The Individual Health Coverage Program requires each carrier to:

• guarantee coverage and renewability for all eligible people regardless of health, subject to the pre-existing conditions provision, as applicable;
  
  
• establish modified community rates -- which are rates that apply to all people who purchase the same standard IHC plan and do not vary based on an individual person’s gender, occupation, geographic location or health status, but may vary based on age.  Carriers may use modified community rates for the Basic and Essential Plan (B&E Plan) where rates may vary based on age, gender and geographic location.  Health status is not a permissible rating factor for any plan.  Please note that while carriers may vary standard plan rates based on age, not all carriers were doing so as of the date such rating was first permitted.  Refer to the rate comparison pages for information as to which carriers are using age as a factor for rating standard plans.
  
  
• offer at least three of the standardized individual plans (referred to as Plans A/50,B,C D and/or an HMO Plan) to make it easier for you to compare benefits and costs among the many participating carriers offering coverage.  Plans A/50, B, C and D can be offered as indemnity or traditional plans, or as PPO or as POS plans.  Carriers may file riders to increase the benefits under one or more of the standard plans. 
  
  
• offer a Basic and Essential Plan (B&E Plan).  The B&E plan is not a standard plan and provides only limited coverage.  Carriers may file riders to enhance the limited coverage.  As mentioned above, carriers may vary the rates for the B&E plan based on age, gender and geographic location.  The rate comparison pages identify which factors each carrier uses for B&E rates.

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. However, the "pre-existing conditions" provision may limit coverage during the first 12 months. You are guaranteed that your policy will be renewed provided you remain a resident of New Jersey and your premium is paid in a timely fashion and you do not commit fraud.

Pre-existing Conditions and Portability

Except as stated below for federally defined eligible individuals, if you have been uninsured for more than 31 days prior to the enrollment date (which means the effective date of coverage under the individual plan), you are subject to a 12-month waiting period for coverage of "pre-existing conditions."

A "pre-existing condition" is an illness or injury which manifests itself in the six months before the enrollment date and for which:

1. a person sees a doctor, takes prescribed drugs, receives other medical care or treatment or had medical treatment recommended by a doctor, or
   
   
2. an ordinarily prudent, or careful, person would have sought medical advice, care or treatment.

A pregnancy which exists on the date coverage begins is a pre-existing condition and will be subject to the limitations described above. However, certain complications of pregnancy will not be excluded for coverage as pre-existing conditions.

During the 12-month "pre-existing condition" waiting period, you will be covered for all conditions other than the pre-existing condition, subject to the terms of your contract or policy. After the "pre-existing condition" waiting period has ended, all illnesses and injuries -- including those related to the "pre-existing condition" -- will be covered subject to the terms of your contract or policy.

"Creditable coverage" is the term used under the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA") to define the types of prior coverage a person may have had. It is a very broad definition and includes, but is not limited to: individual and group plans, whether insured or self-funded, Medicare, Medicaid, and CHAMPUS. The individual plans contain a complete definition of "creditable coverage."

The "pre-existing condition" waiting period is waived for treatment of conditions which were treated or diagnosed and were covered under "creditable coverage" that terminated no more than 31 days prior to the effective date of your new individual plan.

The "pre-existing condition" limitation period is credited for time satisfied under for any “creditable coverage” provided there is no more than a 31-day lapse between your prior and your new coverage.

You will be required to provide your new carrier with proof of the prior "creditable coverage," so that the waiver or credit may be applied. Your prior plan should provide you with a certificate of creditable coverage to be used for such proof. If you do not have more than a 31-day lapse in coverage, you may change health plans without having to satisfy any new "pre-existing condition" waiting period. If you have only partially satisfied the "pre-existing condition" waiting period under prior coverage, you will have to satisfy only the balance of a "pre-existing condition" waiting period under your new coverage.

Exception: If an eligible person is a "federally defined eligible individual" the "pre-existing condition" waiting period requirement will only apply if there has been more than a 63-day lapse in coverage between the date the prior "creditable coverage" ends and the enrollment date. (For a federally defined eligible individual, the enrollment date is the date the person submits a substantially complete application for coverage.)

Rating

Modified Community Rating for Standard Plans: 
Carriers have the option to use modified community rating for the standard plans.  The rates may vary based solely on age.  Rates vary from carrier to carrier and from one individual plan to another. That is, one carrier’s price for Plan D is not likely to be the same as another carrier’s price for Plan D. And, because Plan D has a higher carrier coinsurance than Plan B, Plan D will generally be priced higher than Plan B. The list of carriers and their rates for various plans can assist those interested in purchasing individual health coverage with a comparison of rates.

