COVID-19 (Coronavirus) and Insurance

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Like other sectors of our economy, the insurance sector has been impacted by the COVID-19, commonly known as Coronavirus, pandemic of 2020. The North Dakota Insurance Department, along with regulators across the country, are engaged in heightened monitoring of the insurance industry to assess the impacts of COVID-19 on various types of insurance, individual companies, and our consumers. The insurance industry remains strong and has a unique role to play in providing protection to consumers and businesses impacted by the pandemic. Several types of insurance have provisions and exclusions that may be triggered as a result of COVID-19. Below are answers to common questions about COVID-19 and the potential impacts.

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General Questions

What is COVID-19?
Coronavirus disease 2019 (COVID-19) is a respiratory illness that can spread from person to person. There are many types of human coronaviruses, including some that commonly cause mild upper-respiratory tract illnesses. COVID-19 is a new disease, caused by a novel (or new) coronavirus that has not previously been seen in humans. Current symptoms reported for individuals with COVID-19 have included mild to severe respiratory illness with fever, cough and difficulty breathing.

What can I do to protect myself and my family?
The Department recommends that individuals follow guidelines established by the Centers for Disease Control and Prevention (CDC). Information on how to prepare can found at www.cdc.gov/coronavirus/2019-ncov/prepare/index.html. Additional information specific to North Dakota can be found on the North Dakota Department of Health’s website.

What should I do if I want to be tested?
If you develop symptoms such as fever, cough, and/or difficulty breathing, the Department recommends that you stay home and call your health care provider. Older individuals, those who have severe underlying medical conditions or are immunocompromised should contact their health care provider right away, even if their illness is mild. If you have severe symptoms, such as persistent pain or pressure in the chest, confusion or bluish lips contact your health care provider or emergency room and seek care immediately. Your doctor will determine if you should be tested for COVID-19.

Health Insurance

There are various types of health insurance policies. The type of policy you have will determine what testing and treatment associated with COVID-19 will be covered and if there will be any out-of-pocket costs.

  • Individual health insurance is coverage you purchase on your own, on an individual or family basis, as opposed to obtaining it through an employer. 
  • Small-group health insurance is provided by an employer and geared towards businesses with 50 or fewer full-time equivalent employees.
  • Large-group health insurance is offered by businesses that have more than 50 full-time equivalent employees. 
  • Medicaid and Medicare are government options for health insurance. Medicaid is governed by the North Dakota Department of Human Services while Medicare is a federally regulated program.
  • Short-term limited duration and/or health care sharing ministries generally have significant limitations on coverage and may not provide the same level of coverage as a major medical policy such as those listed above. Health sharing ministry plans are generally unregulated health plans.

Will I have to pay out-of-pocket for a COVID-19 test?
If you have a health benefit plan regulated by the State of North Dakota, you should not have to pay for the test. A health benefit plan is generally defined as an individual (including family), small group, large group, or short-term limited duration plan. The Department recommends that you contact your health benefit plan at the number listed on your identification card to see if your specific plan is regulated by North Dakota and is not self-funded.  

Pursuant to Bulletin 2020-1 issued by Insurance Commissioner Jon Godfread, health carriers have been asked to waive any cost-sharing, including co-pays, deductibles, and coinsurance for Centers for Disease Control and Prevention (CDC) recommended laboratory testing of COVID-19.  In addition, health carriers have also been asked to waive cost-sharing for an in-network provider office visit, urgent care center visit, or an emergency room visit when testing for COVID-19. This includes short-term limited duration policies but does not include health sharing ministries as those plans are generally not subject to any regulation.

If I test positive for COVID-19 and I need treatment, will that be covered by my insurance?
Health benefit plans cover medically necessary treatment for disease but the treatment may be subject to deductibles, copayments and coinsurance. You will need to pay those amounts, even if the care is covered. If you have a short-term limited benefit plan, there may be additional limits on what is covered.

Will an immunization for COVID-19 be covered in the future?
Pursuant to Bulletin 2020-1, in the event an immunization becomes available for COVID-19, the Department has requested that health carriers immediately cover the immunization at no cost sharing for all covered members. 

Can my health insurance be canceled if I am diagnosed with COVID-19?
Health insurance may not be canceled based on a new diagnosis. If you have a short-term medical plan, your claims may be reviewed to see if you had a pre-existing condition.

