Health Insurance Claim Provisions

Instructor: Deborah Schell

Deborah teaches college Accounting and has a master's degree in Educational Technology.

In order for an insurance company to pay any health expenses you've incurred, you must submit documentation. In this lesson we will learn about the provisions included in health insurance policies.

What Are Health Insurance Claims?

Let's meet Susan, who has just visited the doctor and received a prescription. She had the prescription filled at the pharmacy and wants to submit her claim to her insurance company, but isn't sure how to do so or how long she'll have to wait to be paid. Let's see if we can help Susan understand the health insurance claims process.

Health insurance is a type of insurance that pays for expenses you incur due to an illness, an injury, or a medical condition. You usually pay a premium, or the cost of the policy, and this covers you for the items described in the benefit package.

Depending on your plan, you may be required to pay the expense yourself and then submit the claim to the insurance company for reimbursement. Alternatively, your medical provider may submit the claim directly, and you may then only need to pay the amount that your insurer does not. Let's look more closely at the health insurance claim process.

Notice of Claim Provision

A notice of claim provision requires the individual who is insured by the policy to provide the insurance company with written notification of a loss. Then company will then cover the loss within a certain number of days after the loss occurred. The number of days varies from insurance company, to insurance company but it is usually under 30 days.

By setting a time limit, the insurance company has reasonable assurance that it will be able to access any documentation that might be relevant to the claim. If the company were to try to go back and investigate a loss a year later, it may not have all the documentation it needs.

If you fail to provide the insurance company with the proper notice, you risk the insurance company not paying your claim. Let's assume that Susan's policy has a 20-day notice of claim provision, and she incurred a loss that is covered by her policy on June 5th. Under the notice of claim provision, she would have until June 25th to notify her insurance company of the loss - otherwise she risks not getting her claim paid by the company.

Claim Forms

If you want reimbursement for a claim for which you paid, you must submit a claim form to your insurance company. A claim form provision states that your insurance company has 15 days to provide you with the proper claim form to document your loss.

While each insurance company has its own claim form, there is some information common to all of them, such as:

  • Policyholder information
  • Information on coordination of benefits
  • Information about whom the claim is for
  • Details about the nature and cost of the claim
  • Declaration

Let's look at each of these in more detail.

A claim form requires detailed information about the policyholder such as his/her name, the policy or certificate number, and his/her full address and phone number. The insurance company also needs to know if another insurance policy covers the individual who incurred the expenses. This is known as coordination of benefits, and it is the process of coordinating payment among different insurance companies if an individual is covered under more than one plan.

For example, if Susan is also covered under her husband's health insurance plan, her insurance company needs to know this, as they don't want to pay Susan more than 100% of the cost that she incurred. Insurance companies also need to know who is covered by another policy in the event that the claim is for a child, as there are rules regarding which parent must claim the expense first. (The parent whose birthdate falls earlier in the year is usually the one who should claim the expense first.)

When completing the claim form, Susan would have to note the date, nature, and amount of the expense and she would have to submit documentation of this, such as a receipt, as proof. Claim forms also require the policyholder to sign a declaration stating that the claim information is accurate and complete.

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