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HIPAA's is a federal law that:
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Limits the ability of a new employer plan to exclude coverage for
preexisting conditions;
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Provides additional opportunities to enroll in a group health plan if you
lose other coverage or experience certain life events;
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Prohibits discrimination against employees and their dependent family
members based on any health factors they may have, including prior medical
conditions, previous claims experience, and genetic information; and
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Guarantees that certain individuals will have access to, and can renew,
individual health insurance policies.
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:
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Does not require that employers offer health coverage;
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Does not guarantee that any conditions you now have (or have had in the
past) are covered by your new employer's health plan; and
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Does not prohibit an employer from imposing a preexisting condition
exclusion period if you have been treated for a condition during the past 6
months.
It depends on whether you received medical advice, care, diagnosis, or
treatment within the 6 months prior to enrolling in a new employer’s plan. If
you did, you can be subject to a preexisting condition exclusion.
Yes, as follows:
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Pregnancy, even if the woman had no prior coverage before enrolling in her
current employer's plan.
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Conditions present in a newborn or a child under 18 who is adopted or
placed for adoption (even if the adoption is not yet final), as long as the
child is enrolled in health coverage within 30 days of birth, adoption, or
placement for adoption. In addition, the child must not have a subsequent,
significant break in coverage (defined as 63 days). For instance, a significant
break might occur if a parent lost his job and health coverage for himself and
his family shortly after a child’s birth. This break will be discussed
in the Creditable Coverage section.
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Genetic information. For example, if a woman is found to have a gene
indicating she is at a higher risk for breast cancer, she cannot be denied
coverage if there is no diagnosis of the disease.
No. If your last treatment was more than 6 months before enrollment in
your new employer's health plan and you have had no other advice or care
relating to your carpal tunnel syndrome in the last 6 months, your condition
cannot be subject to a preexisting condition exclusion.
An employer's health plan may indeed have a waiting period before any
employee and his/her dependent family members can enroll. If that is the case,
the plan booklet (called a summary plan description (SPD)) will say so.
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.
If, for some reason, you did not enroll in your new employer's health plan
at the first opportunity but do so at a later time, you are a late enrollee. For
example, assume an employee declines coverage in his employer’s health plan
when he starts his new job. This employee decides to enroll 2 years later during
an open enrollment period. At the time the employee wishes to enroll, there is
no special enrollment opportunity (the right to enroll regardless of regular
enrollment dates, see the Special Enrollment
section for when this right arises). When the employee
elects coverage, he is a late enrollee.
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.
If your group health plan permits coverage of family members
("dependents"), and if they participate in the plan, then they will
have the same HIPAA protections as employees, described above.
Yes, see the Nondiscrimination FAQs section.
Yes, if you can show "creditable coverage." Most health
coverage can be used as creditable coverage, including participation in a
group health plan, COBRA continuation coverage, Medicare and Medicaid, as
well as coverage through an individual health insurance policy. However, you should try to avoid a significant break in coverage (63 days)
if you want to be able to count your previous coverage. If you have a break
shorter than 63 days, coverage you had before that break is creditable
coverage and can be used to offset a preexisting condition exclusion
period. Days spent in a waiting period for coverage cannot be used
as credit. But, they also are not counted toward the significant
break (63 days) you are trying to avoid.
Yes. The break in coverage between one period of health coverage and
another can be no longer than 63 days (just over 2 months). If you are between
jobs and do not have health coverage for 63 days or more, then you may lose the
ability to use the coverage you had before the break to offset a preexisting
condition exclusion period in a new health plan.
No, not if you enroll when you are first eligible. Those 45 days do not
count as a significant break in coverage. Also, since you have more than 12
months of continuous coverage in a prior health plan, it can be used to fully
offset and eliminate the maximum preexisting condition exclusion period under a
new plan.
Possibly. Remember that under HIPAA, health coverage prior to a
significant break cannot be used to offset a preexisting condition exclusion
period. However, your state law may be more generous if you have coverage with
an insured plan. If your state lengthened the significant break from 63 days to,
for instance, 120 days, then you can use your prior coverage from a previous job
as creditable coverage. Check your plan’s summary plan description (SPD) to
see if your plan is insured. If it is, check with your state insurance
commissioner’s office at www.naic.org to see what your state law provides.
