State RegulationsNJ specificDifficulty 2/5
A New Jersey employer funds its employees' health benefits directly from corporate assets and hires an administrator to process claims; no insurance policy is issued. A claim remains unpaid well beyond the prompt-pay deadline. Under the Health Care Claims Authorization Processing and Payment Act, what is the outcome?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
The Health Care Claims Authorization Processing and Payment Act, codified at N.J.S.A. 17B:30-51 et seq., applies to insured group and individual health business written in New Jersey. A self-funded arrangement in which the employer pays benefits from its own assets, with no insurance policy issued, falls outside the act's scope; the prompt-pay deadlines and interest consequences attach to insured business regulated by the New Jersey Department of Banking and Insurance.
Why the other options are wrong
- A) The act does not reach every health benefit arrangement; its scope is insured group and individual health business.
- B) Physically processing claims does not subject an administrator to the act's penalties when no insured policy exists.
- D) The act contains no forced-conversion remedy; the threshold question is whether the act applies at all, and for self-funded arrangements it does not.
Memory hook
No policy, no HCAPPA: the act follows insured coverage, not self-funded checks.