

• Preferred provider plans steer enrollees to contracted providers through differences in deductibles, coinsurance or copayments (58-50-56).
• Utilization review is a set of formal techniques that evaluate the clinical necessity, appropriateness, efficacy or efficiency of care (58-50-61).
• External review (58-50-79). If the insurer issues no written decision within 60 days after a second-level grievance is filed, the member is treated as having exhausted internal appeals and may seek external review.

Exclusions and renewability

• An insurer may exclude losses from intoxication or non-prescribed narcotics. That exclusion can't be used in a medical expense policy (hospital, medical and surgical coverage) (58-51-16).
• Renewability notice (58-51-20). For policies covered by this section, nonrenewal requires:
  • 30 days' notice before the premium due date during the first year
  • after that, notice of about one-fourth of the months of continuous coverage, but never more than two years

Required policy provisions (grace periods, notice of claim, proof of loss) are in the North Carolina Individual Accident and Health Provisions guide. Group continuation and conversion are in the North Carolina Group Health Insurance guide.

Common exam traps

• North Carolina's free look for individual hospitalization policies is 10 days.
• Newborns are covered from birth if enrolled within 30 days when added premium is required.
• Children can't be denied enrollment for not living with the parent or not being a tax dependent.
• Direct OB-GYN access starts at age 13. Annual mammograms start at 50.
• The intoxicants exclusion can't appear in a medical expense policy.