Limitations on preexisting conditions included in health insurance policies


Preexisting Condition Provisions

Many health policies contain limitations on preexisting conditions. Preexisting conditions coverage limitations in group policies and managed care plans are regulated by federal law. Under these laws, a preexisting condition exclusion is valid only if it relates to conditions for which the insured received care or care was recommended within six months before the enrollment dates. A preexisting conditions exclusion is valid for no more than twelve months, reduced by whatever period the enrollee was covered for that condition under a previous policy or managed care plan. The effect of this latter provision is often to completely negate the preexisting condition exclusion.

For example, an insured covered under an employer-sponsored health plan (Plan A) who changes jobs and becomes covered under the new employer's health plan (Plan B), with no gap in coverage between Plan A and Plan B, is not considered to have any preexisting conditions that would be excluded from Plan B's coverage.

Workers Compensation Exclusion

Most health insurance policies and managed care plans exclude coverage for any illness or injury covered by workers compensation or occupational disability laws. Such exclusions are uniformly enforced, even if the insured did not seek or receive workers compensation benefits. The intent is to avoid multiple recoveries.

Experimental or Investigative Treatment Exclusion

Many health insurance policies and managed care plans exclude coverage for treatments that are not recognized as accepted medical practice or that have not received governmental approval. Often, policies and managed care plans put the determination whether a given treatment is considered experimental or investigative in the sole discretion of the plan's medical director. This is an exclusion that in many ways is a variant of the medical necessity requirement discussed previously.

Coordination of Benefits

Health insurance policies and managed care plans virtually always contain provisions addressing the insurer's payment obligations when an insured has coverage under more than one plan. Think of these coordination of benefits provisions as comparable to other insurance clauses in homeowners or auto policies.

Arbitration

Health insurance policies sometimes contain mandatory arbitration provisions applicable to disputes over the recoverability of benefits. Federal law, the Federal Arbitration Act and many states' laws establish a public policy in favor of arbitration of disputes and generally serve as a basis for enforcement of contractual arbitration provisions. Arbitration provisions have been held generally not to constitute an impermissible infringement of an insured's right to a jury trial.

Arbitration awards can only be reversible on judicial review if the arbitrator exceeds his or her authority under the arbitration clause - in other words, if he or she decides an issue not within those expressly stated in the clause to be subject to its provisions. Notwithstanding the foregoing, arbitration clauses must be prominently disclosed in the policy or plan documents and must be stated in clear and understandable language.

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