|FAQs About Portability Of Health Coverage And HIPAA|
|Thursday, 17 November 2011 14:17|
What is the Health Insurance Portability and Accountability Act of 1996 (HIPAA)?
HIPAA's is a federal law that:
HIPAA is complemented by state laws that, while similar to HIPAA, may offer more generous protections. You may want to contact your state insurance commissioner's office to ask about the law where you live. A good place to start is the Web site of the National Association of Insurance Commissioners at www.naic.org.
One of the most important protections under HIPAA is that it helps those with preexisting conditions get health coverage. In the past, some employers' group health plans limited, or even denied, coverage if a new employee had such a condition before enrolling in the plan. Under HIPAA, that is not allowed. If the plan generally provides coverage but denies benefits to you because you had a condition before your coverage began, then HIPAA applies.
Under HIPAA, a plan is allowed to look back only 6 months for a condition that was present before the start of coverage in a group health plan. Specifically, the law says that a preexisting condition exclusion can be imposed on a condition only if medical advice, diagnosis, care, or treatment was recommended or received during the 6 months prior to your enrollment date in the plan. As an example, you may have had arthritis for many years before you came to your current job. If you did not have medical advice, diagnosis, care, or treatment – recommended or received – in the 6 months before you enrolled in the plan, then the prior condition cannot be subject to a preexisting condition exclusion. If you did receive medical advice, diagnosis, care, or treatment within the past 6 months, then the plan may impose a preexisting condition exclusion for that condition (arthritis). In addition, HIPAA prohibits plans from applying a preexisting condition exclusion to pregnancy, genetic information, and certain children.
If you have a preexisting condition that can be excluded from your plan coverage, then there is a limit to the preexisting condition exclusion period that can be applied. HIPAA limits the preexisting condition exclusion period for most people to 12 months (18 months if you enroll late), although some plans may have a shorter time period or none at all. In addition, some people with a history of prior health coverage will be able to reduce the exclusion period even further using “creditable coverage.” Remember, a preexisting condition exclusion relates only to benefits for your (and your family’s) preexisting conditions. If you enroll, you will receive coverage for the plan’s other benefits during that time.
Although HIPAA adds protections and makes it easier to switch jobs without fear of losing health coverage for a preexisting condition, the law has limitations. For instance, HIPAA:
Can a plan deny benefits for chronic illnesses or injuries, like carpal tunnel syndrome, diabetes, heart disease, and cancer using a preexisting condition exclusion?
It depends on whether you received medical advice, care, diagnosis, or treatment within the 6 months prior to enrolling in a new employer’s plan. If you did, you can be subject to a preexisting condition exclusion.
Are there illnesses or injuries that cannot be subject to a preexisting condition exclusion?
Yes, as follows:
I just changed jobs. Seven months ago, I received my last treatment for carpal tunnel syndrome. Can my new employer’s plan apply a preexisting condition exclusion?
No. If your last treatment was more than 6 months before enrollment in your new employer's health plan and you have had no other advice or care relating to your carpal tunnel syndrome in the last 6 months, your condition cannot be subject to a preexisting condition exclusion.
My new employer has a waiting period before any new hire can enroll in the group health plan. How does this relate to a preexisting condition exclusion period?
An employer's health plan may indeed have a waiting period before any employee and his/her dependent family members can enroll. If that is the case, the plan booklet (called a summary plan description (SPD)) will say so.
If a plan has a general waiting period and a preexisting condition exclusion period, both time periods must run concurrently. For example, an employer may impose a 3-month waiting period for all employees to begin health coverage. Some employees may also be subject to the maximum preexisting condition exclusion period of 12 months. In this example, the maximum preexisting condition exclusion period remaining is 9 months long.
Be aware that your plan may not have a preexisting condition exclusion period, so be sure you know your new company's policy when you enroll.
What happens if I don't enroll in my employer's health plan at the first chance?
If, for some reason, you did not enroll in your new employer's health plan at the first opportunity but do so at a later time, you are a late enrollee. For example, assume an employee declines coverage in his employer’s health plan when he starts his new job. This employee decides to enroll 2 years later during an open enrollment period. At the time the employee wishes to enroll, there is no special enrollment opportunity (the right to enroll regardless of regular enrollment dates, see the Special Enrollment section for when this right arises). When the employee elects coverage, he is a late enrollee.
Being a late enrollee will not cause you to lose HIPAA’s protections. One immediate consequence, however, is that the maximum preexisting condition exclusion period is 18 months, rather than the 12 months for those who enroll at the first chance.
