FAQs About Portability Of Health Coverage And HIPAA What is the Health Insurance Portability and Accountability Act of 1996 (HIPAA)?
HIPAA is complemented by state laws that, while similar to HIPAA, may offer more generous protections. You may want to contact your state insurance commissioner's office to ask about the law where you live. A good place to start is the Web site of the National Association of Insurance Commissioners at www.naic.org. One of the most important protections under HIPAA is that it helps those with preexisting conditions get health coverage. In the past, some employers' group health plans limited, or even denied, coverage if a new employee had such a condition before enrolling in the plan. Under HIPAA, that is not allowed. If the plan generally provides coverage but denies benefits to you because you had a condition before your coverage began, then HIPAA applies. Under HIPAA, a plan is allowed to look back only 6 months for a condition that was present before the start of coverage in a group health plan. Specifically, the law says that a preexisting condition exclusion can be imposed on a condition only if medical advice, diagnosis, care, or treatment was recommended or received during the 6 months prior to your enrollment date in the plan. As an example, you may have had arthritis for many years before you came to your current job. If you did not have medical advice, diagnosis, care, or treatment – recommended or received – in the 6 months before you enrolled in the plan, then the prior condition cannot be subject to a preexisting condition exclusion. If you did receive medical advice, diagnosis, care, or treatment within the past 6 months, then the plan may impose a preexisting condition exclusion for that condition (arthritis). In addition, HIPAA prohibits plans from applying a preexisting condition exclusion to pregnancy, genetic information, and certain children. If you have a preexisting condition that can be excluded from your plan coverage, then there is a limit to the preexisting condition exclusion period that can be applied. HIPAA limits the preexisting condition exclusion period for most people to 12 months (18 months if you enroll late), although some plans may have a shorter time period or none at all. In addition, some people with a history of prior health coverage will be able to reduce the exclusion period even further using “creditable coverage.” Remember, a preexisting condition exclusion relates only to benefits for your (and your family’s) preexisting conditions. If you enroll, you will receive coverage for the plan’s other benefits during that time. Although HIPAA adds protections and makes it easier to switch jobs without fear of losing health coverage for a preexisting condition, the law has limitations. For instance, HIPAA:
Can a plan deny benefits for chronic illnesses or injuries, like carpal
tunnel syndrome, diabetes, heart disease, and cancer using a preexisting
condition exclusion? Are there illnesses or injuries that cannot be subject to a preexisting
condition exclusion?
I just changed jobs. Seven months ago, I received my last treatment for
carpal tunnel syndrome. Can my new employer’s plan apply a preexisting
condition exclusion? My new employer has a waiting period before any new hire can enroll in the
group health plan. How does this relate to a preexisting condition exclusion
period? If a plan has a general waiting period and a preexisting condition exclusion period, both time periods must run concurrently. For example, an employer may impose a 3-month waiting period for all employees to begin health coverage. Some employees may also be subject to the maximum preexisting condition exclusion period of 12 months. In this example, the maximum preexisting condition exclusion period remaining is 9 months long. Be aware that your plan may not have a preexisting condition exclusion period, so be sure you know your new company's policy when you enroll. What happens if I don't enroll in my employer's health plan at the first
chance? Being a late enrollee will not cause you to lose HIPAA’s protections. One immediate consequence, however, is that the maximum preexisting condition exclusion period is 18 months, rather than the 12 months for those who enroll at the first chance. Are all family members, including a spouse, covered by
HIPAA? Are there protections on discrimination in pricing if I have a preexisting
condition? Can I reduce or eliminate the maximum
preexisting
condition exclusion period? Is there a limit to the period of time I can go without coverage between
jobs if I want to reduce the length of a preexisting condition exclusion? I began working for a new employer 45 days after my prior group health
plan was terminated. I had continuous coverage in my former employer's plan for
24 months with no other coverage between jobs. Can I be subject to a preexisting
condition exclusion period? I have a preexisting condition. I began employment at my current job 100
days after I resigned from my previous job. I had continual coverage in my
previous employer's health plan for 36 months but none between jobs. Can I be
excluded from coverage? How do I calculate the length of a preexisting condition exclusion in a
new employer’s health plan? A preexisting condition exclusion can last 12 months at most, if the person enrolls when first eligible. This employee has 8 months of creditable coverage. His earlier 2 years of health coverage are not creditable because he had a break in coverage that was more than the 63 days allowed under the law. His preexisting condition exclusion will last 4 months after he enrolls in the employer's health plan. If the same employee had a break in coverage of only 60 days, his story would be different. This would not be a significant break and he could use the earlier 2 years of coverage to completely offset the preexisting condition exclusion period. How do I avoid a 63-day significant break in health coverage?
