Quick Answer
Claim provisions explain how to report a loss, provide evidence, and receive an approved benefit. They also address examinations, who receives payment, and when a claimant may sue. Exact wording and time limits vary by policy and law. Identify each provision's purpose and the event that starts its deadline.
What Does Each Claim Provision Do?
| Provision | Function |
|---|---|
| Notice of claim | Alerts the insurer to a possible covered loss. |
| Claim forms | Provide a format for claim information. |
| Proof of loss | Supports the benefit request with evidence of the expense or disability. |
| Time of payment | States when a covered benefit is due after required proof is received. |
| Payment of claims | Identifies who receives an approved benefit, such as the insured, a provider, or a named beneficiary for a death benefit. |
| Examination and autopsy | Define additional claim-investigation rights. An autopsy is an examination of a body after death. |
| Legal actions | Set the earliest and latest times to sue after required proof, subject to governing law. |
- To calculate a deadline, identify the event that starts the period and the stated counting rule. Notice, forms, complete proof, and approval may occur on different dates. A later approval does not restart a period that the contract starts on receipt of complete proof.
- A beneficiary designation does not bypass the policy's coverage and proof conditions.
Exam Tip: Gotchas
- Health claim deadlines depend on the contract and governing law. Never transfer a deadline from one policy form to another.
Applying the claim provisions
- Notice can go to the insurer or an agent authorized to receive it. A producer license alone does not establish that authority.
- Report the possible loss through the required channel without waiting for every final bill. An estimate in the notice does not establish the payable benefit.
- If the contract permits written proof when the insurer delays its forms, submit that proof within the applicable period. The insurer still reviews coverage and the amount claimed.
- Match records to the missing fact. A medical statement can document work restrictions; an attendance log documents absence. A bill shows a charge; a receipt can show actual payment when that proof is requested.
- When the issued policy grants the right, the insurer can choose the examiner and pays for examinations it reasonably requires while a claim is pending. A repeat examination may be allowed when reasonably needed.
- An autopsy right applies only where law permits. It can support claim investigation before benefit approval, and the insurer bears its expense under the standard provision.
- A valid assignment, a transfer of stated policy rights, can redirect an approved benefit to a provider. It does not decide the benefit amount or replace the payment-timing provision.
- An assignment may cover only part of a benefit. Pay the assigned portion as directed and the remaining benefit according to the policy.
Example: The policy pays an approved $1,000 benefit to the insured except for a valid $700 assignment to a provider:
- Pay the assigned $700 to the provider.
- Subtract that portion: $1,000 − $700 = $300.
- Pay the remaining $300 to the insured, the policy's remaining payee.
Where Should You Find a Claim Deadline?
A member asks when to file a claim. The producer, the insurance professional helping arrange coverage, locates the issued contract and directs the member to the insurer's claims unit instead of guessing a deadline.
Why Does Preauthorization Not Guarantee Payment?
- Preauthorization, also called prior authorization, is an advance medical-necessity decision for a specified service or item. A plan may require it before nonemergency care.
- Preauthorization, a provider estimate, or a completed claim form does not alone prove that a service is covered.
- The allowed amount, also called the eligible expense, is the plan-recognized maximum for a covered service. It can be lower than the provider's billed charge.
- The insurer applies the policy to the service, allowed amount, eligibility, documentation, exclusions, benefit limits, and cost sharing.
- Apply the deductible, copayment, or coinsurance to the base stated by the plan. Do not assume the entire provider bill is payable.
Exam Tip: Gotchas
- Prior authorization and a claim form do not prove the service is covered.
From claim notice to payment
- The usual claim sequence is notice of claim, insurer-provided forms, proof of loss, review, and payment or explanation of the decision.
- Notice alerts the insurer; forms gather information; proof substantiates the expense or disability.
- For an ongoing disability claim, follow the policy's requirements for updated proof. Earlier approval does not replace proof reasonably required to review later benefit periods.
- A provision for time of payment explains when an approved benefit is due after proof is received.
- The policy also may allow examination or, after death, an autopsy where legally permitted.
- A legal-actions clause sets the earliest and latest times a claimant may sue after required proof, subject to governing law. Its waiting period and final filing limit serve different purposes.
- The exact deadlines for notice, proof, and legal action can differ by policy and jurisdiction.
- Keep copies of submitted records and use the insurer’s claims channel; a producer should not replace the claims administrator or guess at a deadline.
What Should You Check on Exam Day?
- What is the difference between notice of claim and proof of loss?
- When does a payment-timing clause operate?
- Why should a producer avoid guessing at claim deadlines?