State RegulationsNC specificDifficulty 2/5
A Raleigh resident holds a major medical policy that is defined as a health benefit plan, and the issuing member insurer becomes insolvent. Under G.S. 58-62-21(d)(2a), the guaranty association's maximum for the health benefits is:
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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 benefits for any one life are protected up to $500,000 when the coverage is defined as a health benefit plan; coverages not defined as health benefit plans carry the $300,000 limit. Because the Raleigh resident's major medical policy is a health benefit plan, the higher $500,000 cap applies.
Why the other options are wrong
- A) $300,000 applies to coverages not defined as health benefit plans, not to health benefit plans themselves.
- B) North Carolina has no $100,000 health tier; that figure echoes a model-law cash-value concept that NC does not use.
- D) $5,000,000 is the unallocated-annuity limit for non-governmental contract holders under G.S. 58-62-21(d)(4).
Memory hook
Health benefit plan? Think half a million.