The types of medical plans (indemnity, HMO, PPO, POS, HDHP/HSA), cost sharing and the federal Affordable Care Act rules are covered in the national Medical Plans guide. This guide covers what New Jersey adds: its two standardized market programs, how individual and small-group coverage is issued, rated and renewed, the prompt-pay law, and the state's independent appeals program. Citations are to the New Jersey Statutes (N.J.S.A.).

The Individual Health Coverage (IHC) Program

New Jersey regulates its individual major medical market through the Individual Health Coverage Program (N.J.S.A. 17B:27A-2 et seq.).

• Guaranteed issue: a carrier must issue individual health benefits plans to any eligible person and dependents (N.J.S.A. 17B:27A-6a).
• Modified community rating: individual plans are rated on a modified community rated basis (N.J.S.A. 17B:27A-6a). Pure community rating means one premium for everyone under a contract, based on the experience of all covered persons, without regard to age, sex, health status, occupation or geography (N.J.S.A. 17B:27A-2).
• Standard plans: a carrier must offer an eligible person a choice of at least three individual health benefits plans established by the program's board (N.J.S.A. 17B:27A-4b).
• Renewability: individual plans are renewable at the holder's option. The carrier may end coverage only for nonpayment or fraud or intentional misrepresentation of a material fact (N.J.S.A. 17B:27A-6b).
• Leaving the market: a carrier that wants to nonrenew all its individual plans needs the Commissioner's approval and must give each person at least 180 days' notice. It can be barred from re-entering for five years (N.J.S.A. 17B:27A-6c(4)).
• No health or genetic underwriting: individual hospital and medical expense policies may not exclude a person, or set rates or terms, based on an actual or expected health condition or a genetic characteristic (N.J.S.A. 17B:26-3.2).

The Small Employer Health (SEH) Program

• A small employer employed an average of 2 to 50 eligible employees in the prior year, most of them in New Jersey (N.J.S.A. 17B:27A-17).
• An eligible employee is a full-time employee with a normal work week of 25 or more hours (N.J.S.A. 17B:27A-17).
• Guaranteed issue: a small employer that elects coverage, pays the premium and meets the plan's participation requirements must be issued a policy (N.J.S.A. 17B:27A-19b).
• No pre-existing condition exclusions in small employer plans, whatever the cause of the condition (N.J.S.A. 17B:27A-22a).
• Every carrier that issues health benefits plans in New Jersey must be a member of the SEH Program, a nonprofit entity (N.J.S.A. 17B:27A-28).
• Small employer plans must offer state continuation to employees who lose coverage. The periods and premiums are in the New Jersey Group Health Insurance guide.

Dependents and newborns

• A policy with dependent coverage must keep it available for an adult child until age 26. Coverage can't be denied because the child doesn't live with the insured or isn't a tax dependent (N.J.S.A. 17B:27-30.1a).
• A newborn is covered from the moment of birth, including congenital defects. If an extra premium is required, notice and payment are due within 90 days for coverage to continue past that point (N.J.S.A. 17B:27-30).

Claims: the prompt-pay law

• Insurers must require providers to file claims. A covered person isn't required to, but may file one (N.J.S.A. 17B:26-9.1c).
• A clean claim must be paid by the 30th calendar day after receipt if filed electronically, or the 40th day if filed any other way (N.J.S.A. 17B:26-9.1d(1)).

Independent Health Care Appeals Program

• After a carrier's internal appeal, a member may ask the Independent Health Care Appeals Program to review a final decision to deny, reduce or end benefits on medical necessity or appropriateness grounds (N.J.S.A. 26:2S-11).
• The application is due within 60 days of the carrier's final decision.
• The program doesn't review a denial because a service simply isn't a covered benefit.

Free look for individual health policies

An individual health policy (not group or blanket) must let the policyholder return it within 10 days after receipt for a prompt refund of premium, fees and charges (N.J.S.A. 17B:26-3.1).

Guaranty protection

The New Jersey Life and Health Insurance Guaranty Association covers accident and health policies with no statutory dollar cap. It still pays no more than the policy itself would (N.J.S.A. 17B:32A-3e(4)).

Common exam traps

• SEH Program size: 2 to 50 eligible employees, and an eligible employee works 25 or more hours a week.
• Prompt pay: 30 days electronic, 40 days paper, for clean claims.
• Appeals: 60 days to apply for independent review, and only for medical-necessity decisions.
• Individual plans can be ended only for nonpayment or fraud. A carrier leaving the whole market gives 180 days' notice and faces a 5-year re-entry bar.
• Health status and genetics can't be used to exclude or rate individual medical expense coverage.