Frequently Asked Questions about
Portability of Health Coverage and HIPAA

(Federal Regulations on Pre-existing Condition Denials)

What is HIPAA (portability of health coverage)?

The Health Insurance Portability and Accountability Act of 1996 (HIPAA), 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 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

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.

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.

Yes.  A plan or issuer may elect the alternative method for crediting coverage for all employees.

Under the alternative method of counting creditable coverage, the plan or issuer determines the amount of an individual's creditable coverage for any of the five specified categories of benefits.  Those categories are mental health, substance abuse treatment, prescription drugs, dental care and vision care.  The standard method is used to determine an individual's creditable coverage for benefits that are not within any of the five categories that a plan or issuer may use.  (The plan or issuer may use some or all of these categories.)

When using the alternative method, the plan or issuer looks to see is an individual has coverage within a category of benefits (regardless of the specific level of benefits provided within that category).

For example, if an individual who is a regular enrollee (not a late enrollee) has 12 months of creditable coverage, but coverage for only 6 of those months provided benefits for dental care, a preexisting condition exclusion period may be imposed with respect to that individual's dental care benefits for up to 6 months (irrespective of the level of dental care benefits).

Yes.  Under HIPAA any period of time that you are receiving COBRA continuation coverage is counted as previous health coverage as long as the coverage occurred without a break in coverage of 63 days or more.

It depends.  Your break in coverage of 100 days is a significant break in coverage under federal law, so under federal law you will not be able to count the 36 months of previous coverage as creditable coverage.

Group health plans and health insurance issuers are required to furnish a certificate of coverage to an individual to provide documentation of the individual's prior creditable coverage.  A certificate of creditable coverage:

Must be provided automatically by the plan or issuer when an individual either loses coverage under the plan or becomes entitled to elect COBRA continuation coverage and when an individual's COBRA continuation coverage ceases

 

Must also be provided, if requested, before the individual loses coverage or within 24 months of losing coverage

 

May be provided through the use of the model certificate

Under HIPAA, an employee's former group health plan and any insurance company or HMO providing such coverage is required to provide the employee with a statement of prior health coverage, commonly referred to as a certificate of creditable coverage.

This certificate must be provided automatically to you when you lose coverage under the plan or otherwise become entitled to elect COBRA continuation coverage as well as when COBRA continuation coverage ceases.

If you do not receive a certificate by the time you should have received it or by the time you need it, your first step should be to contact the plan administrator of the plan responsible for providing the certificate and request one.  If any part of your creditable coverage was through an insurance company, you can also contact the insurance company for a certificate that reflects that part of your creditable coverage as long as you make the request within 24 months of your coverage ceasing under the insurance policy.  Group health plans and insurers that fail or refuse to provide such certificates are subject to penalties under HIPAA.

Plans and issuers must furnish the certificate automatically to:

An individual who is entitled to elect COBRA continuation coverage, at a time no later than when a notice is required to be provided for a qualifying event under COBRA.

 

An individual who loses coverage under a group health plan and who is not entitled to elect COBRA continuation coverage, within a reasonable time after coverage ceases.

 

An individual who has elected COBRA continuation coverage, either within a reasonable time after the plan learns that COBRA continuation coverage ceased or, if applicable, within a reasonable time after the individual's grace period for the payment of COBRA premiums ends.

Yes.  A plan or issuer must make reasonable efforts to collect the necessary information for dependents and issue the dependent a certificate of creditable coverage.  If the coverage information for a dependent is the same for the employee, one certificate with both the employee and dependent information can be provided.

It depends on whether the certificate is issued automatically or upon request:

For a certificate that is issued automatically, the certificate should reflect the most recent period of continuous coverage.

 

For a certificate that is issued upon request, the certificate should reflect each period of continuous coverage ending within 24 months prior to the date of the request.

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.

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.

A plan must reduce an individual's preexisting condition exclusion period by the number of days of an individual's creditable coverage.  However, a plan is not required to take into account any days of creditable coverage that precede a break in coverage of 63 days or more (significant break in coverage).

Under HIPAA, the only preexisting conditions that may be excluded under a preexisting condition exclusion are those for which medical advice, diagnosis, care or treatment was recommended or received within the 6-month period ending on your enrollment date.  Your enrollment date is your first day of coverage, or if there is a waiting period, the first day of your waiting period (typically, your date of hire).

If you had a medical condition in the past, but have not received any medical advice, diagnosis, care or treatment for it 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.

Many plans do not exclude coverage for preexisting conditions.  A plan must tell you if it has a preexisting condition exclusion period (and can only exclude coverage for a preexisting condition after you have been notified).  The plan must also notify you of your right to show that you have prior creditable coverage to reduce the preexisting condition exclusion period.

If the plan does apply a preexisting condition exclusion period, the plan must make a determination regarding your creditable coverage and the length of any preexisting condition exclusion period that applies to you.  Generally, within a reasonable time after you provide a certificate or other information relating to creditable coverage, a plan is required to make this determination.

You are required to be notified of this determination if, after considering all evidence of creditable coverage, the plan will still impose a preexisting condition exclusion period with respect to any preexisting condition you may have.  The notice must also tell you the  basis of the determination, including the source and substance of any information on which the plan relied and any appeal procedure that is available to you.

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.

Group health plans and health insurance issuers are required to provide special enrollment periods during which individuals who previously declined coverage for themselves and their dependents may be allowed to enroll (without having to wait until the plan's next open enrollment period).

A special enrollment opportunity occurs if an individual with other health insurance loses that coverage or if a person 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 losing your other coverage or within 30 days of having (or becoming) a new dependent.

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).

Group health plans and health insurance issuers may not establish rules for eligibility (including 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

 

Disability

You may be able to purchase an individual insurance policy.  HIPAA guarantees access to individual policies to eligible individuals.  Eligible individuals:

Have had coverage for a least 18 months without a significant break in coverage 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 if offered COBRA continuation coverage (or continuation coverage under a similar state program), have both elected and exhausted their continuation coverage

Date of original certificate:

 

Name of group health plan providing the coverage:

Name of participant:

 

Identification number of participant:

 

Name of individual to whom this information applies:

The following information applies to the coverage in the certificate

 

that was provided to the individual identified above:

 

Mental Health:

 

Substance Abuse Treatment:

 

Prescription Drugs

 

Dental Care

 

Vision Care

For each category above, enter N/A if the individual had no coverage within the category or either:

Enter both the date that the individual's coverage within the category began and the date that the individual's coverage within the category ended (or indicate if continuing)

 

Enter same on the line if the beginning and ending dates for coverage within the category are the same as the beginning and ending dates for the coverage in the certificate.