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The Health Insurance Portability and Accountability Act
of 1996 (HIPAA), amended the Employee Retirement Income Security Act to
provide new rights and protections for participants and beneficiaries in
group health plans. HIPAA contains protections both for health
coverage offered in connection with employment (group health plans) and
for individual insurance policies sold by insurance companies (individual
policies).
HIPAA includes protections for coverage under group
health plans that:
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Limit exclusions for preexisting conditions
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Prohibit discrimination against employees and
dependents based on their health status
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Allow a special opportunity to enroll in a new plan
to individuals in certain circumstances
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Most health coverage is creditable coverage, such as
coverage under a group health plan (including COBRA continuation
coverage), HMO, individual health insurance policy, Medicaid or Medicare.
Creditable coverage does not include coverage
consisting solely of excepted benefits, such as coverage solely for
limited-scope dental or vision benefits.
Days in a waiting period during which an individual has
no other coverage are not creditable coverage under the plan, nor are
these days taken into account when determining a significant break in
coverage (generally a break of 63 days or more). This 63-day break
period may be extended under state law if the coverage is insured through
an insurance company or offered through an HMO. Check with your
State Insurance Commissioner's Office to see whether a longer break period
applies to you.
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Plans and issuers must furnish the certificate
automatically to:
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An individual who is entitled to elect COBRA
continuation coverage, at a time no later than when a notice is
required to be provided for a qualifying event under COBRA
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An individual who loses coverage under a group
health plan and who is not entitled to elect COBRA continuation
coverage, within a reasonable time after coverage ceases
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An individual who has elected COBRA continuation
coverage, either within a reasonable time after the plan learns that
COBRA continuation coverage ceased or, if applicable, within a
reasonable time after the individual's grace period for the payment of
COBRA premiums ends
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Yes. A plan or issuer must make reasonable
efforts to collect the necessary information for dependents and issue the
dependent a certificate of creditable coverage. If the coverage
information for a dependent is the same as for the employee, one
certificate with both the employee and dependent information can be
provided.
However, an automatic certificate for a dependent is
not required to be issued until the plan or issuer knows (or, making
reasonable efforts, should know) of the dependent's loss of coverage.
This information can be collected annually, such as during an open
enrollment period. |
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Most plans use the standard method of crediting
coverage.
Under the standard method, an individual receives
credit for previous coverage that occurred without a break in coverage of
63 days or more. Any coverage occurring prior to a break in coverage
of 63 days or more is not credited against a preexisting condition
exclusion period.
To illustrate, suppose an individual had coverage for 2
years followed by a break in coverage of 70 days and then resumed coverage
for 8 months. That individual would only receive credit for 8 months
of coverage; no credit would be given for the 2 years of coverage prior to
the break in coverage of 70 days.
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Yes. A plan or issuer may elect the alternative
method for crediting coverage for all employees.
Under the alternative method of counting creditable
coverage, the plan or issuer determines the amount of an individual's
creditable coverage for any of the five specified categories of benefits.
Those categories are mental health, substance abuse treatment,
prescription drugs, dental care and vision care. The standard method
is used to determine an individual's creditable coverage for benefits that
are not within any of the five categories that a plan or issuer may use.
(The plan or issuer may use some or all of these categories.)
When using the alternative method, the plan or issuer
looks to see is an individual has coverage within a category of benefits
(regardless of the specific level of benefits provided within that
category).
For example, if an individual who is a regular enrollee
(not a late enrollee) has 12 months of creditable coverage, but coverage
for only 6 of those months provided benefits for dental care, a
preexisting condition exclusion period may be imposed with respect to that
individual's dental care benefits for up to 6 months (irrespective of the
level of dental care benefits).
If your employer's plan requests information from your
former plan regarding any of the five categories of benefits under the
alternative method, your former plan must provide the information
regarding coverage under the categories of benefits. One way to
provide this information is to use the Model for
Categories of Benefits.
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HIPAA does not prohibit a plan or issuer from
establishing a waiting period. For group health plans, a waiting
period is the period that must pass before an employee or a dependent is
eligible to enroll under the terms of the plan. Some plans have
waiting periods and preexisting condition exclusion periods.
However, if a plan has a waiting period and a preexisting condition
exclusion period, the preexisting condition exclusion period begins when
the waiting period begins.
