The Employee Benefits Security Administration
administers the following health care
laws that comprise Part 7 of the Employee Retirement Income Security Act
(ERISA).
The Health Insurance Portability and
Accountability Act (HIPAA) places limitations on a group
health plan's ability to impose pre-existing condition
exclusions, provides special enrollment rights for certain
individuals, and prohibits discrimination in group health
plans based on health status.
The Mental Health Parity Act (MHPA)
provides for parity in the application of annual and
lifetime dollar limits on mental health benefits with
annual and lifetime dollar limits on medical/surgical
benefits.
The Newborns' and Mothers' Health
Protection Act (Newborns' Act) requires group health plans
that offer maternity hospital benefits for mothers and
newborns to pay for at least a 48-hour hospital stay for
the mother and newborn following childbirth (or, in the
case of a cesarean section, a 96-hour hospital stay),
unless the attending provider, in consultation with the
mother, decides to discharge earlier.
The Women's Health and Cancer Rights
Act (WHCRA) provides protections for patients who elect
breast reconstruction or certain other follow-up care in
connection with a mastectomy.
Below are 10 key compliance considerations for group
health plans. Under each is an example of a group health
plan provision or practice that would not comply with the
above laws and a tip on how to bring the plan into compliance.
For more information on compliance with these laws, refer to Q&As: Recent Changes in Health Care Law.
Example: A
group health plan covers treatment for injuries in
connection with an accident only if the accident occurred
while the individual was covered under the plan.
Tip: This plan provision operates as a pre-existing
condition exclusion and should be removed or modified to
comply with HIPAA's limitations on pre-existing condition
exclusions.
This plan provision operates as a pre-existing condition
exclusion because only people who were injured while
covered under the plan receive benefits for treatment.
People who were injured while they had no coverage (or
while they had other coverage) do not receive benefits for
treatment. Accordingly, this plan provision limits
benefits relating to a condition because the condition was
present before an individual's enrollment
date, and it is
considered a pre-existing condition exclusion.
To comply with HIPAA, the plan could:
Delete its requirement that the accident must occur
while the individual is covered under the plan; or
Limit its pre-existing condition
exclusion. Among
other things, the only conditions that may be subject
to a pre-existing condition exclusion are those for
which medical advice, care, diagnosis, or treatment
was recommended or received within the 6 months ending
on an individual's enrollment
date in the plan. (Under HIPAA, an individual's
enrollment date is the first day of coverage or, if
there is a waiting period, the first day of the
waiting period.) In addition, the maximum pre-existing
condition exclusion period is 12 months (or 18 months
for late
enrollees) after the individual's enrollment date.
The exclusion period must be offset by an individual's
prior
creditable coverage. Also, newborns and adopted
children generally may not be subject to a
pre-existing condition exclusion at all.
Example: A group
health plan imposes a 30-day waiting period from an
individual's date of hire before coverage will become
effective. Then, after an individual has satisfied this
waiting period, the plan imposes a 12-month pre-existing
condition exclusion from the individual's effective date of
coverage (offset by creditable
coverage).
Tip: The pre-existing condition exclusion period is
required to begin on the first day of the waiting period.
HIPAA requires that the maximum pre-existing condition
exclusion period begin on an individual's enrollment
date. For plans that impose a waiting period, the
enrollment date is generally the first day of the waiting
period. (Under HIPAA, an individual's enrollment date is
the first day of coverage or, if there is a waiting
period, the first day of the waiting period.)
In this example, the plan must begin counting the
12-month pre-existing condition exclusion period from the
individual's enrollment date, which in this case is the
first day of the waiting period.
Example: A plan issues one certificate of creditable
coverage for a participant and the participant's family.
However, the certificate does not include information about
dependents or waiting periods.
Tip: If a plan imposes a waiting period, the date the
waiting period began is required to be reflected on the
certificate. In addition, if a certificate applies to more
than one person (such as a participant and dependents), the
dependents' creditable
coverage information is required to be reflected on the
certificate (or the plan can issue a separate certificate to
each dependent).
If a dependent's last known address is different from
the participant's last known address, a separate
certificate is required to be provided to the dependent at
the dependent's last known address.
Example: A group health plan allows
individuals to enroll through special enrollment for loss of
other coverage only if the loss was due to an involuntary
termination of employment.
Tip: The plan is required to permit
individuals who declined health coverage under the plan
because they had other group health plan or health insurance
coverage to enroll in the plan through special enrollment upon
any loss of eligibility for the other coverage or if employer
contributions toward the other coverage cease.
Under HIPAA, individuals who are
otherwise eligible, but had declined health coverage
because they had other group health plan or health
insurance coverage, must be permitted to enroll in the
plan (regardless of any late enrollment provisions) upon
loss of eligibility for the other coverage or if employer
contributions toward the other coverage cease.