Can an insurance company refuse to sell me health insurance if I am diagnosed with COVID-19?
During the standard open enrollment period, or if you have a special enrollment period for a health benefit plan, you cannot be denied coverage that qualifies as a health benefit plan under the Affordable Care Act. Being diagnosed with COVID-19 would not qualify for a special enrollment period. If you are applying for a short-term medical plan, hospital indemnity plan or other health insurance that is not a health benefit plan under the Affordable Care Act, the insurer can refuse to sell you insurance if you do not meet their underwriting guidelines.

What if I have Medicare?
Medicare Part B covers many preventive services, such as screenings, vaccines and counseling. If you meet the eligibility requirements and guidelines for a preventive service, you must be allowed to receive the service. This is true for Medicare and Medicare Advantage plans, however, your plan’s coverage rules may apply.

If you have questions or concerns about your Medicare insurance coverage, contact the State Health Insurance Counseling (SHIC) program by phone at (701) 328-2440 or (800) 247-0560 or via email at insurance@nd.gov.

Additional information about Medicare and COVID-19 can be found on the Centers for Medicaid and Medicare website or at Medicare.gov.

What if I lose my group coverage from my employer or have had a decrease in my income and already have an individual plan? 
People who have lost their job or substantial income can immediately visit the Health Insurance Exchange Marketplace (HealthCare.gov) to see if they qualify for free or low-cost insurance. People losing a job that provided health benefits qualify for a special enrollment period on the Exchange. Another special enrollment period is triggered whenever someone loses income and qualifies either for premium tax credits or increased protection from out-of-pocket costs. Qualifying income losses happen when income moves from above to below any of the following thresholds: 400%, 250%, 200% or 150% of the federal poverty level. Moreover, adults and children who go to the Exchange for help can enroll in Medicaid or the Children’s Health Insurance Program (CHIP) at any time, whenever their monthly income is at or below specified levels.

Is there anything available for assistance for individuals who are on unemployment due to COVID-19 layoffs and cannot afford COBRA coverage or Marketplace (Healthcare.gov) plans?
A short-term medical plan is a temporary health insurance policy typically offering “bare-bones” coverage designed for use during unexpected coverage gaps. An individual can only hold a short-term medical plan for a short period of time, less than one year. These plans are nonrenewable. Furthermore, they do not meet the coverage requirements of the Affordable Care Act (ACA), meaning an individual may have to pay a monetary penalty for not carrying acceptable health insurance coverage.

With the regulations established by the ACA, short-term medical, limited benefit and discount medical plans have become increasingly popular. However, consumers must be aware of what they are purchasing before replacing their comprehensive major medical coverage with one of these options. Remember, if it sounds too good to be true, it probably is.

Short-term Medical, Limited Benefit and Discount Medical Plans Guide

Travel Insurance

A standard travel insurance policy covers things such as trip cancellation, travel medical and sickness, emergency medical evacuation and accidental death and dismemberment. 

The “cancellation and interruption” coverage typically covers trip cancellation if you or a family member are prevented from taking your trip for a reason covered by your policy. You will usually receive reimbursement if your trip is canceled for unexpected illness or injury or if a doctor deems you or your traveling companion(s) unfit for travel; hospitalization or death of a non-traveling family member; unforeseen weather disaster at your home or travel destination; a legal obligation such as being called for jury duty or serving as a witness in court. However, many travel insurance policies exclude epidemics or pandemics.

COVID-19 is now considered a known pandemic event, meaning it is not likely that travel insurance policies will cover changes in plans or cancellations for that reason. However, if your policy was purchased before it became a “known event” and you became sick or quarantined, and can provide documentation of it, you might have coverage depending on your policy. 

It is also possible to purchase “cancel for any reason” coverage which likely enables you to cancel your travel plans for reasons not covered in a base or standard policy.

If I get sick from COVID-19 while I am traveling, will my travel insurance policy pay for my care?
Pursuant to Bulletin 2020-1, unless a travel insurance policy contains an exception applicable to COVID-19, a policy of travel insurance that covers the risks sickness, accident or death incident to travel presumptively must cover such risks relating to COVID-19 including emergency transportation within a foreign country, as well as the costs of returning to the U.S. for further treatment.  

Does travel insurance cover cancellation of a trip related to COVID-19?
Trip cancellation coverage is subject to the terms and conditions of your policy. You can review the fulfillment materials you received and the policy itself to see what type of cancellation coverage you purchased.

Life Insurance

All life insurance policies have one thing in common – they’re designed to pay money to beneficiaries upon death of the insured. There are two basic types of life insurance policies: term life insurance and cash value insurance. 

