Individual Health Insurance Sold by Private Insurers

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When do individual health insurers have to sell me a policy?

  • In New Jersey, your ability to buy an individual health insurance policy does not depend on your health status. In general, individual health insurance companies in New Jersey are not allowed to turn down residents of New Jersey because of health status, age, gender, or other factors.
  • You must meet certain residency standards. You must be a resident of New Jersey for 6 months or newly arrived with the intent to stay six month to buy individual health insurance on a guaranteed basis.
  • In general, you are only eligible to buy an individual health insurance policy year round provided you are not eligible for, or covered by, other coverage. However, there are some exceptions:

If you are eligible for, or covered by, Medicaid, you are eligible to buy individual health insurance at any time of the year.

If you are eligible for, or covered by, job-based coverage that is different than individual health insurance policies offered in New Jersey, you are eligible to buy individual health insurance during open enrollment in November of each year.  Contact the NJ DOBI for questions about how to compare your current job-based coverage with individual health insurance policies.

If you currently have an individual health insurance policy, you are eligible to buy a different individual health insurance policy. Depending on the type of policy you have and the policy you want to buy, you may have to wait until open enrollment in November of each year. Contact the NJ DOBI for questions about how to compare your current coverage with other policies.

If you have, or are eligible for COBRA coverage, state continuation coverage or extended dependent coverage under your parent’s fully insured plan because you are under the age of 30, then you are eligible to buy an individual health insurance policy at any time of the year.

If you are eligible or have other coverage, call the New Jersey Individual Health Benefits Program with questions about your ability to buy individual coverage in such situations.

  • If you are HIPAA eligible, you are guaranteed the right to buy individual health insurance from any individual market insurer. You can purchase an individual policy at any time of the year. You do not have to be a resident of New Jersey for any specific length of time.

To be HIPAA eligible, you must meet certain criteria

If you are HIPAA eligible you are guaranteed the right to buy an individual health insurance policy and are exempted from pre-existing condition exclusion periods.  To be HIPAA eligible, you must meet all of the following:

  • You must have had 18 months of continuous creditable coverage, at least the last day of which was under a group health plan.
  • You also must have used up any COBRA or state continuation coverage for which you were eligible.
  • You must not be eligible for Medicare, Medicaid or a group health plan.
  • You must not have health insurance.
  • You must apply for health insurance for which you are HIPAA eligible within 63 days of losing your prior coverage.

HIPAA eligibility ends when you enroll in an individual plan, because the last day of your continuous health coverage must have been in a group plan.  You can become HIPAA eligible again by maintaining continuous coverage and rejoining a group plan.

  • In New Jersey, if you are under the age of 30 and a dependent of a person covered under a fully insured group plan that offers coverage to dependents, then, instead of buying individual health insurance, you may be able to get coverage through your parent’s plan (see page 10).
  • Under New Jersey law, newborns, adopted children and children placed for adoption are automatically covered under the parent’s individual health insurance policy for the first 31 days, if the plan covers dependents. For single or husband and wife plans, the insurer will require that the parent enroll the dependent within 31 days in order to continue coverage beyond the 31 days.
  • If you have a disabled child, that child may remain covered under your individual health insurance policy after he or she reaches the age which dependent coverage is otherwise terminated. To qualify, your adult son or daughter must be incapable of self-sustaining employment by reason of the disability and remain dependent on you for support. Proof of incapacity must be furnished to the plan within 31 days of the child reaching the limiting age and may be required subsequently in the future.
  • In New Jersey, special protections apply if you have an adult child who is a full time student and who is covered under your individual health insurance policy. Children who are full time students may remain covered under your policy until their 23rd birthday.
  • Your coverage cannot be canceled because you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in the case of managed care plans, continue to live in the plan service area.

In addition, if you have an individual health insurance policy and later become eligible for Medicare or coverage under a group plan, you can keep your individual policy along with either Medicare or your coverage under the group policy.

What will my individual health insurance policy cover?

  • New Jersey requires individual insurers to offer comprehensive standardized policies. Depending on the insurer that you call, you may select from either four standard indemnity policies, an HMO policy or a preferred provider organization (PPO) policy. Each standardized policy includes comprehensive coverage, including hospital and physician care, maternity care, preventive checkups and immunizations, and prescription drugs
  • New Jersey requires that all individual insurers offer the Basic and Essential Plan, a standardized policy that is not comprehensive. The Basic and Essential Plan does not cover benefits that consumers may have come to expect in individual health insurance policies, such as chemotherapy, outpatient prescriptions drugs and maternity care. It is important that you read the policy description carefully before deciding to purchase the Basic and Essential Plan.
  • You can compare you benefit options. The New Jersey Insurance Department issues a free guide called the New Jersey Individual Coverage Program: Buyer’s Guide, which lists plan options. The Department’s web site, http://www.nj.gov/dobi
    /reform.htm
    , lists companies selling individual policies along with premium rates.

What about coverage for my pre-existing condition?

  • If you are HIPAA eligible, you will not face a pre-existing exclusion period when you enroll in an individual health insurance plan.
  • If you are not HIPAA eligible, you may have a 12 month pre-existing condition exclusion period when you first buy an individual market policy. Individual insurers can count as pre-existing any condition for which you received - or, in your insurance company’s judgment, for which most people would have sought - medical advice, care or treatment in the 6 months before individual coverage begins. This is called the prudent person rule.

You will get credit toward your pre-existing condition exclusion period for any prior creditable coverage you have, provided no more than 31 days lapse between your old and new coverage.

In New Jersey, individual health insurers consider pregnancy to be a pre-existing condition, but complications of pregnancy must be covered. Genetic information cannot be considered a pre-existing condition.

  • Insurers can exclude coverage for a pre-existing condition when you first buy the policy, or any time during the first 12 months after your policy takes effect. If you make a claim during the first year of coverage, the insurer can look back 12 months from the time of your application to see if the claim is for a condition that would have been considered a pre-existing condition. If the insurer determines, using the prudent person standard, that the condition is pre-existing, it can refuse to pay for expenses for that condition for up to 12 months.
  • In New Jersey, individual health insurance policies are not allowed to impose elimination riders (or waivers), which permanently exclude coverage for a health condition, body part, or body system.

What can I be charged for an individual health insurance policy?

  • It depends on what you buy. Except for the Basic and Essential Plan, individual insurers cannot vary premiums for individual health insurance policies due to your age, gender, health status, occupation, or geographic location. This is called community rating.

Premiums for the Basic and Essential Plan can vary, within limits, based on your age, gender and where you live. However, they cannot vary based on your health status. This is called modified community rating.

  • Premiums vary depending on your family size and the type of plan you select. Check http://www.nj.gov/dobi/reform.htm for the most current premium rates or call (800) 838-0935 for a copy of premium comparison information.

Can my individual health insurance policy be canceled?

  • If you have an individual health insurance policy, your coverage cannot be canceled because you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in the case of managed care plans, continue to live in the plan service area. However, individual health insurance policies may not be renewed if the policy is completely removed by the State of New Jersey or if the individual health insurer that is selling the policy completely withdraws from the individual market.
  • Although not permitted for sale in New Jersey, temporary health insurance policies are routinely sold in other states. Temporary policies are not guaranteed renewable. They will only cover you for a limited period of time, such as six months. If you want to renew coverage under a temporary policy after it expires, you will have to reapply and there is no guarantee that coverage will be re-issued at all or at the same price.


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