HIPAA
- Health Insurance Portability
Developed by the U.S. Department of Labor
Pension and Welfare Benefits Administration
Revised September 1998
HIPAA-the
Health Insurance Portability and Account-
ability Act of 1996 - recently amended the Employee
Retirement Income Security Act to provide new rights
and protections for participants and beneficiaries in
group health plans. Understanding this amendment is
important to your decisions about future health cover-
age. 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").
If
you find a new job that offers health coverage, or if
you are eligible for coverage under a family member's
employment-based plan, HIPAA includes protections
for
coverage under group health plans that:
-
limit exclusions for preexisting conditions;
-
prohibit discrimination against employees and
dependents
based on their health status; and
-
allow a special opportunity to enroll in a new
plan to individuals in certain circumstances.
If
you choose to apply for an individual policy for
yourself or your family HIPAA includes protections for
individual policies that:
-
guarantee access to individual policies for
people who
qualify; and
-
guarantee renewability of individual policies.
Q
What is a "preexisting" condition?
A
A "preexisting condition" is a condition present
before
your enrollment date in any new group
health plan.
Under HIPAA, the only preexisting conditions that
may be excluded under a preexisting condition
exclusion are those for which medical advise,
diagnosis, care or treatment was recommended or
received within the 6-month period before your
enrollment date. (Your enrollment date is your first
day of coverage, or if there is a waiting period to
get into the plan, the first day of the waiting
period.)
If you had a medical condition in the past, but
have not received any medical advise, diagnosis,
care or
treatment within the 6 months prior to
your enrollment date in the plan, your old
condition is not a "preexisting condition" to
which an exclusion can
be applied. Moreover,
under HIPAA, preexisting condition exclusions
cannot be applied to pregnancy;
regardless of
whether the woman had previous health
coverage.
Finally, a preexisting condition exclusion cannot
be
applied to a newborn, adopted child or child
placed
for adoption as long as the child enrolls
for health
coverage within 30 days of the birth,
adoption or
placement for adoption and provided
that the child
does not incur a subsequent 63-
day break in
coverage.
Q
I have a preexisting condition that may be
excluded under HIPAA. How does my new
plan determine the length of my preexisting
condition exclusion period?
A
The maximum length of a preexisting condition
exclusion period is 12 months after your enrollment
date (18 months in the case of a "late enrollee"). A
late enrollee is an individual who enrolls in a plan
other than on the earliest date on which coverage
can become effective under the terms of the plan
and
other than on a "special enrollment date"
(see
below).
A plan must reduce an individual's preexisting
condition exclusion period by the number of days
of
an individual's "creditable coverage." Most
health
coverage is creditable coverage, such as
coverage
under a group health plan (including
COBRA
continuation coverage), HMO,
individual insurance
policy, Medicaid or
Medicare. However, a plan is not
required to take
into account any days of creditable
coverage that
precede a significant break in coverage (generally,
a break in coverage of 63 days or
more).
A plan generally receives information about an
individual's creditable coverage from a certificate
furnished by a prior plan or health insurance issuer
(e.g., an insurance company or HMO). You should
receive a certificate of creditable coverage
automatically when you lose coverage under your
old plan or
when you become entitled to COBRA
continuation
coverage and when your COBRA
continuation
coverage ceases. You also have a right
to receive a
certificate when you request one from
your previous
plan or issuer within 24 months of
when your coverage ceases (including before your
coverage
ceases).
Q
I received my certificate from my former
plan. what do I do now?
A
You should:
- ensure that the
information is accurate;
(Contact the plan administrator of your former
plan if any information is wrong.)
- keep the
certificate in case you need it; (You
will need the certificate if you enroll in a new
group health plan that applies a preexisting
condition exclusion period or if you purchase
an individual policy from an insurance
company.)
Q
what if I have trouble getting a certificate
from my former employer's group health
plan?
A
Under HIPAA, group health plans and health
insurance issuers are required to provide documen-
tation that certifies the creditable coverage you have
earned. Plans and issuers that fail or refuse to
provide such certificates are subject to penalties
under HIPAA.
However, if you have trouble obtaining a certificate,
your new group health plan is required to accept
other evidence of creditable coverage, if you have it.
