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Key Features of the Individual Health Coverage Program
NJ Individual Health Coverage Program Buyer's Guide

When offering individual plans, a carrier:
  • Must issue coverage to all eligible people without regard to anyone's past, existing or expected health conditions;

  • Must renew coverage for all eligible people without regard to anyone's past, existing or expected health conditions;

  • Must not apply a pre-existing condition limitation period to anyone; and

  • Must establish modified community rates for individual plans, which may include age.

 
Guaranteed Coverage and Guaranteed Renewability

Provided you satisfy the eligibility requirements described in the Eligibility Section, you cannot be denied coverage for any reason including your past or current health condition, claims history, occupation, age, gender or any other reason that may be related to your health or the health of any family member. What's more, your policy will be renewed provided you remain a resident of New Jersey, your premium is paid in a timely fashion and you do not commit fraud. Note: The Policy will not be renewed for anyone if the carrier files to withdraw the plan, or if the law precludes renewal of the plan.

 
Pre-existing Conditions

A "pre-existing condition" is an illness or injury that you had before you applied for coverage.  For plans issued before January 1, 2014, carriers were permitted to exclude the costs for treating pre-existing conditions for up to 12 months after the effective date of coverage (for people 20 years old and older).  There were rules that required carriers to shorten the pre-existing condition limitation period if someone had certain types of prior coverage.  However, for plans issued on or after January 1, 2014, no carrier may limit coverage for anyone because of any pre-existing condition.    

 
Rating

Carriers are required to community rate individual plans.  This means that the rates are the same for everyone who purchases the particular individual plan, and are not based upon the actual or expected claims history of any particular person.  In addition, carriers may not consider the health status of any specific person purchasing an individual plan; so, for instance, there is no special rate for smokers versus non-smokers.  Also, carriers do not rate based on gender or where someone lives in New Jersey.   

However, carriers use age as a rating factor for individual plans.  Starting in 2014, carriers are required to use a child rate for ages 0 through 20 years old, and then incrementally increases rates every year from age 21 through 64.  Each carrier must set its rates so that its highest rate is not more than 3 times its lowest adult rate for a specific individual plan.  (This is referred to as a 3:1 rate band.) 

Each person covered under a plan is rated individually, except that a family is not charged for more than three children under the age of 21, even if they cover more than three children under the age of 21.  So, if a family has two adults (one being 45 years old and the other being 42 years old) and four children under the age of 21, to determine the monthly cost of a plan to cover the entire family, the family would add the monthly premium for each adult and add the child premium for three children to get the total for the family’s monthly premium, as follows:


45 year old premium + 42 year old premium + child premium + child premium + child premium = family premium.


The New Jersey Individual Health Coverage Program publishes the monthly premium rates for selected ages for all of the individual plans offered in New Jersey in a rate comparison chart.  There is also a calculator available to help people find the premium for ages not included on the chart.  The rate chart and calculator only show the monthly rates. 

 
Frequently Asked Questions About IHC Plan Features And Rates
 
Question 1: If I purchase an individual plan with an effective date of March 1 and I get sick or am injured on March 3, would I be covered for treatment of the sickness or injury?
 

Yes. The individual plans provide coverage from day one for all conditions that are covered under the policy.

   
Question 2: My premium is due on May 1. How long do I have to pay that premium? If I do not pay the premium, when will my coverage end?
  There is a 31-day grace period, so you have until May 31 to pay the premium.  Coverage stays in force during the grace period.  If you do not pay the premium by the end of the grace period, coverage ends.  Carriers decide whether to terminate coverage as of the date through which premiums have been paid (April 30 for this example), or as of the end of the grace period (May 31 in this example). If a carrier terminates coverage as of the date the grace period ends, and you incur charges during the grace period and submit a claim to your carrier, your benefit will be reduced by the amount of unpaid premium.
   
Question 3: Why do rates for plans that cover the same services vary from carrier to carrier?
  The various plans have different cost-sharing requirements.  Each carrier evaluates the benefits required to be provided under each of the individual plans, along with the cost-sharing and other design features of the plan, and determines how much the carrier expects it will cost to provide those benefits to their customers. Carriers must also price plans to comply with a provision of the law which requires them to pay out at least 80 cents for medical care (that is, benefits, services or supplies) provided to their covered individuals for every dollar collected in premiums.  This 80% requirement is referred to as the medical loss ratio.
   
Question 4: If I do not submit any claims to my carrier, will my rates remain the same?
  No, not necessarily. The rates for any given individual plan are not adjusted only based on your or your family’s utilization of health benefits or lack of utilization.  Rather, each carrier reviews its utilization by all persons covered by the same type of individual plan. Any adjustment will apply to everyone covered under the same type of plan, not just persons who may have submitted claims.
   
Question 5: Are rates locked-in for any length of time?
 

Starting in 2014, all individual plan premium rates are based on a calendar year, and will not change until January 1 of the following calendar year.  If you buy a plan on February 1, the rate will be “locked-in” until the following January 1.

   
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