Loss of eligibility includes loss of
coverage due to legal separation, divorce, voluntary or
involuntary termination of employment, reduction in hours,
children's aging out of coverage, or moving out of an HMO
service area. It does not include loss of coverage due to
a failure of the individual to pay premiums on a timely
basis or termination of coverage for cause.
Under HIPAA, special enrollment rights
are also triggered when employer contributions toward an
individual's other coverage cease, regardless of whether
the individual is still eligible for coverage under the
other plan.
Example: A group health plan allows
employees who are already enrolled for coverage to add
dependents upon marriage, birth, adoption and placement for
adoption. However, if an employee is not already enrolled, the
plan does not permit any enrollment when these events occur.
Tip: HIPAA allows eligible employees
and dependents to enroll upon marriage, birth, adoption or
placement for adoption.
Group health plans are required to
offer special enrollment to otherwise eligible employees,
spouses and any new dependents upon marriage, birth,
adoption or placement for adoption. Accordingly, an
employee who is otherwise eligible, but not enrolled for
coverage, can enroll (and can also enroll a spouse and any
new dependents, if they are otherwise eligible under the
plan) when any of these events occur.
The plan should amend its special
enrollment provisions to allow employees and dependents
who are otherwise eligible to enroll upon these events.
Example: After an individual enrolls
through special enrollment, a group health plan makes coverage
effective on the first day of the first calendar month
following the date a completed request for enrollment is
received.
Tip: HIPAA sets forth specific dates
when coverage is required to be made effective for special
enrollees. In this case, the plan is not making coverage
effective early enough for some individuals.
For special enrollment upon birth,
adoption or placement for adoption, group health plans are
required to make coverage effective as of the date of the
birth, adoption or placement for adoption. For these
events, this plan, in this example, is not making coverage
effective early enough. Therefore, the plan should change
the effective date of coverage provision to comply with
HIPAA.
On the other hand, for special
enrollment upon loss of eligibility for other coverage,
upon loss of employer contributions toward other coverage,
or upon marriage, coverage is required to be made
effective no later than the first day of the first
calendar month following the date a completed request for
enrollment is received. Therefore, the plan's effective
date of coverage provision is permissible with respect to
these special enrollment events.
Example: To be eligible for late
enrollment, a group health plan requires employees and
dependents to present evidence of insurability.
Tip: Plans cannot require
individuals (even if they are late enrollees) to present
evidence of insurability in order to enroll for coverage.
A group health plan may not deny
individuals enrollment in the plan (or delay the effective
date of an individual's coverage) based on an individual's
health status, medical condition (including both physical
and mental illnesses), claims experience, receipt of
health care, medical history, genetic
information, evidence of insurability (including
conditions arising out of acts of domestic violence) or
disability. Therefore, the plan must eliminate any
evidence of insurability requirement. (Nonetheless, the
plan is generally permitted to impose an 18-month
pre-existing condition exclusion period on late enrollees,
if it is offset by creditable coverage and complies with
HIPAA's other limitations on pre-existing condition
exclusion periods.)
Example: Outpatient benefits for
mental health services under a group health plan consist of 50
doctor visits per year with a $50 maximum payment per visit.
Outpatient benefits for medical/surgical services are
unlimited.
Tip: While the plan does not impose
an annual dollar limit on outpatient medical/surgical
benefits, the 50 doctor visit per year limitation on mental
health services, coupled with the absolute $50 maximum payment
per visit, is a constructive annual dollar limit on outpatient
mental health benefits of $2,500.
Under MHPA, a plan may not impose
annual or lifetime dollar limits on mental health benefits
that are lower than those for medical/surgical benefits.
Here, the plan is not in compliance with MHPA because,
with respect to outpatient services, the plan imposes a
$2,500 constructive annual dollar limit on mental health
benefits and no annual limit on medical/surgical benefits.
The plan should eliminate any
constructive dollar limit on mental health benefits that
is lower than that for medical/surgical benefits. The plan
can still impose visit limits under MHPA, provided they
are not coupled with absolute dollar limitations, which
would constitute a constructive dollar limit.
Example: For hospital stays,
including those in connection with childbirth, a group health
plan requires preauthorization from its utilization review
telephone hotline, based on a determination of medical
necessity.
Tip: The plan's preauthorization
requirement is too broad in that it applies to hospital stays
that are the subject of the Newborns' Act.
Under the Newborns' Act, the plan may
not restrict benefits for a hospital stay in connection
with childbirth to less than 48 hours (96 hours in the
case of a cesarean section), unless the attending provider
(in consultation with the mother) decides to discharge
earlier.
Plans may not require providers to
obtain authorization from the plan for prescribing the
stay. In addition, plans may not deny a stay within the
48-hour (or 96-hour) period because the plan's utilization
reviewer does not think such a stay is medically
necessary.
