12 Mandatory Uniform Health Policy Provisions

In the world of health insurance regulation, consistency is key to protecting consumers. The National Association of Insurance Commissioners (NAIC) developed the Uniform Individual Accident and Sickness Policy Provisions Law to ensure that certain standard protections are included in every individual health insurance policy. These are often referred to as the "Mandatory Provisions."

For candidates preparing for the complete Health Insurance exam guide, mastering these 12 provisions is essential. While the exact wording may vary slightly between insurers, the substance of these provisions must be at least as favorable to the policyowner as the standard NAIC language. These provisions define the rights and duties of both the insurer and the policyholder, specifically regarding claims, contract changes, and coverage lapses.

The first set of provisions deals with the legal structure of the policy and what happens when premiums are missed.

• 1. Entire Contract; Changes: This provision states that the policy, including the endorsements and the attached papers (like the application), constitutes the entire contract. No changes are valid until approved by an executive officer of the insurer and attached to the policy. Agents do not have the authority to change the policy or waive any of its provisions.
• 2. Time Limit on Certain Defenses: Similar to the incontestability clause in life insurance, this provision limits the time an insurer can challenge a claim based on misstatements in the application. Generally, after two years, the insurer cannot deny a claim or void the policy except for fraudulent misstatements.
• 3. Grace Period: This allows the policyowner a period of time after the premium due date to pay the premium without the policy lapsing.
• 4. Reinstatement: If a policy lapses, this provision outlines how it can be put back in force. If the insurer requires a reinstatement application and issues a conditional receipt, the company has 45 days to reject the application; otherwise, it is automatically reinstated. Note that there is a 10-day waiting period for sickness coverage after reinstatement, though accidents are covered immediately.

These provisions establish a strict timeline for how a claim must be handled by both the insured and the insurance company. Understanding these numbers is critical for passing practice Health Insurance questions.

• 5. Notice of Claim: The insured must notify the insurer of a loss within 20 days, or as soon as reasonably possible.
• 6. Claim Forms: Upon receiving a notice of claim, the insurer must provide the claimant with claim forms within 15 days. If the insurer fails to provide the forms, the claimant can submit proof of loss in any written form describing the occurrence.
• 7. Proof of Loss: The claimant must provide written proof of loss within 90 days of the date of loss. If it is not reasonably possible to provide it within 90 days, the claimant has up to one year (unless the person is legally incapacitated).
• 8. Time of Payment of Claims: Claims must be paid immediately upon receipt of written proof of loss. For policies providing periodic indemnity (like disability income), payments must be made at least monthly.

The final four provisions cover the logistics of payments and legal protections.

• 9. Payment of Claims: This specifies to whom the benefits will be paid. Death benefits are paid to the beneficiary or the estate. Other benefits (like medical expenses) are paid to the insured unless assigned to the healthcare provider.
• 10. Physical Examination and Autopsy: The insurer has the right to examine the insured at its own expense while a claim is pending. The insurer also has the right to perform an autopsy where not prohibited by law.
• 11. Legal Actions: The insured cannot sue the insurer for at least 60 days after providing written proof of loss. Furthermore, any legal action must be initiated within three years of the time proof of loss was submitted.
• 12. Change of Beneficiary: The policyowner has the right to change the beneficiary at any time unless an irrevocable beneficiary has been named. If the beneficiary is irrevocable, the policyowner must get the beneficiary's written consent before making changes.