Are all family members, including a spouse, covered by HIPAA?
If your group health plan permits coverage of family members ("dependents"), and if they participate in the plan, then they will have the same HIPAA protections as employees, described above.
Are there protections on discrimination in pricing if I have a preexisting condition?
Yes, see the Nondiscrimination FAQs section.
Can I reduce or eliminate the maximum preexisting condition exclusion period?
Yes, if you can show "creditable coverage." Most health coverage can be used as creditable coverage, including participation in a group health plan, COBRA continuation coverage, Medicare and Medicaid, as well as coverage through an individual health insurance policy. However, you should try to avoid a significant break in coverage (63 days) if you want to be able to count your previous coverage. If you have a break shorter than 63 days, coverage you had before that break is creditable coverage and can be used to offset a preexisting condition exclusion period. Days spent in a waiting period for coverage cannot be used as credit. But, they also are not counted toward the significant break (63 days) you are trying to avoid.
Is there a limit to the period of time I can go without coverage between jobs if I want to reduce the length of a preexisting condition exclusion?
Yes. The break in coverage between one period of health coverage and another can be no longer than 63 days (just over 2 months). If you are between jobs and do not have health coverage for 63 days or more, then you may lose the ability to use the coverage you had before the break to offset a preexisting condition exclusion period in a new health plan.
I began working for a new employer 45 days after my prior group health plan was terminated. I had continuous coverage in my former employer's plan for 24 months with no other coverage between jobs. Can I be subject to a preexisting condition exclusion period?
No, not if you enroll when you are first eligible. Those 45 days do not count as a significant break in coverage. Also, since you have more than 12 months of continuous coverage in a prior health plan, it can be used to fully offset and eliminate the maximum preexisting condition exclusion period under a new plan.
I have a preexisting condition. I began employment at my current job 100 days after I resigned from my previous job. I had continual coverage in my previous employer's health plan for 36 months but none between jobs. Can I be excluded from coverage?
Possibly. Remember that under HIPAA, health coverage prior to a significant break cannot be used to offset a preexisting condition exclusion period. However, your state law may be more generous if you have coverage with an insured plan. If your state lengthened the significant break from 63 days to, for instance, 120 days, then you can use your prior coverage from a previous job as creditable coverage. Check your plan’s summary plan description (SPD) to see if your plan is insured. If it is, check with your state insurance commissioner’s office at www.naic.org to see what your state law provides.
How do I calculate the length of a preexisting condition exclusion in a new employer’s health plan?
Suppose an employee had coverage for 2 years, followed by a break of 70 days. The employee then resumes coverage for 8 months before moving to a new job, with no time off between jobs. He enrolls in the health plan at the new job as soon as possible.
A preexisting condition exclusion can last 12 months at most, if the person enrolls when first eligible. This employee has 8 months of creditable coverage. His earlier 2 years of health coverage are not creditable because he had a break in coverage that was more than the 63 days allowed under the law. His preexisting condition exclusion will last 4 months after he enrolls in the employer's health plan.
If the same employee had a break in coverage of only 60 days, his story would be different. This would not be a significant break and he could use the earlier 2 years of coverage to completely offset the preexisting condition exclusion period.
How do I avoid a 63-day significant break in health coverage?
There are several ways:
Is there anything I can do if I have a preexisting condition and the credit I received from my last health plan does not cover my new employer's preexisting condition exclusion period?
Yes. You can look into:
How do I prove my creditable coverage?
Usually, the information is given in a certificate of creditable coverage. (Learn more about the certificate.)
What is the certificate of creditable coverage?
A document that shows your prior periods of coverage in a health plan that's provided by your group health plan, HMO, or health insurance company:
What information will be on the certificate?
In addition to standard identification information, the certificate will include the dates on which your prior health plan coverage began and ended. The certificate also should have contact information so that old and new plans can be in touch if necessary. Finally, there should be information about your HIPAA rights.
What amount of time should a certificate cover?
The amount of time depends on whether you receive the certificate automatically or upon request.
When must my employer provide the certificate?
Also, be aware that health plans must issue certificates, even if they do not exclude coverage for preexisting conditions. While an employee may not need a certificate in a current job, she might if a future employer’s plan has a preexisting condition exclusion.
What steps should I take if I didn't get a certificate or I lose it? How can I show that I had prior coverage?
