Standard health policy provisions and group health eligibility

Two kinds of rules in one objective

This objective pairs two ideas the exam likes to test together: the standard provisions written into every individual health policy, and the rules on which groups may buy group health insurance in Florida.

Standard (uniform) provisions of an individual health policy

Individual health policies carry a set of mandatory uniform provisions that protect the insured. The ones tested most often:

• Entire contract; changes: the policy, plus any attached application and riders, is the whole contract. Only an executive officer of the insurer can approve a change, and an agent cannot change or waive any provision.
• Time limit on certain defenses: after the policy has been in force for a set period (two or three years, depending on the wording used), the insurer can no longer void it or deny a claim for misstatements in the application, other than fraudulent ones.
• Grace period: premiums may be paid late without lapse for 7 days on weekly-premium policies, 10 days on monthly-premium policies and 31 days on all others. Coverage stays in force during the grace period.
• Reinstatement: if the insurer accepts a late premium, the policy is reinstated. If a conditional receipt is given and the insurer does not act within 45 days, the policy is reinstated automatically. Accidents are covered immediately; sickness only if it begins more than 10 days after reinstatement.
• Notice of claim: the insured gives written notice within 20 days of a loss, or as soon as reasonably possible.
• Claim forms: the insurer must supply forms within 15 days of notice, or the insured may submit proof in any written form.
• Proof of loss: due within 90 days of the loss, and never later than one year unless the insured lacked legal capacity.
• Time of payment of claims: paid immediately on receipt of proof of loss; periodic (disability) benefits at least monthly.
• Payment of claims: to the insured, or to the named beneficiary for death benefits.
• Physical examination and autopsy: the insurer may examine the claimant at its own expense while a claim is pending, and may request an autopsy where the law does not forbid it.
• Legal actions: no lawsuit until 60 days after proof of loss is filed, and none after a limited period set by the policy.
• Change of beneficiary: the insured may change the beneficiary unless the designation is irrevocable.

Optional provisions (change of occupation, misstatement of age, other insurance, illegal occupation, intoxicants and narcotics, and similar) may be added, but the mandatory ones cannot be weakened.

Group health: who may be the policyholder

Florida defines group health insurance as coverage for groups of persons under a master policy issued to one of the groups the statute lists. The employer, union or association holds the master policy; each covered person receives a certificate. For Florida's group health rules, the terms "policy" and "insurer" include plans of self-insurance.

Florida's group health part lists, section by section, the eligible groups:

• Employee groups (the most common: one employer's employees)
• Labor union, association and small employer health alliance groups
• Trustee groups
• Debtor groups
• Teacher and student groups
• Additional groups meeting the statute's conditions

The same part also defines full-time employment, and contains rules on dependent coverage, special enrollment periods, preexisting conditions and guaranteed renewability.

Out-of-state group policies

A group health policy delivered outside Florida that covers a Florida resident must follow Florida's group health part, unless all three conditions are met:

1. it is issued to a qualifying group (employee, union, association, additional, blanket or franchise groups, a common-interest group formed for purposes other than insurance, a group formed to buy insurance whose benefits are reasonable and administration economical, or a group of the insurer's own agents);
2. Florida residents' certificates state, in contrasting color and at least 10-point type, that the benefits are "governed primarily by the law of a state other than Florida"; and
3. the policy provides the benefits Florida lists in that section.

Continuation for small employers

Federal COBRA does not reach the smallest employers. Florida's Health Insurance Coverage Continuation Act fills that gap for small-employer group plans, and does not apply where federal continuation is available.

Continuation normally runs up to 18 months. A beneficiary the Social Security Administration found disabled at the time of the qualifying event may extend it by 11 months (29 in total) by sending the written determination to the carrier within 60 days and before the 18 months end; the carrier may charge up to 150% of the group rate for those extra months. Continuation ends early if premiums are not paid on time, the person gains other group coverage without a preexisting-condition limit, becomes entitled to Medicare, or the employer drops coverage for all employees. An employee fired for gross misconduct is not a qualified beneficiary.