Understanding Alabama health insurance

Like all states, Alabama health insurance companies must adhere to certain rules and regulations created by the governing state’s legislature. These laws limit the power of the Alabama health insurance companies, but they also protect them from policyholders’ false claims and overuse of the system. State regulation of Alabama health insurance agencies protects both sides of the insurance world.

For instance, one Alabama health insurance law that protects the policyholder is the guaranteed renew ability clause. This regulation states that any Alabama health insurance policyholder is guaranteed the right to renew his or her policy at the end of its term as long as premiums have been paid according to the initial contract. Alabama health insurance companies cannot cancel a policy at the end of a term because of a policyholders’ declining health or large number of claims.

When it comes to the actual cost of a policyholder’s monthly premium, Alabama health insurance companies are virtually unregulated. There are no limits to the amount Alabama health insurance companies can charge for coverage. Also, Alabama health insurance companies are under no obligation to provide coverage to people who apply. This means that Alabama health insurance companies can deny applicants coverage based on health factors that make them high risks to the insurance company. This also means that any Alabama health insurance company that provides a policy to a high risk individual can charge an extremely high and often unreasonable monthly premium. Unfortunately, paying these premiums may be the only option for some people when it comes to finding Alabama health insurance coverage. Once an individual purchases a policy from an Alabama health insurance company, however, it is illegal for the company to cancel the policy based on the client’s health. This is an excellent safeguard for Alabama health insurance policyholders.

Alabama health insurance companies must also abide laws concerning pre-existing conditions. Alabama health insurance companies can choose whether or not to cover certain pre-existing conditions; the companies themselves can define which pre-existing conditions they will and will not cover. However, Alabama health insurance law states that an insurance company cannot extend its exclusion period beyond two years. This means that the Alabama health insurance can refuse to pay for treatment of pre-existing conditions for two years, but that they must cover claims made after two years of coverage.

For those who own small businesses, Alabama health insurance companies are required to provide group policies to people with more than two employees. Alabama health insurance small business policies are fairly standardized, meaning that the same coverage is available to all small businesses that qualify. However, there is no regulation regarding the price of these policies. Alabama health insurance companies can set monthly premiums based on the health of the entire group. This means that small businesses with older employees or with employees who have pre-existing health problems will be charged much higher premiums by Alabama health insurance companies than would businesses with younger employees.

Alabama health insurance companies can also set a minimum percentage of employee participation in order for a small business to keep a group policy. This number is set by each individual Alabama health insurance company and is agreed upon with the client before any contracts are signed.

Addtional Alabama Health Resources
201 Monroe Street, Suite 1700
Montgomery, AL 36104
334-269-3550
www.aldoi.com

Understanding Alabama health insurance

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