Is there anything I can do if I have a preexisting condition and the
credit I received from my last health plan does not cover my new employer's
preexisting condition exclusion period?
How do I prove my creditable coverage? What is the certificate of creditable coverage?
What information will be on the certificate? What amount of time should a certificate cover?
When must my employer provide the certificate?
Also, be aware that health plans must issue certificates, even if they do not exclude coverage for preexisting conditions. While an employee may not need a certificate in a current job, she might if a future employer’s plan has a preexisting condition exclusion. What steps should I take if I didn't get a certificate or I lose it? How
can I show that I had prior coverage?
In addition to providing these documents, an individual may be asked to attest to the period of creditable coverage and cooperate with the new plan’s reasonable efforts to verify creditable coverage. You should still get in touch with the plan's administrator to request a certificate for your records. The administrator’s contact information is usually included in the plan brochure you received when you signed up for health coverage. Are health plans required to issue certificates of creditable coverage to
dependents? What are the next steps after I get my certificate? What is a special enrollment opportunity? There are two types of special enrollment - upon loss of eligibility for other coverage and upon certain life events. Under the first, employees and dependents who decline coverage due to other health coverage and then lose eligibility or lose employer contributions have special enrollment rights. For instance, an employee turns down health benefits for herself and her family because the family already has coverage through her spouse's plan. Coverage under the spouse's plan ceases. That employee then can request enrollment in her own company's plan for herself and her dependents. Under the second, employees, spouses, and new dependents are permitted to special enroll because of marriage, birth, adoption, or placement for adoption. For both types, the employee must request enrollment within 30 days of the loss of coverage or life event triggering the special enrollment. What are some examples of events that can trigger a loss of eligibility
for coverage?
These should give you some idea of the types of situations that may entitle you to a special enrollment right. How long do I have to request special enrollment? After I request special enrollment, how long will I wait for coverage? For special enrollment due to marriage or loss of eligibility for other coverage, your new coverage will begin on the first day of the first month after the plan receives the enrollment request. If the plan receives the request on January 3, for example, coverage would begin on February 1. What happens if a special enrollee has a preexisting condition? A newborn, an adopted child, or a child placed for adoption cannot have a preexisting condition exclusion, as long as the child is enrolled in health coverage within 30 days of the event, without a subsequent significant break in coverage. Where do I find out more about special enrollment in my plan? What coverage will I get when I take advantage of a special enrollment
opportunity? What are HIPAA's protections from discrimination? What are the health factors under
HIPAA?