Suppose an employee had coverage for 2 years, followed by a break of 70
days. The employee then resumes coverage for 8 months before moving to a new
job, with no time off between jobs. He enrolls in the health plan at the new job
as soon as possible.
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.
There are several ways:
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If a spouse has coverage in a health plan that allows family members to
join, you may want to enroll. (See the FAQs on Special
Enrollment.)
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If your last coverage was in a group health plan, you may want to sign up
for COBRA continuation coverage. While you (and your family members, if they
were also part of your prior plan) will have to pay for this temporary coverage,
COBRA can prevent or reduce a break in coverage. (Learn more about COBRA.)
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You can buy an individual health insurance policy if you think you would
otherwise have a break of 63 days or more.
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Some states have high-risk pools for people who cannot otherwise get
health benefits. Your state insurance commissioner's office can tell you if such
a pool exists where you live.
Yes. You can look into:
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Electing COBRA coverage from your former employer’s plan;
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Buying an individual health insurance policy; or
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Checking with another plan you’re eligible for, such as a spouse’s
plan, to see if you can enroll.
Usually, the information is given in a certificate of creditable coverage. (Learn more about the certificate.)
A document that shows your prior periods of coverage in a health plan that's provided by your group health plan, HMO, or health insurance company:
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Before you lose your present
coverage: If you know you will leaving a job, you can request a
certificate, free of charge.
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After coverage ends: You
should receive a certificate automatically upon loss of coverage, even
if you are also eligible for COBRA continuation coverage. If you
don't get one, or if you need a new one, you can request a
certificate, free of charge, up to 24 months after prior coverage
ends.
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When COBRA coverage ends: You
should also automatically receive a certificate when COBRA
continuation coverage ends.
In addition to standard identification information, the certificate will
include the dates on which your prior health plan coverage began and ended. The
certificate also should have contact information so that old and new plans can
be in touch if necessary. Finally, there should be information about your HIPAA
rights.
The amount of time depends on whether you receive the certificate
automatically or upon request.
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The automatic certificate should reflect at least the most recent period
of continuous coverage.
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The certificate issued at your request or a dependent’s should reflect
at least each period of creditable coverage within the prior 24 months. The
certificate does not have to reflect more than 18 months of continuous health
coverage (the longest possible preexisting condition exclusion period) without a
significant break.
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If you’re eligible for COBRA, the certificate must be provided no later
than your COBRA election notice (generally 44 days after a qualifying event).
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For all other automatic certificates, generally you should receive it
within a reasonable amount of time after coverage ends.
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The plan should provide a requested certificate as early as possible.
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.
If your new plan imposes a preexisting condition exclusion, your claims
processing will go smoother if you don’t delay. There is an alternate way to
show that you had creditable coverage – you can present evidence of your prior
health coverage to your new health plan. Evidence can include:
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Pay stubs that reflect a deduction for health coverage premiums;
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Copies of premium payments or other documents showing evidence of
coverage;
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Explanation of benefit forms; and
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Verification by a doctor or your former health plan.
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.
Yes. A plan must make every reasonable effort to collect dependent
information and then issue certificates to dependents if they are also covered.
However, if an employee and a dependent have the same coverage, only one
certificate reflecting both individuals may be issued.
First, check it for accuracy. Does it reflect the amount of time you had
prior coverage? Does it include the contact information of the issuer in case
your old and new plans need to communicate? Is your personal data correct?
Second, either give it to your new employer (after you make a copy for yourself)
or file it away in a safe place.
Special enrollment allows individuals who previously declined health
coverage to enroll for coverage. Special enrollment rights arise
regardless of a plan's open enrollment period.
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.
Loss of eligibility for coverage may occur when:
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Divorce or legal separation results in you losing your spouse’s health
insurance;
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A young dependent, because of age, work, or school status, is no longer a
covered "dependent" under a parent’s plan;
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Your spouse’s death leaves you without coverage under his or her plan;
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Your spouse’s employment ends, as does coverage under his employer’s
health plan;
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Your employer reduces your work hours to the point where you are no longer
covered by the health plan;
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Your plan decides it will no longer offer coverage to a certain group of
individuals (for example, those who work part time);
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You no longer live or work in the HMO’s service area;
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You have a health claim that would meet or exceed the plan's lifetime
limit on all benefits.