Modified Community Rating for B&E Plans: 
Carriers have the option to use modified community rating for the B&E plan.  For the B&E plan, the rates may vary based on age, gender and/or geographic location.  Carriers may use one or more of those permissible rating factors.  As with the standard individual plans, the rates for one carrier offering B&E may be very different from the rates for another carrier.  In addition, while the B&E coverage basically covers the same services and supplies, the addition of a carrier-designed rider to enhance the benefits under the B&E plan can result in some significant differences between the B&E plan with rider offered by one carrier as compared to that of another.  Those benefit differences result in further rate differences among carriers. 

Caps on Rate Increases: 
As of January 5, 2009, and for the next four years, the law imposes a renewal rate cap.  The renewal increase for consumers who bought a plan prior to January 5, 2009 is limited to a 15% increase.  The renewal increase for consumers age 55 or older who buy a plan on January 5, 2009 or later is limited to a 15% increase.  As mentioned, the cap applies only for 4 years and thus will expire in 2013.

Question 1: If I have a pre-existing condition and apply for coverage on February 12th requesting that the individual plan be effective March 1, and I enter the hospital on March 2 because of that condition, would I be covered for the hospitalization?

It depends on whether you were covered under prior coverage. If you are not a “federally defined eligible individual,” as defined earlier in this Guide, but you were covered for the condition under prior coverage and that coverage ended no more than 31 days before your enrollment date (which is the effective date of the individual plan, March 1 in this example), your new coverage will cover the condition, subject to the terms of the new plan.

If you are a "federally defined eligible individual," and your prior group coverage ended no more than 63 days before your enrollment date (which is the date you submitted a substantially complete application for the individual plan, February 12th in this example,) your new coverage will cover the condition, subject to the terms of the new plan.

If you had no prior coverage, or if any prior individual coverage ended more than 31 days prior to the enrollment date (March 1, in this example) or your group coverage ended more than 63 days before the enrollment date (February 12th in this example) if you are a federally defined eligible individual, the new coverage will not cover a pre-existing condition until the end of the required 12-month "pre-existing condition" waiting period.

Question 2: If I purchase an individual plan with an effective date of March 1 and I am injured on March 3, would I be covered for treatment of the injury?

Yes. Conditions which first manifest themselves after your new coverage begins (i.e., March 1, in this example) are covered, subject to the terms of the new plan.

Question 3: Do I have to satisfy another waiting period for a "pre-existing condition" if I change from one individual plan to another or from one carrier to another?

If there is no more than a 31-day lapse in coverage between the date your prior plan ends and the date your new plan begins, there will be no new "pre-existing condition" waiting period, provided your previous plan also covered you for the condition or you had coverage under the previous plan for at least 12 months, and, therefore, satisfied the 12-month "pre-existing condition" waiting period.  However, if you did not entirely satisfy the 12-month "pre-existing condition" waiting period under the prior plan, you will be required to satisfy the balance of the waiting period under the new plan.  You will have to provide proof of prior coverage to the new plan. 

For example, if you bought a plan from one carrier on March 1 and were required to satisfy a 12-month "pre-existing condition" waiting period, and canceled that coverage on October 1 to buy coverage with another carrier, you would have already satisfied 7 months of the 12-month waiting period. The new carrier would then apply those 7 months to the "pre-existing condition" waiting period, so you would have to satisfy just the remainder of 5 months of the waiting period while covered with the new carrier.

Question 4: I have Plan C and 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 as of the end of the grace period. If 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. For the purpose of the portability provision of the plans, however, the permissible 31-day lapse period is measured from the last date coverage is in force on a premium-paying basis, not the end of the grace period.  In this example, premiums are paid through April 30, so May 1 would be the beginning of the lapse period.

Question 5: Why do rates for identical standard plans vary from carrier to carrier?

Each carrier evaluates the benefits required to be provided under each of the standard individual plans 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 in benefits, services or supplies to their covered individuals for every dollar collected in premiums.

Question 6: 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 specific plan, not just persons who may have submitted claims.

Question 7: Are rates locked-in for any length of time?

Carriers are not required to "lock-in" or guarantee their rates for any specific amount of time, however, many carriers elect to do so. The rate comparison sheets show the duration of the rate guarantees for each carrier. For more specific information on rates -- or any available rate guarantee -- contact the carriers directly.

Question 8:  I am thinking about buying a plan now.  I am 56 years old.  What does the 15% cap mean for me?

As a new purchaser, the rate you’ll be charged for your new plan will be the rate applicable to a 56-year-old purchaser.  The 15% rate cap will first affect you next year when your new plan renews.  The renewal rate increase will be limited to 15% as compared to the rate you’ll pay as a new purchaser this year.