State RegulationsNC specificDifficulty 3/5
A chronically ill employee was treated under her employer's group health plan, then converted to an individual policy when the group coverage terminated. Under G.S. 58-53-85, the converted policy:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-53-85, a converted policy may not exclude as preexisting any condition the group policy covered. The statute permits coordination or offset of group benefits payable after termination during the first policy year, but it does not allow the converted policy to re-exclude a condition the group plan already covered.
Why the other options are wrong
- A) A new preexisting-condition exclusion for a covered condition would defeat the conversion protection that G.S. 58-53-85 provides.
- C) The statute contains no mechanism for buying out of the protection with an added premium.
- D) The converted policy cannot flatly deny covered-condition claims; only first-year benefit coordination is allowed.
Memory hook
What the group covered, the convert cannot exclude.