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Health Insurance Reform for Consumers

What HIPAA Does and Does Not Do

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) includes important - but limited - protections for millions of working Americans and their families. If you have one of the following types of coverage:


1.   Self-funded group health plans (CMS has jurisdiction over self-funded public sector (non federal governmental) plans while the Department of Labor 866-444-3272 has jurisdiction over private sector self-funded group health plans.);

2.  Fully insured group health plans;

3.  Individual (non-employment based) health insurance policies; or

4.  Comparable coverage through State high risk pools, if applicable in your State;

then HIPAA may:

  1. Increase your ability to get health coverage for yourself and your dependents if you start a new job;
  2. Lower your chance of losing existing health care coverage, whether you have that coverage through a job, or through individual (non-employment based) health insurance;
  3. Help you maintain continuous health coverage for yourself and your dependents when you change jobs; and
  4. Help you buy health insurance coverage on your own if you lose coverage under an employer's group health plan and have no other health coverage available.

Among its specific protections, HIPAA:

  1. Limits the use of pre-existing condition exclusions;
  2. Prohibits most group health plans from discriminating by denying you coverage or charging you extra for coverage based on your or your family member's past or present poor health;
  3. Guarantees certain small employers, and certain individuals who lose job-related coverage, the right to purchase health insurance; and
  4. Guarantees, in most cases, that employers or individuals who purchase health insurance can renew the coverage regardless of any health conditions of individuals covered under the insurance policy.

In short, HIPAA may lower your chance of losing existing coverage, ease your ability to switch health plans and/or help you buy coverage on your own if you lose your employer's plan and have no other coverage available.


Contact your state's insurance department to find out about whether additional protections apply to your coverage if you are in a fully insured group health plan or have individual market (non-employment based) health coverage.


Employment related group health plans that provide benefits through insurance are known as fully insured group health plans. Employment related group health plans that pay for coverage directly, without purchasing health insurance from an issuer, are called self-funded group health plans.  Contact your plan administrator to find out if your group coverage is fully insured or self-funded.  Non-employment related individual health insurance policies are sold to individual policy holders.  If applicable, your State of residence may offer comparable coverage through a State high risk pool.


Misunderstandings About HIPAA

Although HIPAA helps protect you and your family in many ways, you should understand what it does NOT do.

  1. HIPAA does NOT require employers to offer or pay for health coverage for employees or family coverage for their spouses and dependents;
  2. HIPAA does NOT guarantee health coverage for all workers;
  3. HIPAA does NOT control the amount an insurer may charge for coverage;
  4. HIPAA does NOT require group and individual (non-employment based) health plans to offer specific benefits;
  5. HIPAA does NOT permit people to keep the same health coverage they had in their old job when they move to a new job;
  6. HIPAA does NOT eliminate all use of pre-existing condition exclusions; and
  7. HIPAA does NOT replace the State as the primary regulator of health insurance.

CMS has addressed various HIPAA-related issues in a series of Program Memoranda.  The "HIPAA Title I Bulletins" are individually listed on a separate page, see the left hand side column of this page.   The bulletins can be located by the following categories: Date, Type of  (i.e., Group, Individual, or Group & Individual), Bulletin Number, and Subject.

For additional information, you may e-mail us at phig@cms.hhs.gov.


Note:  A non federal government employer that provides self-funded group health plan coverage to its employees (coverage that is not provided through an insurer) may elect to exempt its plan (opt-out) from most requirements of title XXVII of the Public Health Service (PHS) Act, with the exception of requirements pertaining to the certification and disclosure of an individual's creditable coverage under the plan and the issuance of a notice of opt out to enrollees at the time of enrollment and on an annual basis thereafter.


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Page Last Modified: 05/27/2008 11:20:04 AM
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