It is important, therefore, to keep accurate records
(e.g., pay stubs, copies of premium payments or
other evidence of health care coverage) that can be
used to establish periods of creditable coverage in
the event a certification cannot be obtained.
Q
when I enroll in a new group health plan
that contains a preexisting condition exclu-
sion period) how does "crediting" for prior
coverage work under HIPAA?
A
Most plans will use what is known as the "standard
method" of crediting coverage. Under this method,
you will receive credit for your previous coverage
that occurred without a break in coverage of 63
days or more. Any coverage you had prior to a
break in coverage of 63 days or more may not be
credited against a preexisting condition period.
However, if your health coverage is offered through
an HMO or an insurance policy issued by an insur-
ance company, you should check with your State
Insurance Commissioner's office to find out if this
break in coverage period is longer in your state.
To illustrate: Suppose an individual had health
insurance 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.
HIPAA also permits an "alternative method" for
crediting coverage for all employees. Under the
alternative method of calculating creditable cover-
age, the plan or issuer separately determines the
amount of an individual's creditable coverage for
any of the five following categories of benefits:
mental health, substance abuse treatment, prescrip-
tion drugs, dental care and vision care. Your new
plan must notify you if it is using the alternative
method for any of these benefits.
Q
what are my new group health plan's obliga-
tions with respect to "special enrollment
opportunities"?
A
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.
A special enrollment opportunity occurs if an
individual with other health
insurance loses that
coverage. A special
enrollment opportunity also
occurs if a person has (or
becomes) a new
dependent through marriage, birth,
adoption or
placement for adoption. However, you must
notify the plan of your request for special
enrollment within 30 days after closing your
other coverage
or within 30 days of having
(or becoming) a new
dependent.
If you enroll
as a special enrollee, you may not be
treated as a late enrollee
for purposes of any pre-
existing condition exclusion
period. Therefore, the
maximum preexisting condition
exclusion period
that may be applied is 12
months, reduced by your
creditable coverage (rather
than 18 months,
reduced by creditable coverage)
Q
Can I be denied coverage or charged more for
coverage by my new group health plan based
on my health status?
A
No. First, group health plans and health insurance
issuers may not establish rules for eligibility (in-
cluding continued eligibility) of any individual to
enroll under the terms of the plan based on "health
status related factors." These factors include:
health status, medical condition (physical or
mental), claims experience, receipt of health care,
medical history; genetic information, evidence of
insurability and disability However, plans may
establish limits or restrictions on benefits or
coverage for all similarly situated individuals.
Second,
plans generally may not require an indi-
vidual to pay a premium
or contribution that is
greater than that for a
similarly situated individual
based on a health
status related factor.
Q
What if l am unable to obtain new group
health plan coverage?
A
You may be able to purchase an individual insur-
ance policy HIPAA guarantees access to
individual
policies to "eligible individuals."
Eligible
individuals
are those who:
-
have had coverage for at least 18 months
where the
most recent period of coverage
was under a
group
health plan;
-
did not have their group coverage terminated
because
of fraud or nonpayment of
premiums;
-
are ineligible for COBRA continuation
coverage or
have exhausted their COBRA
benefits (or
continuation
coverage under a
similar state
provision);
and
-
are not eligible for coverage under another
group
health plan, Medicare or Medicaid or
have
any other health insurance coverage.
The chance to buy an individual policy is the
same, whether you are laid off, fired or quit your
job.
However, the type of coverage you are
guaranteed
may differ across states. Therefore,
it is important
to check with your State
Insurance Commissioner's
Office if you are
interested in obtaining individual
insurance
coverage. The Utah number would be
801-538-3826 or
1-800-439-3805.
In addition, children in families who do not have
health coverage due to a temporary reduction in
income (for instance, due to job loss) may be
eligible
for the Children's Health Insurance
Program (CHIP). CHIP is a new federal/state
partnership
that is helping to provide children
with health
coverage.
States
have flexibility in administering programs
under CHIP State
agencies may choose to expand
their Medicaid
programs, design new child health
insurance programs or
create a combination of
both. To find out more
about this program in
Utah go to
http://www.health.state.ut.us/chip/.