State RegulationsNC specificDifficulty 1/5
An insured holds hospital and medical coverage that qualifies as a health benefit plan under North Carolina guaranty association law, and the issuing member insurer becomes impaired. What is the Association's maximum coverage for this one life?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under G.S. 58-62-21(d)(2a), health insurance benefits are protected up to $500,000 for coverages defined as health benefit plans, while coverages not defined as health benefit plans are capped at $300,000. Because the question's coverage is a health benefit plan, the higher $500,000 cap applies.
Why the other options are wrong
- A) The $300,000 figure applies to coverages NOT defined as health benefit plans; a qualifying health benefit plan earns the higher cap.
- B) One million dollars is the structured settlement limit under G.S. 58-62-21(d)(5), unrelated to health benefit plans.
- D) Five million dollars is the unallocated annuity limit for non-governmental contract holders under G.S. 58-62-21(d)(4), not a health limit.
Memory hook
Health plans hit half a million; other health coverage stops at three hundred.