Conditions arising from acts of domestic violence as well as participation in activities like motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, and skiing are considered “evidence of insurability.” Therefore, a plan cannot use them to deny you enrollment or charge you more for coverage. (However, benefit exclusions known as source of injury exclusions could affect your benefits.) Can a group health plan require me to pass a physical examination before I
am eligible to enroll? Can my plan require me to take a physical exam or fill out a health care
questionnaire in order to enroll? My group health plan required me to complete a detailed health history
questionnaire and then subtracted “health points” for prior or current
health conditions. To enroll in the plan, an employee had to score 70 out of 100
total points. I scored only 50 and was denied a chance to enroll. Can the plan
do this? My group health plan booklet states that if a dependent is confined to a
hospital or other medical facility at the time he is eligible to enroll in the
plan, that person's eligibility is postponed until he is discharged. Is this
permitted? My group health plan has a 90-day waiting period before allowing employees
to enroll. If an individual is in the office on the 91st day, health coverage
begins then. However, if an individual is not "actively at work" on
that day, the plan states that coverage is delayed until the first day that
person is actually at work. I missed work on the 91st day due to illness. Can I
be excluded from coverage? However, a plan may require employees to begin work before health plan coverage is effective. A plan may also require an individual to work full time (say, 250 hours per quarter or 30 hours per week) in order to be eligible for coverage. My group health plan imposes a 12-month preexisting condition exclusion
period. After the first 6 months, however, it is waived for individuals who have
not had any claims since enrollment. Is this practice allowed? How do you determine "similarly situated individuals"? A plan may draw a distinction between employees and their dependents. Plans can also make distinctions between beneficiaries themselves if the distinction is not based on a health factor. For example, a plan can distinguish between spouses and dependent children, or between dependent children based on their age or student status. My health plan has a $500,000 lifetime limit on all of the benefits
covered in the plan. In addition, there is a $2,000 lifetime limit on all
benefits provided for one of my health conditions. Can a plan set these kinds of
restrictions? I have a history of high claims. Can I be charged more than others in the
plan based on my claims experience? However, be aware that HIPAA does allow an insurer to charge one group health plan (or employer) a higher rate than it does another. When an insurance company establishes its rates, it may underwrite all covered individuals in a specific plan based on their collective health status. The result can be that one employer health plan whose enrollees have more adverse health factors can be charged a higher premium than another for the same amount of coverage. Think of it this way: HIPAA’s protections from discrimination apply within a group of similarly situated individuals, not across different groups of similarly situated individuals. For example, an employer distinguishes between full-time and part-time employees. It can charge part-time employees more for coverage, but all full-time employees must pay the same rate, regardless of health status. Also, take note that, for insured plans, state law may require the use of other methods for setting rates for health coverage. More information is available at www.naic.org. I am an avid skier. Can my employer's plan exclude me from enrollment
because I ski? Can my health plan deny benefits for an injury based on how I got it? Therefore, a plan cannot exclude coverage for self-inflicted wounds, including those resulting from attempted suicide, if they are otherwise covered by the plan and result from a medical condition (such as depression). However, a plan may exclude coverage for injuries that do not result from a medical condition or from domestic violence. For example, a plan generally can exclude coverage for injuries in connection with an activity like bungee jumping. While the bungee jumper may have to pay for treatment for those injuries, her plan cannot exclude her from coverage for the plan’s other benefits. My group health plan says that dependents are generally eligible for
coverage only until they reach age 25. However, this age restriction does not
apply to disabled dependents, who seem to be covered past age 25. Does HIPAA
permit a policy favoring disabled dependents? HIPAA And Wellness Programs I belong to a group health plan that rewards individuals who volunteer to
be tested for early detection of health problems, such as high cholesterol. Can
a plan do this? Can a plan charge a lower premium for nonsmokers than it does for smokers?
Note: The wellness program rules are generally effective for plan years starting on or after July 1, 2007. How does HIPAA impact state laws? The list below summarizes those areas where state laws can complement HIPAA’s preexisting condition and special enrollment provisions:
In other areas of HIPAA, such as protections from discrimination, state laws may also supplement HIPAA’s protections if the coverage is through an insured plan. Check your SPD to see if your plan is insured and visit your state insurance commissioner's office or the National Association of Insurance Commissioners’ Web site at www.naic.org for more information. How can COBRA be used to extend your health coverage? There are several ways to use COBRA in conjunction with HIPAA:
How does HIPAA apply when changing from group health coverage to an individual insurance policy? The law guarantees access to individual insurance policies and state high-risk pools for eligible individuals. They must meet all of the following criteria:
The opportunity to buy an individual policy is the same whether a person quits a job, was fired, or was laid off. |
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