State RegulationsNC specificDifficulty 2/5
An insured in Charlotte holds an individual major medical policy that qualifies as a health benefit plan, issued by a member insurer that has been declared insolvent. What is the maximum amount the North Carolina Life and Health Insurance Guaranty Association will pay for this insured's health benefits?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-62-21(d)(2a), the guaranty limit for health insurance is tiered by how the coverage is defined: coverage that qualifies as a HEALTH BENEFIT PLAN is protected up to $500,000 for any one life, while coverages not defined as health benefit plans are protected up to $300,000. Because the policy in the stem is a major medical health benefit plan, the $500,000 tier applies.
Why the other options are wrong
- A) $300,000 is the limit for coverages NOT defined as health benefit plans under G.S. 58-62-21(d)(2a); a major medical policy falls in the $500,000 tier.
- C) $5,000,000 is the limit for unallocated annuity contract holders other than governmental plans under G.S. 58-62-21(d)(4), not a health insurance limit.
- D) $1,000,000 is the structured settlement limit per payee under G.S. 58-62-21(d)(5), not a health insurance limit.
Memory hook
Health plan = half a million; other health = $300k.