(Camden, NJ) – On April 9, Governor Phil Murphy signed Executive Order No. 123 extending grace periods during which certain insurance companies, including health insurers, life insurers, and property and casualty insurers, will not be able to cancel policies for nonpayment of premiums.
Under the order, which took effect immediately on April 9, health and dental insurers are required to provide a 60-day grace period for unpaid premiums, while life, property, and casualty insurers are required to provide a 90-day grace period. Additionally, insurers must waive certain late fees, interest, and other charges associated with delays in premium payments.
“Social distancing is our best weapon to fight coronavirus, but we cannot let the loss of income or employment that millions of Americans are experiencing put people further at risk,” said Freeholder Director Louis Cappelli, Jr. “The Governor has continually updated rules and guidance for insurers, landlords, banks, and employers. Be sure to stay informed on the latest changes and know your rights as this crisis continues to unfold.”
The extended grace periods do not apply to employer-funded health plans, which are exclusively regulated by the federal government. Insurance companies are required to continue paying any claims incurred during the emergency grace period that would be covered under the policy, and they will not be permitted to seek recoupment of any claims paid during this period.
To ensure that policyholders are not required to make a lump sum payment on unpaid premiums at the end of the grace period, the order requires any unpaid premium to be amortized over the remainder of the policy terms (up to 12 months).
For more information on the governor’s order, click here.
To read the full executive order, click here.