The Health Insurance Portability and Accountability
Act of 1996, known as HIPAA, affects the way state and
federal governments regulate health care benefits for
groups and individuals. If you have individual health
coverage - or plan to apply for individual coverage
in the future - you may have questions about HIPAA and
how it affects your situation. These frequently asked
questions and answers may help.
What is HIPAA?
HIPAA is a federal law that includes important provisions
for people who are self-employed, who move from one
job to another, or who have pre-existing medical conditions.
It places certain requirements on health plans, on insurance
companies and the plans they offer.
Who is affected by HIPAA?
HIPAA regulations affect anyone enrolled in an employer
group-sponsored health plan, and people transitioning
from a group plan to individual health coverage. HIPAA
does not apply when people who already have individual
coverage wish to enroll in a different individual plan.
What does HIPAA do?
HIPAA offers several advantages, because it:
1. Mandates better access to health plan coverage for
people who change or lose their jobs;
2. Limits exclusions for pre-existing conditions;
3. Prohibits discrimination against employees and dependents
based on their health status;
4. Guarantees renewability and availability of health
coverage to certain employees and individuals.
How does HIPAA help people who lose their employer
group health coverage and need individual health coverage?
HIPAA requires individual health plan issuers to offer
individual plans that cover a person's pre-existing
conditions - as long as the person has been insured
for 18 months without a significant break in coverage,
the most recent coverage was through the employer group
health plan, and all available COBRA or state continuation
benefits have been exhausted. The opportunity to purchase
that individual coverage is the same - whether the person
is laid off, fired, or resigns from a job.
As an example:
Suppose you already have 12 months of continuous group
health coverage. But you lose your job and become eligible
for COBRA continuation benefits. You need to exhaust
your COBRA continuation coverage before you can request
individual health coverage that provides immediate benefits
for any pre-existing condition.
In this example, as long as certain requirements are
met, the new insurer must give you "credit"
for the length of time you were continuously covered
under your group health plan, plus the COBRA continuation
period, before you enrolled in an individual plan.
What is COBRA?
COBRA is the name of a federal law that gives workers
and their families the opportunity to extend their employer-sponsored
group health coverage for a limited amount of time if
they lose their group coverage for certain reasons.
Generally, you can receive COBRA continuation benefits
for 18,29, or 36 months if you lose coverage because
of specific events, such as termination of employment,
divorce or death. Companies with 20 or more employees
(other than government or church plans) must generally
offer continued coverage under COBRA.
What if I don't qualify for COBRA or other
continuation coverage?
You can purchase individual health plan coverage. But
to enroll in a plan that provides immediate benefits
for pre-existing conditions,you must first show that
you had creditable health coverage for at least 18 months
- without a break or lapse in coverage of 63 days or
more.
What is creditable coverage?
If you're moving to an individual plan,
creditable coverage refers to the length of time you
were covered under a health plan. That coverage can
include a workplace health plan, COBRA, a federal government
plan (including TRICARE, CHAMPUS or CHAMPVA), church
plan coverage, a Tennessee Rural Health plan, or a short-term
plan.The most recent creditable coverage must be an
employer-sponsored group health plan.
Does all previous health coverage count as
creditable?
No, not all. To be considered creditable, your previous
health coverage:
1. Must have been in place for an aggregate of at least
18 months (with exceptions for some dependent children);
2. Must not have been canceled for fraud or nonpayment
of premiums;
3. Must not have had more than a 63-day gap between
coverages or between the date the other coverage(s)
ended and the date you apply for individual coverage.
Additionally:
4. You must not be eligible for Medicare A or B, Medicaid,TennCare,
or other group coverage, including COBRA;
5. Your latest coverage must have been from an employer-sponsored
group plan; and
that previous coverage must no longer be available to
you.
Does the 18-month rule apply to all dependent
children?
In most cases, yes. But there are some exceptions. Dependent
children who do not have the required 18 months of creditable
coverage can still qualify for a waiver of the pre-existing
condition waiting period, as long as they:
Enrolled in a previous creditable plan within 31 days
of the date they became eligible for that group coverage;
and were considered a newborn, newly adopted child or
child placed for adoption at the time they enrolled
for the coverage.
Can different family members have different
pre-existing exclusion periods?
Yes.The amount of creditable coverage for each person
in a family is individually verified. One family member
with creditable coverage may have no exclusion period
for pre-existing conditions. Other family members who
do not have creditable coverage may be subject to medical
underwriting terms and a standard exclusion period of
12 months. When this happens, members of the same family
may be enrolled in different health plans. The plans
may have the same benefits, but medical underwriting
and exclusion periods may apply to certain family members.
Rates for each plan may differ as well, and your costs
may be higher for a plan that accepts your creditable
coverage and provides immediate benefits for pre-existing
conditions.
Even though I have creditable coverage, can
I enroll in a less expensive individual plan and waive
my rights under HIPAA?
Yes. If you choose to enroll in a lower cost plan, you
can waive your right to a guarantee issue HIPAA plan
for you and each member of your family. In that case,
medical underwriting terms and any waiting periods for
pre-existing condition coverage will apply.
What if I have trouble getting coverage documentation
from my former employer?
Under HIPAA, insurers and health plans are required
to provide you with documents that certify any creditable
coverage you have earned. If they fail or refuse to
provide the certification, they may be subject to financial
penalties under HIPAA. Regulations also require a process
that lets you show you are entitled to creditable coverage
if you cannot obtain certification from a past employer
or health plan. It is important that you keep accurate
records (pay stubs, copies of premium payments or other
evidence of health care coverage) that can be used to
establish periods of creditable coverage in case certification
cannot be obtained.Your new health plan or carrier can
also help you get your certificate of creditable coverage
from your prior carrier.
If I lose my job, am I guaranteed the same
benefits under the new plan?
No. When you transfer from one plan to another, the
benefits you receive will be those provided under the
new plan. The new coverage could provide greater or
lesser benefits than a previous health plan.
Can I lose my new coverage if my health status
changes or I have too many claims?
No. If your previous coverage counts as creditable and
meets HIPAA requirements, individual health plans and
insurers cannot establish enrollment eligibility based
on your health status, medical condition (physical or
mental), claims experience, receipt of health care,
medical history, genetic information, evidence of insurability
or disability. For example, you cannot be excluded or
dropped from plan coverage just because you have a particular
illness. However, your coverage may be canceled for
the following reasons:
1. Nonpayment of premiums
2. Fraud or misrepresentation
3. Termination of the entire plan through which you
are enrolled
4. Change of residence outside the approved service
area
5. Change in the company's membership standing
Can I be charged more than someone else with
the same coverage and health conditions?
No.Though a health insurer may establish limits or restrictions
on benefits or coverage for similarly situated individuals
under a plan, it may not require an individual to pay
a premium or contribution that is greater than that
of a similarly situated individual, based on health
status.
Does HIPAA require a health insurer to provide
special benefits?
No. HIPAA does not require specific benefits or prohibit
an insurer from restricting the amount or nature of
benefits for similarly situated individuals.
