South Carolina Life and Health Practice Exam

What is the maximum time period an eligible employee can be excluded from coverage as a late enrollee under a group health policy?

1. 12 months

2. 24 months

3. 18 months

4. 6 months

The correct answer is: 18 months

Under group health policies, a late enrollee is defined as an eligible employee who does not enroll during the initial enrollment period and seeks to join the group plan at a later date. In South Carolina, the maximum time period that a late enrollee can be excluded from coverage is 18 months. This period allows insurers to manage the risks associated with late enrollment, as late enrollees may be more likely to have preexisting conditions that could lead to higher claims. Thus, the provision of an 18-month exclusion is intended to balance the interests of the insurer in managing potential losses while also providing a clear guideline for when coverage must be granted. After this period, the late enrollee must be accepted into the group coverage under the same terms as other enrolled participants.