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A group health plan is required to allow special
enrollment for certain individuals to enroll in the plan without having to
wait until the plan's next regular enrollment season.
Group health plans and health insurance issuers are
required to provide special enrollment periods during which individuals
who previously declined coverage for themselves and their dependents may
be allowed to enroll (without having to wait until the plan's next open
enrollment period).
A special enrollment opportunity occurs if an
individual with other health insurance loses that coverage or if a person
becomes a new dependent through marriage, birth, adoption or placement for
adoption. However, an individual must notify the plan of their
request for special enrollment within 30 days after losing their other
coverage or within 30 days of having (or becoming) a new dependent.
If an individual enrolls as a special enrollee, they
may not be treated as a late enrollee for purposes of any preexisting
condition exclusion period. Therefore, the maximum preexisting
condition exclusion period that may be applied is 12 months, reduced by
their creditable coverage (rather than 18 months, reduced by creditable
coverage). |
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When the employee or dependent of an employee loses
other health coverage, a special enrollment opportunity in the group
health plan may be triggered. To have a special enrollment
opportunity in this situation, the employee or dependent must have had
other health coverage when coverage under the group health plan was
previously declined. If the other coverage was COBRA continuation
coverage, special enrollment can be requested only after the COBRA
continuation coverage is exhausted. If the other coverage was not
COBRA continuation coverage, special enrollment can be requested when the
individual loses eligibility for the other coverage.
In addition, a special enrollment opportunity may be
triggered when a person becomes a new dependent through marriage, birth,
adoption or placement for adoption.
For each triggering event, a special enrollee may not
be treated as a late enrollee. Therefore, the maximum preexisting
condition exclusion period may be applied to a special enrollee is 12
months, and the 12 months are reduced by the special enrollee's prior
creditable coverage. In addition, a newborn, adopted child or child
placed for adoption cannot be subject to a preexisting condition exclusion
period if the child is enrolled within 30 days of birth, adoption or
placement for adoption and has no subsequent significant break in
coverage. |
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When an employee or a dependent of an employee loses
other health coverage, a special enrollment opportunity may be triggered
(only if the individual had other health insurance coverage when first
eligible to enroll). The employee or dependent must request special
enrollment within 30 days of the loss of coverage.
In addition, the resulting coverage must be effective
no later than the first day of the first calendar month beginning after
the date the completed request for enrollment is received. |
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Employees, as well as their spouses and dependents may
have special enrollment rights after a marriage, birth, adoption or
placement for adoption. In addition, new spouses and new dependents
of retirees in a group health plan may also have special enrollment rights
after a marriage, birth, adoption or placement for adoption.
If a special enrollment opportunity is available, the
individual must request special enrollment within 30 days of the marriage,
birth, adoption or placement for adoption that triggered the special
enrollment opportunity. In the case of marriage, enrollment is
required to be effective not later than the first day of the first
calendar month beginning after the date the completed request for
enrollment is received by the plan. In the case of birth, adoption
or placement for adoption, enrollment is required to be effective not
later than the date of such birth, adoption or placement for adoption. |
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Yes. A description of special enrollment rights
must be provided to employees on or before the time they are offered the
opportunity to enroll in the group health plan, such as that in the model
description. |
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HIPAA and other recent laws made important changes in
ERISA's disclosure requirements for group health plans. Under
current Department of Labor interim disclosure rules, group health plans
must improve their summary plan descriptions (SPDs) and summaries of
material modifications (SMMs) (documents employers are required to provide
to employees at certain key intervals) in four major ways to make sure
they:
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Notify participants and beneficiaries of material
reductions in covered services or benefits (for example, reductions in
benefits or increases in deductibles and co-payments) generally within
60 days of adoption of the change. This compares to current
requirements under which plan changes can be disclosed as late as 210
days after the end of the plan year in which a change was adopted.
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Disclose to participants and beneficiaries
information about the role of issuers (e.g., insurance companies and
HMOs) with respect to their group health plan. In particular,
the name and address of the issuer, whether and to what extent
benefits under the plan are guaranteed under a contract or policy of
insurance issued by the issuer and the nature of any administrative
services (e.g., payment of claims) provided by the issuer.
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Tell participants and beneficiaries which
Department of Labor office they can contact for assistance or
information on their rights under ERISA and HIPAA.
