If a policy has an annual maximum, what happens to benefits after the cap is reached within a calendar year?

• A. No further benefits for remainder of year.
• B. Benefits continue at 50%.
• C. Benefits reset monthly.
• D. Only emergency services are covered.

Answer: (A)

An annual maximum is the yearly limit the plan will pay for covered benefits. Once that limit is reached within a calendar year, no additional benefits are paid for the rest of that year, and you would be responsible for any further costs that would have been covered. The maximum resets at the start of the next calendar year, so benefits can again be paid up to the new limit. The other options don’t fit this concept: benefits don’t continue at a fixed percentage after the cap, they don’t reset monthly, and coverage isn’t limited to emergencies after the cap—most services become payable by you once the annual maximum is reached.