What Are Limitations And Exclusions?
It would be nearly impossible to find a health insurance policy that covers every illness or medical condition, although many coverages are mandated by law in some states. Most health insurance policies specify certain types of injuries, illnesses, or procedures for which they provide a lower level of coverage. Certain illnesses, injuries, and procedures may not be covered at all.
Limitations are conditions or procedures covered under a policy but at a benefit level lower than the norm. Exclusions, by comparison, are conditions or procedures that are completely omitted from coverage. Your health insurance policy should list all limitations and exclusions. Read this section carefully, as it may contain important information about the restrictions of your coverage.
What Are Some Common Limitations And Exclusions?
Limitations and exclusions vary from policy to policy. Following is a list of common limitations and exclusions a standard policy might include, although the trend is to cover many of these conditions and procedures:
A preexisting condition is an illness or injury that began or occurred before you obtained coverage under this policy. Preexisting conditions are often excluded from coverage or may be covered after a specified waiting period.
Tip: Under the Health Insurance Portability and Accountability Act of 1996 (HIPPA), you can't be denied or made to wait for coverage of preexisting conditions if you have had coverage under your group plan for at least 18 months (without any significant break in coverage) and you move from one group health insurance plan to another or from a group to an individual plan.
Tip: The Patient Protection and Affordable Care Act (PPACA) prohibits pre-existing condition exclusions for group health plans and individual health plans (grandfathered individual health plans may continue to impose such conditions).
Nonduplication of Payments/Coordination of Benefits
To prevent double coverage, many insurance policies specify that benefits will not be paid for amounts that are reimbursed by other insurance companies. This provision limits the total payment of benefits to 100 percent of covered expenses.
What Is A Rider?
Insurance policies are usually written in a standard form, much of which is dictated by state insurance law. If it is necessary to modify the standard policy to provide additional coverage or it is necessary to change the standard document at the request of the insurer or the insured, these changes can be made by way of a rider. The information to be conveyed in the rider is typed up on a separate piece of paper that is attached to the standard policy. An endorsement accomplishes the same goal, but is actually incorporated into the body of the existing policy.
What Are Some Common Riders?
In some health insurance policies, accidental death or dismemberment benefits may be doubled or tripled depending on the cause of death or specific type of dismemberment. This multiple indemnity may be included in the policy by way of a rider.
Waiver of Premium
Some policies may allow you to skip premiums during periods of extended hospitalization.
Also called an "impairment rider," this rider is used to specify a medical condition that might normally be covered but is not covered because it is a pre-existing condition. Although the particular condition is not covered, use of this rider allows the applicant to obtain insurance for other health-care needs when this condition might otherwise make the person uninsurable.
PPACA prohibits pre-existing condition exclusions for group health plans and individual health plans (grandfathered individual plans may continue to impose pre-existing conditions). Also, PPACA mandates that insurers offering new group or individual health plans (i.e., those plans that are not grandfathered) are prohibited from discriminating against an applicant based on his or her health status.
If the insurer agrees to provide coverage that is not included in the standard insurance contract, this coverage might be described in a rider.
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