Health Insurance Portability and Accountability Act Group Plans (HIPAA): Self-Help Guide
By: Source: AARP.org Date Posted: 2004-03-25 10:21:39
(National Edition)
You have probably heard a lot in the last few years about a new law called the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA limits the time a group health plan can stop you from getting coverage because of a "preexisting condition" exclusion. There are different rules under HIPAA depending on whether you have group coverage or individual coverage. Generally, you get group health insurance coverage through your employer or union. This Guide will only discuss the rules for group plans, and will explain the important provisions of HIPAA to you.
Am I eligible for HIPAA?
Your eligibility to enroll in a group health plan is determined by the rules of the group health plan and the contract terms of any insurance purchased by an insured plan.
Your eligibility to have HIPAA guarantee you the right to purchase individual health insurance coverage (which, in some states, will be through a high-risk pool) depends on your ability to meet ALL of the following requirements:
- You have at least 18 months of creditable coverage without a significant break in coverage – a period of 63 or more days during all of which you had no coverage. If you get coverage by midnight of the 63rd day, you have not incurred a significant break;
- Your most recent coverage must have been through a group health plan (through your or a family member's employer or union);
- You are not eligible for coverage under any other group health plan;
- You are not eligible for Medicare or Medicaid;
- You do not have other health insurance;
- You did not lose your insurance for not paying the premiums or for committing fraud; and
- You accepted and used up your COBRA continuation coverage or similar state coverage if it was offered to you.
If you meet these requirements, then you become a HIPAA eligible individual.
If HIPAA does apply to your group health plan, then generally it:
- Limits the length of pre-existing condition exclusions that can keep you and your dependents from getting full coverage;
- Generally prohibits the health plan from denying coverage, or charging higher rates based on your or your dependents' current health or health history; and
- May give you a special enrollment period for enrolling in the group health plan when you lose other coverage if you chose not to join the health plan when you were first eligible, or when you have a new dependent.
Is my health insurance "portable"?
"Portability" under HIPAA means that once you have health coverage, this coverage may be used to reduce or eliminate any preexisting condition exclusion that might be applied to you under a future plan or policy. The concept of portability really means that you are receiving credit for maintaining health coverage, even though it may be under different health plans or policies.
What is a "preexisting condition exclusion"?
A "preexisting condition exclusion" is an exclusion of health benefits based on the fact that a physical or mental condition was present before the first day of health coverage. HIPAA limits the time a group health plan can apply a preexisting condition exclusion. The preexisting condition exclusion period must be reduced by any prior "creditable coverage" you may have.
Please note that if you are a HIPAA eligible individual in the individual market, no pre-existing condition exclusion can be applied to your coverage.
What is "creditable coverage"?
The purpose of creditable coverage is to give you credit for previous health coverage when moving from one group health plan to another, from a group health plan to an individual policy, or from an individual policy to a group health plan. You will receive credit against the application of a preexisting condition exclusion period for your previous coverage that occurred without a break of 63 days or more. Any coverage occurring prior to a break in coverage of 63 days or more would not have to be credited against a preexisting condition exclusion period. (Some states' laws may provide greater protections.) For example, say Jane Doe had health coverage for two years followed by a break in coverage for 70 days, and then resumed coverage for eight months. She would receive credit against any preexisting condition exclusion only for eight months of coverage; no credit would have to be given for the two years of coverage prior to the break of 63 days or more. Most health coverage is creditable coverage, including health insurance coverage (either group or individual), Medicare, Medicaid, and military health coverage. To show that you had creditable coverage, you should receive a certificate from your current plan or issuer when your coverage stops, such as when you change jobs. This certificate contains information that will show creditable coverage. You can ask for a certificate from your plan or issuer at any time, free of charge. You should request a certificate ahead of time if you know you will be changing jobs.
Does my employer have to offer health coverage?
No, employers are not required to offer or pay for health insurance for employees or family coverage for their spouses and dependents.
Will I get the same health insurance plan in my new job as I had in my old job?
Not necessarily. HIPAA does not require plans to offer specific benefits. If you transfer from one plan to another, the benefits you get will be the benefits provided under the new plan. Coverage under the new plan could be better or worse than what you had under the old plan. Premiums, co-payments, and deductibles may also be different. HIPAA does not apply to plan premiums except that group health plans cannot charge you more than someone else in the same plan based on your health status. State law regulates insurance premiums.
What if I have COBRA continuation coverage?
There is another law called the Consolidated Omnibus Budget Reconciliation Act (COBRA). Under COBRA, you have the right to continue your health coverage for a period of time (generally, 18, 29 or 36 months) when you leave a job, as long as you pay the premiums. COBRA continuation coverage generally can be terminated when an individual becomes covered under another group health plan. COBRA cannot be terminated because of other coverage where the new plan limits or excludes coverage for any preexisting condition of the individual. If a plan is not permitted under HIPAA to impose an exclusion period on an individual (i.e., it must cover the individual's preexisting condition), COBRA continuation coverage may be terminated.
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Note: While we strive to keep this legal information up to date, the law is constantly changing, and we do not guarantee the accuracy of any information contained herein. If you should find any inaccuracies, errors or omissions in this document, please e-mail suggested changes to lsn@aarp.org.
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