Term life insurance covers you for a term of one or more years and pays a death benefit if the insured dies during the term of the contract.

Cash value life insurance is a form of permanent life insurance that features a cash value savings account component. The following types of permanent life insurance policies may include a cash value feature: whole life insurance, universal life insurance, variable life insurance, and indexed universal life insurance. The cash value is the portion of your policy that earns interest and may be available for the policyowner to withdraw or borrow.

There is no pandemic exclusion for life insurance. General life insurance covers pandemics, assuming you were truthful about your travel plans and exposure to illness during the application process. However, the cash value component of your life insurance policy may be tied to equity markets, long term interest rates, or a specific market index, such as the S&P 500, which have been impacted by COVID-19. Most case value life insurance contracts also guarantee a certain minimum rate of return that could exceed current market conditions.

An accidental death & dismemberment policy is more limited and covers deaths only when they are accidental. It generally does not cover deaths caused by illness or disease.

Can a life insurance company refuse to pay a death benefit if the person dies from an illness related to COVID-19?
A life insurance policy must pay a death benefit based on the policy. An insurance company may deny claims within two years after the date the policy is issued if there were material misrepresentations on the application.

Can a life insurance, long-term care insurance, or disability insurance company refuse to sell me a policy if I am diagnosed with COVID-19?
Yes, if the denial is based on their underwriting guidelines and the guidelines comply with North Dakota law.

If I am told that I need to stay home because I have tested positive for COVID-19, will my disability insurance policy pay a claim?
No. Your disability policy will only pay if you meet the definition of disability in the policy and have satisfied any elimination period. Review your policy closely as there may be various details around elimination periods and how long you are out of work. 

Business Insurance

Will my business disruption insurance cover me during a shutdown?
Unfortunately, it’s unlikely that you will find coverage through your business disruption coverage. Generally, the triggering event for coverage would include physical damage; a pandemic is not considered physical damage. Also, under business disruption coverage there can be Civil Authority coverage, this too generally is triggered by physical damage. 

Standard policies also usually contain an exclusion for viral pandemics or pandemics. These exclusions arose in or around 2003, during the SARs outbreak and are traditionally maintained in the standard language of commercial insurance. Keep in mind that policies can differ greatly, so it’s always important to talk with your licensed insurance agent to clarify exactly what is or is not included in your coverage.

  • Business interruption insurance coverage protects against losses sustained due to periods of suspended operations; it pays loss of revenue that would have been earned if there was no business interruption. It typically provides coverage only if a physical loss to property occurs and may have specific exclusions for viral infections such as COVID-19.
  • Contingent business interruption insurance policies protect against losses from supply chain disruptions but may require the occurrence of property damage to trigger coverage. 
  • Event cancellation insurance provides coverage for expenses arising from delays, rescheduling or cancellations due to unforeseen covered events. Typically, contingent business interruption and event cancellation insurance policies exclude coverage for communicable diseases, such as COVID-19.

Does my commercial policy cover COVID-19 for my business? 
It is very important to review the provisions in your business polices, particularly business income policies. Here are some things to look for in your policy;

  • Business income polices reimburse an owner due to loss of income due to a suspension of operations.  
  • Common Policy Verbiage:  We will pay for the actual loss of Business Income you sustain due to the necessary "suspension" of your "operations" during the "period of restoration". The "suspension" must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit Of Insurance is shown in the Declarations. 

The Department recommends that you contact your agent to review your policy and ask additional questions.

If a government authority makes me close my business, does the “Civil Authority” additional coverage trigger coverage? 
While a loss does not need to occur to your business for Civil Authority additional coverage to be triggered, a loss does need to occur to another business for there to be coverage. Again, the Department recommends that you review your policy with your agent.  
 
Common policy verbiage: In this Additional Coverage, Civil Authority, the described premises are premises to which this Coverage Form applies, as shown in the Declarations.  When a Covered Cause of Loss causes damage to property other than property at the described premises, we will pay for the actual loss of Business Income you sustain…  
 
What about contingent business income?   
Contingent business income provides coverage when a supplier has suffered a loss, therefore forcing your business to not be able to function. The trigger for contingent business income would be a loss to the supplier’s property. 
 
What is the definition of a loss?   
Most policies contain similar definitions to those listed below, however, the Department recommends reviewing your specific policy for accurate definitions.   
 
Losses are broken down under three main coverages: 

  • Basic – named perils needs to be listed in the policy. 
  • Broad – named perils needs to be listed in the policy. 

