Frequently Asked Questions about Portability of Health Coverage and HIPAA
What is the Health Insurance Portability and Accountability Act of 1996 (HIPAA)?
HIPAA amended the Employee Retirement Income Security Act (ERISA), 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 coverage. 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
- 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
- Guarantee renewability of individual policies
What is creditable coverage?
Most health coverage is creditable coverage, such as coverage under a group health plan (including COBRA continuation coverage), HMO, individual health insurance policy, Medicaid or Medicare.
Creditable coverage does not include coverage consisting solely of excepted benefits, such as coverage solely for limited-scope dental or vision benefits.
Days in a waiting period during which you have no other coverage are not creditable coverage under the plan, nor are these days taken into account when determining a significant break in coverage (generally a break of 63 days or more). This 63-day break period may be extended under state law if your coverage is insured through an insurance company or offered through an HMO. Check with your State Insurance Commissioner's Office to see whether a longer break period applies to you.
How does crediting for prior coverage work under HIPAA?
Most plans use the standard method of crediting coverage.
Under the standard method, you receive credit for your previous coverage that occurred without a break in coverage of 63 days or more. Any coverage occurring prior to a break in coverage of 63 days or more is not credited against a preexisting condition exclusion period.
To illustrate, suppose an individual had 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.
What can I do if I don't have enough creditable coverage to offset a preexisting condition exclusion period?
During any preexisting condition exclusion period under a new plan you may be entitled to COBRA continuation coverage under your former plan. You may also try to purchase an individual health insurance policy.
What is a preexisting condition?
A preexisting condition is a medical 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.
In addition, a preexisting condition exclusion cannot be applied to a newborn, adopted child under age 18, or a child under age 18 placed for adoption as long as the child became covered under 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.
Finally, genetic information may not be treated as a preexisting condition in the absence of a diagnosis. If your coverage is through an insurance company or offered through an HMO, state law may provide additional protections.
For more information go to the U. S. Department of Labor website at www.dol.gov Health Plans and Benefits.