These should give you some idea of the types of situations that may entitle
you to a special enrollment right.
The employee or dependent must request enrollment within 30 days after
losing eligibility for coverage or after a marriage, birth, adoption, or
placement for adoption.
It depends on what triggers your right to special enrollment. Those taking
advantage of special enrollment as a result of a birth, adoption, or placement
for adoption begin coverage no later than the day of the event.
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.
A preexisting condition exclusion cannot apply to a special enrollee for
longer than 12 months. As with those who signed up with the plan at the first
opportunity, a special enrollee can show creditable coverage and reduce or
eliminate the maximum preexisting condition exclusion period.
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.
A description of special enrollment rights should be included in the plan
materials you received when initially offered the opportunity to enroll.
Special enrollees must be offered the same benefits that would be
available if you are enrolling for the first time. Special enrollees cannot be
required to pay more for the same coverage and cannot have longer preexisting
condition exclusion periods.
Under HIPAA, you and your family members cannot be denied eligibility or
benefits based on certain "health factors" when enrolling in a health
plan. In addition, you may not be charged more than similarly situated
individuals based on any health factors. The questions and answers
below define the health factors and offer some examples of what is and is not
permitted under the law.
The health factors are:
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Health status;
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Medical conditions, including physical and mental illnesses;
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Claims experience;
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Receipt of health care;
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Medical history;
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Genetic information;
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Evidence of insurability (see below); and
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Disability.
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.)
No. You do not have to pass a physical exam to be eligible for enrollment.
This is true for individuals who enroll when first eligible, as well as for late
and special enrollees.
Yes, as long as it does not use individual health information to restrict
enrollment or charge you more.
No. In this case the plan used health information to exclude you from
enrolling in the plan. This practice is discriminatory, and it is prohibited.
No. A group health plan may not delay an individual's eligibility,
benefits, or effective date of coverage based on confinement to a hospital or
medical facility at the time he becomes eligible. Additionally, a health plan
may not increase that person's premium because he was in a hospital or medical
facility.
No. A group health plan generally may not deny benefits because someone is
not "actively at work" on the day he would otherwise become eligible.
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.
No. A group health plan may impose a preexisting condition exclusion
period, but it must be applied uniformly. In this case, the plan is not applying
its provisions uniformly, since it is treating differently those who had medical
claims during the first 6 months of coverage.
HIPAA states that plans may distinguish among employees only on “bona
fide employment-based classifications” consistent with the employer’s usual
business practice. For example, part-time and full-time employees, employees
working in different geographic locations, and employees with different dates of
hire or lengths of service can be treated as different groups of 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.
Yes. A group health plan may apply lifetime limits generally or for a
specific disease or treatment – provided the limits are applied uniformly to
similarly situated individuals and are not directed at specific employees or
dependents based on any health factors they may have.
No. Group health plans cannot charge an individual more for coverage than
a similarly situated individual based on any health factor.
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.
No. Participation in activities such as skiing would be "evidence of
insurability," which is a health factor. Therefore, it cannot be used to
deny eligibility.
Maybe. A plan can deny benefits based on an injury's source, unless an
injury is the result of a medical condition or an act of domestic violence.
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.
Yes. A plan can treat an individual with an adverse health factor (such as
a disability) more favorably by offering extended coverage.
Yes, as long as the health plan offers the reward based on participation
in the program and not on test results. For instance, a health plan might offer
a premium discount for those who voluntarily test for cholesterol. The discount
would be available to everyone who takes the test, not just those who get a
certain result.
For wellness programs where the plan offers a reward based on an
individual’s ability to meet a standard related to a health factor (such as a
standard related to smoking/nicotine addiction), the rules require that:
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The reward, such as a premium differential, must generally not exceed 20
percent of the cost of employee-only coverage under the plan. If the program
allows an employee’s dependents (such as spouses or children) to participate,
then the reward must not exceed 20 percent of the cost of the coverage in which
the employee and any dependents are enrolled;
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The program must be designed to promote good health or prevent disease;
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Individuals must have a chance to qualify for the nonsmoker’s premium
discount at least once a year;
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The program must accommodate those for whom it is unreasonably difficult
to quit using tobacco (for example, due to nicotine addiction) by providing a
reasonable alternative standard (such as a discount in return for attending
educational classes or for trying a nicotine patch); and
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Plan materials describing the wellness program must disclose the
availability of a reasonable alternative standard to qualify for the lower
premium.