Example of a named peril: 
Infectious Diseases – this includes loss caused by the complete interruption of your operations by an infectious disease acquired by your employees or staff.
 

  • Special – covers any loss not excluded in the policy, must be direct physical loss. 

Example of an exclusion: 
Virus or Bacteria – any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease. 
 
 Common Policy Verbiage: When Special is shown in the Declarations, Covered Causes of Loss means direct physical loss unless the loss is excluded or limited in this policy.

What is the state of North Dakota or federal government doing to support businesses?
There are discussions underway at both the state and federal level about finding a way to make this pandemic a triggering event. While that would potentially bring coverage, it would have a massive effect on the insurance industry. Insurance is a product that is risk rated and sold based on those risks that are covered in the policy. This type of event was excluded from many policies, and to retroactively enact coverage would put the entire insurance industry at risk of insolvency. This move could also lead to dramatic rate increases, which could also make insurance unaffordable to businesses as we look to recover from this pandemic. 

Additionally, the government retroactively amending contracts (insurance agreements) would also face significant constitutional issues and would ultimately be challenged in court. 

The best option at this point may be to explore what resources are available in North Dakota and through the federal government. To learn more about disaster loans and other programs to help business owners during this difficult time, visit ndresponse.gov/covid-19-resources

Annuities

An annuity is an insurance contract sold by insurance companies. Generally, the beneficiary pays an insurance company a premium and in return, the insurer provides income payments at regular intervals for a certain period or throughout the rest of your life 

Annuities can be generally classified as either fixed, variable or indexed, based on the provisions of the contract. 

  • In a fixed annuity contract the beneficiary receives a fixed income stream for the term of the contract. 
  • In a variable annuity contract, the value of the contract varies based on the performance of an underlying portfolio of securities or mutual funds. 
  • In an indexed annuity, the value of the contract varies based on the performance of a specified market index, such as the S&P 500. 

Because annuity contracts may be tied to long-term interest rates or equity markets, which have been impacted by COVID-19, the value of various annuity contracts may now be affected. 

Some variable annuity and indexed contracts also guarantee a certain minimum rate of return that could exceed current market conditions. Be sure to review your annuity contract to determine if it is fixed, variable or indexed and whether it has a guaranteed minimum rate of return. Policyholders should also monitor their annuity payments and the performance of the underlying investments on an ongoing basis.

General Liability Insurance

General liability policies cover obligations for bodily injury and property damage, so there could be third party liability if there are bodily injury claims resulting from exposure to COVID-19. However, some policies may have exclusions for losses resulting from epidemics, pandemics or spread of disease. 

Directors and officers policies provide coverage for lawsuits brought against a company’s directors or officers for actions they may or may not have taken that negatively impact the company. There may be lawsuits related to COVID-19 whether or not a company took adequate steps to prevent its spread, had contingency plans in place for such an event, or activated/executed those plans appropriately. Claims for financial damage to the business or shareholders may be covered. 

Many of these types of insurance are customized for the business, so it is important to read your policy to understand what losses are covered.

Avoiding COVID-19 Scams

Scammers are using COVID-19 to scare people into sharing their personal information. Some even claim to have top-secret vaccines or cures.

  • Do not fall for these false claims. Avoid sharing your personal or financial information based on panic or fear.
  • Do not share your personal information with anyone you do not know.
  • Do not open an email or click on any links or attachments unless it is from a source you know and trust.
  • Rely on trusted sources, such as the Centers for Disease Control and Prevention (CDC) and the North Dakota Department of Health, for up-to-date information about COVID-19 treatment and vaccines. 
  • The North Dakota Insurance Department provides regular updates on insurance services related to COVID-19.

Avoid scams requiring downloads to view COVID-19 maps. Maps and information can be viewed on reputable webpages.

  • There is an email going around that claims to let you download a COVID-19 map with information. This is a scam trying to get you to download a malicious app/file. It requires the user to either download the app, or it can be distributed by email for the user to install onto their system. It pretends to be the John Hopkins dashboard to make the viewer think they are getting an official coronavirus dashboard.
  • Do not download an app to view the dashboard. The dashboard can be viewed through your browser.
  • Click here to view the official online dashboard with a map posted by Johns Hopkins University.
  • Click here to view the North Dakota Department of Health North Dakota dashboard.
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The Department encourages consumers to review their policy documents, contact their insurance agent or broker for assistance, and if needed, contact us with further questions. If you have questions specific to COVID-19 and insurance, please email us at insurance@nd.gov using the terms “COVID-19 Insurance Question” in the subject line.