The New Jersey Department of Banking and Insurance is posting this information concerning limits on benefits because some consumers may not realize that certain comprehensive health benefits plans may include limits on one or more benefits or may be unclear as to how the limits operate.

The limits contained in a comprehensive health benefits plan may take the form of a dollar limit, a day limit or a visit limit, and these limits generally apply on a per person per calendar year basis.  The Q&A that follows is designed to address the most common questions we have received regarding comprehensive health benefits plans that feature limits on one or more benefits. 

As a person covered under the plan you should have received a certificate or evidence of coverage.  Find the schedule pages.  They are most often included near the front.  Benefit limits are generally listed on the schedule.  For example, New Jersey Law requires coverage for hearing aids for children age 15 or younger but limits the benefit to $1,000 per hearing impaired ear per 24-month period.  You’ll find text similar to the following on the schedule pages of your plan.

Charges for hearing aids for a Covered Person age 15 or younger

$1,000 per hearing impaired ear per 24-month period

No plan may impose a benefit limit that violates New Jersey law.

If New Jersey law requires coverage at a certain level, a plan would not be permitted to apply a benefit limit less than the level required by law.  For example, New Jersey law requires coverage for home health care of not less than 60 home health care visits per calendar year.  No plan may impose a benefit limit for home health care of less than 60 visits per calendar year. 

If New Jersey law does not require coverage for a certain service or supply, then a plan may limit benefits for the service or supply.  Some examples of benefit limits include the following:

• physical therapy limited to 30 visits per year;
• durable medical equipment limited to $1,500 per year,
• therapeutic manipulation limited to 30 visits per year
• outpatient treatment of non-biologically based mental illness limited to 20 visits per year
• preventive care limited to $750 per year for persons under age 1 and $500 for all other persons
• non- network ambulatory surgical centers limited to $2,000 per year

No, the plan limit would govern.  By imposing a benefit limit the plan is not commenting on whether additional services or supplies are or are not needed.  The plan is imposing the benefit limit for everyone covered under the plan, regardless of the medical necessity of the additional services or supplies.  If a person needs services and supplies beyond that which is covered, the consumer can pay out-of-pocket for the additional services or supplies.  Or, if the benefit limit applies only to non-network services, the consumer may elect to secure the services from a network provider. 

For example, in case of a plan that limits physical therapy to 30 visits per year, a consumer’s physician may prescribe visits beyond the 30 visits that the plan covers.  The consumer may choose to go for the additional visits of physical therapy.  If the person submits the charges for the additional therapies to the plan the claim will be denied because the 30 visit benefit limit has already been reached.  The person will be responsible for the charges for the therapy services beyond the 30 visits that the plan covered.

Another example considers the effects of a benefit limit that applies only to non-network services.  Some plans impose a $2,000 annual limit on benefits paid for use of a non-network ambulatory service center (ASC).  The benefit limit does not apply if a person uses a network ASC.  If no other non-network ASC charges have been submitted for that person during the calendar year the person such that the full $2,000 benefit is available, the person may choose to use the non-network ASC and get the $2,000 benefit recognizing of course, that if the billed charges for the non-network ASC exceed the $2,000 benefit paid, the person will be responsible to pay the difference.   If the person has already exhausted the $2,000 annual benefit for a non-network ASC and needs additional surgery, the person may use the non-network ASC.  However, the plan will pay no benefits for the charges of the non-network ASC since the $2,000 maximum annual benefit has already been exhausted and the person would be entirely responsible to pay for the charges of the non-network ASC.  Since the benefit limit applies only to non-network ASC charges the person may prefer to avoid the financial exposure associated with use of the non-network ASC and elect to use a network ASC or a network hospital for the surgery.  Benefits for use of a network ASC or a network hospital are not subject to the $2,000 maximum annual benefit limit. 

Only the days or visits actually paid as benefits under the plan count toward the limits.  Many plans include deductible provisions which mean the covered person must pay for covered services out of pocket until the deductible has been met  If a person pays for services while meeting the deductible those services do not count against the limited number of days or visits under the plan.  For example, if a person goes for 6 physical therapy visits in January and the cost for those visits is applied toward a $1,000 deductible, those 6 visits do not reduce the 30 physical therapy visits covered under the plan.  Once the $1,000 deductible is satisfied the person would be eligible for 30 visits for which the plan would pay benefits.

The dollar limit is the actual maximum dollar benefit amount a covered person can expect to be paid for the specific service or supply to which the limit applies.  The dollar limit is actually the final step in a benefit calculation. 

The benefit limit applies ONLY to the specific service or supply specified in the plan. 

For example, if a plan limits durable medical equipment to $1,500 that $1500 limit applies only to the equipment and not to any professional services such as those of the physician prescribing the equipment. 

Another example is for a limited benefit for non-network ambulatory surgical centers (ASC).  The limit applies only to the charges of the ASC.  Charges of the surgeon or the anesthesiologist are separate from the charges of the ASC and would not be subject to the benefit limit.  The charges of the surgeon and anesthesiologist would be paid according to  whether they are network or non-network providers and the terms and conditions of the plan.