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Tell participants and beneficiaries that federal
law generally prohibits the plan and health insurance issuers form
limiting hospital stays for childbirth to less than 48 hours for
normal deliveries and 96 hours for cesarean sections.
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Under the interim disclosure rules, a material
reduction in covered services or benefits means any modification to a
group health plan or change in the information required to be included in
the summary plan description that, independently or in conjunction with
other contemporaneous modifications or changes, would be considered by the
average plan participant to be an important reduction in covered services
or benefits under the group health plan.
The interim rules cite examples of reductions in
covered services or benefits as generally including any plan modification
or change that:
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Eliminates benefits payable under the plan
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Reduces benefits payable under the plan, including
a reduction that occurs as a result of a change in formulas,
methodologies or schedules that serve as the basis for making benefit
determinations
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Increases deductibles, co-payments or other amounts
to be paid by a participant or beneficiary
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Reduces the service area covered by a health
maintenance organization
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Establishes new conditions or requirements (e.g.,
preauthorization requirements) to obtain services or benefits under
the plan
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Yes. The interim disclosure rules provide a safe
harbor for using electronic media (e.g., e-mail) to furnish group health
plan SPDs, summaries of material reductions in covered services or
benefits and other SMMs (summaries of plan modifications and SPD changes).
To use the safe harbor, among other requirements, employees must be able
to effectively access at their worksite documents furnished in electronic
form. Participants also continue to have a right to receive the
disclosures in paper form on request and free of charge.
Although the interim rule is not the exclusive means by
which electronic media can be used to lawfully communicate plan
information, the HIPAA safe harbor is limited to group health plans.
The Department of Labor is considering extending the rule to other plans,
including pension plans, and to other plan disclosures, but is exploring
whether special precautions are necessary to ensure the confidentiality of
electronically transmitted individual account or benefit-related
information. |
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The Secretary of Labor enforces the health care
portability requirements on group health plans under ERISA, including
self-insured arrangements. In addition, participants and
beneficiaries can file suit to enforce their rights under ERISA, as
amended by HIPAA.
The Secretary of the Treasury enforces the health care
portability requirements on group health plans, including self-insured
arrangements. A taxpayer that fails to comply may be subject to an
excise tax.
States also have enforcement responsibility for group
and individual requirements imposed on health insurance issuers, including
sanctions available under state law. If a state does not act in the
areas of its responsibility, the Secretary of Health and Human Services
may make a determination that the state has failed to substantially
enforce the law, assert federal authority to enforce, and impose sanctions
on insurers as specified in the statute, including civil money penalties. |
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Yes, in certain circumstances. States may impose
stricter obligations on health insurance issuers in the seven areas listed
below. States may:
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Shorten the 6-month look-back period prior to the
enrollment date to determine what is a preexisting condition
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Shorten the 12-and 18-month maximum preexisting
condition exclusion periods
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Increase the 63-day significant break in coverage
period
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Increase the 30-day period for newborns, adopted
children and children placed for adoption to enroll in the plan so
that no preexisting condition exclusion period may be applied
thereafter
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Further limit the circumstances in which a
preexisting condition exclusion period may be applied beyond the
exceptions described in federal law (the exceptions under federal law
are for certain newborns, adopted children, children placed for
adoption, pregnancy, and genetic information in the absence of a
diagnosis)
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Require additional special enrollment periods
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Reduce the maximum HMO affiliation period to less
than 2 months (3 months for late enrollees)
In addition, states may sometimes impose other
requirements with respect to insurance companies and HMOs.
Therefore, if your health coverage is offered through an HMO or an
insurance policy issued by an insurance company, you should check with
your State Insurance Commissioner's Office to find out the rules in your
state. |
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Information On Categories Of Benefits
Date of original certificate:
Name of group health plan providing the coverage:
Name of participant:
Identification number of participant:
Name of individual to whom this information
applies:
The following information applies to the coverage
in the certificate that was provided to the individual identified
above:
Mental Health:
Substance Abuse Treatment:
Prescription Drugs
Dental Care
Vision Care
For each category above, enter N/A if the individual
had no coverage within the category or either (i) enter both the date that
the individual's coverage within the category began and the date that the
individual's coverage within the category ended (or indicate if
continuing), or (ii) enter same on the line if the beginning and ending
dates for coverage within the category are the same as the beginning and
ending dates for the coverage in the certificate. |
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