The plan must eliminate this
preauthorization requirement with respect to hospital
stays in connection with childbirth for the first 48 hours
(or 96 hours in the case of a cesarean section). The plan
may impose such an authorization requirement for hospital
stays beyond this period. In addition, the plan may impose
a requirement on the mother to give notice of a pregnancy
in order to obtain a certain level of cost-sharing or to
use certain medical facilities. However, the type of
preauthorization required by this plan (within the 48/96
hour period and based on medical necessity) must be
eliminated.
Example: A group health plan
provides benefits for mastectomies. However, the plan excludes
benefits for reconstructive surgery after a mastectomy.
Tip: Plans that cover benefits for
mastectomies cannot exclude benefits for reconstructive
surgery or certain other post-mastectomy services.
Under WHCRA, the plan is required to
provide (to an individual who is receiving benefits in
connection with a mastectomy and who elects breast
reconstruction in connection with the mastectomy) coverage
for:
All stages of reconstruction of the
breast on which the mastectomy has been performed
Surgery and reconstruction of the
other breast to produce a symmetrical appearance
Prostheses and physical
complications of mastectomy, including lymphedemas, in
a manner determined in consultation with the attending
physician and the patient
In addition, the plan is required to
notify participants of WHCRA's coverage requirements upon
enrollment and annually afterwards.
For a more detailed explanation of
WHCRA's disclosure requirements and for sample language
that may be used, see Questions
and Answers: Recent Changes in Health Care Law and
its supplement,
The Women's Health and Cancer Rights Act of 1998:
Questions and Answers; Annual Notice Requirements Update
Certificate of Creditable Coverage
-
A written certificate issued by a group health plan or health
insurance issuer that shows an individual’s creditable coverage (see
definition below) under the plan. A certificate must be issued
automatically and free of charge when an individual loses coverage under
a plan, when an individual is entitled to elect COBRA continuation
coverage, and when an individual loses COBRA continuation coverage. A
certificate must also be provided free of charge upon request while the
individual has health coverage or within 24 months after their coverage
ends. ERISA § 701(e) and 29 CFR 2590.701-5.
Creditable
Coverage -
Health coverage of an individual under: a group health
plan,
(including while on COBRA continuation coverage), health insurance
coverage, Medicare, Medicaid, a state health benefits risk pool, a
public health plan, and certain other health programs. ERISA § 701(c)
and 29 CFR 2590.701-4.
ERISA
(Employee Retirement
Income Security Act
of 1974) -
ERISA is a federal law that regulates employee benefit plans, such as
group health plans, that private sector employers, employee
organizations (such as unions), or both, offer to their workers and
families.
Enrollment
Date -
The first day of coverage or, if there is a waiting period, the first
day of the waiting period. For individuals who enroll when first
eligible, the enrollment date is often the first day of employment.
ERISA § 701(b)(2) and 29 CFR 2590.701-2.
Genetic
Information -
Information about genes, gene products and inherited characteristics
that may derive from the individual or a family member. This includes
information regarding carrier status and information derived from
laboratory tests that identify mutations in specific genes or
chromosomes, physical medical examinations, family histories and direct
analysis of genes or chromosomes. 29 CFR 2590.701-2.
Group
Health Plan -
An employee benefit plan established or maintained by an employer or
by an employee organization (such as a union), or both, to the extent
that the plan provides medical care to employees or their dependents
directly or through insurance, reimbursement or otherwise. ERISA §
733(a) and 29 CFR 2590.701-2.
Health Insurance
Issuer -
An insurance company, insurance service, or insurance organization,
(including a health maintenance organization), that is required to be
licensed to engage in the business of insurance in a State and that is
subject to State law that regulates insurance. ERISA § 733(b)(2) and 29
CFR 2590.701-2.
Late Enrollee -
An individual who enrolls in a group health plan on a date other than
on either the earliest date on which coverage can begin under the plan
terms or on a special enrollment date (see definition below). Under
HIPAA, a late enrollee may be subject to a maximum pre-existing
condition exclusion of up to 18 months. 29 CFR 2590.701-3(a)(iii) and
(iv).
Pre-Existing Condition Exclusion -
A limitation or exclusion of benefits for a condition based on the
fact that the condition was present before the first day of coverage. A
pre-existing condition exclusion may be applied to the condition only if
the requirements of ERISA section 701 and 29 CFR 2590.701-3 through
2590.701-5 are met.
Special
Enrollment -
Special enrollment allows certain individuals who are otherwise
eligible for coverage to enroll in the plan, regardless of the plans’s
regular enrollment dates. Special enrollment rights may be triggered
upon loss of eligibility for other coverage (including loss of employer
contributions toward other coverage), marriage, birth of a child,
adoption, and placement for adoption. ERISA § 701(f) and 29 CFR
2590.701-6.
Waiting Period -
The period that must pass before an employee or dependent is eligible
to become covered under the terms of a group health plan. If a employee
or dependent enrolls as a late enrollee or on a special enrollment date,
any period before the late or special enrollment is not a waiting
period. ERISA § 701(b)(4) and 29 CFR 2590.701-2.