Health Insurance Policy Provisions
Uniform provisions
Most health policies follow the NAIC uniform provisions: the entire contract clause; a time limit on certain defenses (typically two years, after which misstatements cannot be used to deny a claim); a grace period of 7 days for weekly, 10 days for monthly, and 31 days for other premiums; reinstatement with evidence of insurability; notice of claim within 20 days; claim forms furnished within 15 days; proof of loss within 90 days; payment of claims immediately or within 45 days; physical exam and autopsy rights; legal actions barred after three years; change of beneficiary; misstatement of age adjustment; and conformity with state law.
Renewability
The renewability clause defines the insurer's power. Noncancellable: the insurer cannot cancel or raise premium and must renew to a stated age. Guaranteed renewable: the insurer must renew but may raise rates for the entire class. Conditionally renewable, optionally renewable, and cancellable give the insurer progressively more exit room. Conversion privileges let a departing group member buy individual coverage without evidence of insurability.
Riders and limits
Impairment riders exclude a named condition; waiver of premium, multiple indemnity, return of premium, cost-of-living, and residual disability riders add benefits. Preexisting condition limitations must comply with federal portability rules.
Claims and continuation
Insurers must pay clean claims promptly and issue written denial notices with appeal rights, including external review. COBRA continuation runs 18 months for termination or reduced hours, 29 months for disability, and 36 months for certain family events; Hawaii law provides its own continuation for employees of small employers outside COBRA.
Traps: mixing the three grace periods, and confusing guaranteed renewable with noncancellable - only noncancellable locks the premium.
Rule of thumb: 20 days' notice, 15 days' forms, 90 days' proof, 3 years to sue.