Note: The wellness program rules are generally effective for plan years
starting on or after July 1, 2007.
State laws may complement HIPAA by allowing more protections than the Federal
law. However, these state laws only apply if your plan provides benefits through
an insurance company or HMO (an insured plan). To determine if your plan offers
insured coverage, consult your summary plan description (SPD) or contact your
plan administrator.
The list below summarizes those areas where state laws can complement HIPAA’s
preexisting condition and special enrollment provisions:
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States may reduce the number of months a plan can look back to determine a
preexisting condition. For instance, a state's law may have a look-back period
of 3 months instead of the 6 in the Federal law. The look-back period begins on
the day you enroll in a plan.
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States may decrease the number of months a new employee or dependent may
be subject to a preexisting condition exclusion period. For example, state laws
may limit the exclusion period to 6 months rather than 12. They may also reduce
the maximum 18-month exclusion period for late enrollees.
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States may increase the number of days that constitute a significant break
in coverage. For instance, instead of 63 days, a state may allow someone to have
a break of 120 days between periods of health coverage.
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States may increase the number of days (30 under Federal law) parents have
to enroll newborns, adopted children, and children placed for adoption without a
preexisting condition being excluded.
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Under Federal law, certain preexisting conditions cannot be excluded from
coverage (pregnancy; newborns, adopted children, and children placed for
adoption within 30 days; and genetic information in the absence of a diagnosis).
States may add to this list. For example, a state may add cancer, so that plans
cannot exclude it from coverage, even if you received treatment during the 6
months before enrolling in a new plan.
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States may require additional circumstances that entitle you to special
enrollment periods beyond those in the Federal law.
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States may reduce an HMO's affiliation period prior to enrollment (similar
to a group health plan’s waiting period) to fewer than 2 months (3 months for
late enrollees).
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.
COBRA is a law that can help if you lose your job or if your hours are
reduced to the point where the employer no longer provides you with health
coverage. COBRA can provide a temporary extension of your health coverage – as
long as you and your family members, if eligible, belonged to the previous
employer's health plan and generally the employer had 20 or more employees.
Usually, you pay the entire cost of coverage (both your share and the
employer's, plus a 2 percent administrative fee). As long as the prior plan
exists, COBRA coverage lasts up to 18 months for most people, although it can
continue as long as 36 months in some cases.
There are several ways to use COBRA in conjunction with HIPAA:
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COBRA coverage can help you avoid a significant break between periods of
health plan coverage. For example, if you expect to have a 6-month interruption
between jobs and health plans, you can purchase COBRA coverage during that time.
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COBRA coverage can be counted as creditable coverage
– as long as there
is no significant break after your COBRA coverage ends. Creditable coverage can
be used to offset any preexisting condition exclusion period you or a family
member might have.
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COBRA continuation coverage can be used as a bridge to ensure that you
remain covered during a waiting period or a preexisting condition exclusion
period.
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If you have COBRA and become covered under other group health plan
coverage that is not subject to a preexisting condition exclusion period, your
COBRA coverage can be cut off.
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Once you are no longer eligible for COBRA coverage, you will get a special
enrollment opportunity for any other coverage for which you are eligible.
However, if you voluntarily stop COBRA coverage or stop paying your COBRA
premiums, that will not trigger a special enrollment right based on loss of
eligibility for coverage.
HIPAA also protects those who are otherwise unable to get group health
insurance.
The law guarantees access to individual insurance policies and state
high-risk pools for eligible individuals. They must meet all of the following
criteria:
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Had coverage for at least 18 months, most recently in a group health plan,
without a significant break;
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Lost group coverage but not because of fraud or nonpayment of premiums;
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Are not eligible for COBRA coverage; or if COBRA coverage was offered
under Federal or state law, elected and exhausted it; and
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Are not eligible for coverage under another group health plan, Medicare,
or Medicaid; or have any other health insurance coverage.
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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