If your new plan imposes a preexisting condition exclusion, your claims processing will go smoother if you don’t delay. There is an alternate way to show that you had creditable coverage – you can present evidence of your prior health coverage to your new health plan. Evidence can include:
In addition to providing these documents, an individual may be asked to attest to the period of creditable coverage and cooperate with the new plan’s reasonable efforts to verify creditable coverage.
You should still get in touch with the plan's administrator to request a certificate for your records. The administrator’s contact information is usually included in the plan brochure you received when you signed up for health coverage.
Are health plans required to issue certificates of creditable coverage to dependents?
Yes. A plan must make every reasonable effort to collect dependent information and then issue certificates to dependents if they are also covered. However, if an employee and a dependent have the same coverage, only one certificate reflecting both individuals may be issued.
What are the next steps after I get my certificate?
First, check it for accuracy. Does it reflect the amount of time you had prior coverage? Does it include the contact information of the issuer in case your old and new plans need to communicate? Is your personal data correct? Second, either give it to your new employer (after you make a copy for yourself) or file it away in a safe place.
What is a special enrollment opportunity?
Special enrollment allows individuals who previously declined health coverage to enroll for coverage. Special enrollment rights arise regardless of a plan's open enrollment period.
There are two types of special enrollment - upon loss of eligibility for other coverage and upon certain life events. Under the first, employees and dependents who decline coverage due to other health coverage and then lose eligibility or lose employer contributions have special enrollment rights. For instance, an employee turns down health benefits for herself and her family because the family already has coverage through her spouse's plan. Coverage under the spouse's plan ceases. That employee then can request enrollment in her own company's plan for herself and her dependents.
Under the second, employees, spouses, and new dependents are permitted to special enroll because of marriage, birth, adoption, or placement for adoption.
For both types, the employee must request enrollment within 30 days of the loss of coverage or life event triggering the special enrollment.
What are some examples of events that can trigger a loss of eligibility for coverage?
Loss of eligibility for coverage may occur when:
These should give you some idea of the types of situations that may entitle you to a special enrollment right.
How long do I have to request special enrollment?
The employee or dependent must request enrollment within 30 days after losing eligibility for coverage or after a marriage, birth, adoption, or placement for adoption.
After I request special enrollment, how long will I wait for coverage?
It depends on what triggers your right to special enrollment. Those taking advantage of special enrollment as a result of a birth, adoption, or placement for adoption begin coverage no later than the day of the event.
For special enrollment due to marriage or loss of eligibility for other coverage, your new coverage will begin on the first day of the first month after the plan receives the enrollment request. If the plan receives the request on January 3, for example, coverage would begin on February 1.
What happens if a special enrollee has a preexisting condition?
A preexisting condition exclusion cannot apply to a special enrollee for longer than 12 months. As with those who signed up with the plan at the first opportunity, a special enrollee can show creditable coverage and reduce or eliminate the maximum preexisting condition exclusion period.
A newborn, an adopted child, or a child placed for adoption cannot have a preexisting condition exclusion, as long as the child is enrolled in health coverage within 30 days of the event, without a subsequent significant break in coverage.
Where do I find out more about special enrollment in my plan?
A description of special enrollment rights should be included in the plan materials you received when initially offered the opportunity to enroll.
What coverage will I get when I take advantage of a special enrollment opportunity?
Special enrollees must be offered the same benefits that would be available if you are enrolling for the first time. Special enrollees cannot be required to pay more for the same coverage and cannot have longer preexisting condition exclusion periods.
What are HIPAA's protections from discrimination?
Under HIPAA, you and your family members cannot be denied eligibility or benefits based on certain "health factors" when enrolling in a health plan. In addition, you may not be charged more than similarly situated individuals based on any health factors. The questions and answers below define the health factors and offer some examples of what is and is not permitted under the law.
What are the health factors under HIPAA?
The health factors are:
Conditions arising from acts of domestic violence as well as participation in activities like motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, and skiing are considered “evidence of insurability.” Therefore, a plan cannot use them to deny you enrollment or charge you more for coverage. (However, benefit exclusions known as source of injury exclusions could affect your benefits.)
Can a group health plan require me to pass a physical examination before I am eligible to enroll?
No. You do not have to pass a physical exam to be eligible for enrollment. This is true for individuals who enroll when first eligible, as well as for late and special enrollees.
Can my plan require me to take a physical exam or fill out a health care questionnaire in order to enroll?
Yes, as long as it does not use individual health information to restrict enrollment or charge you more.
My group health plan required me to complete a detailed health history questionnaire and then subtracted “health points” for prior or current health conditions. To enroll in the plan, an employee had to score 70 out of 100 total points. I scored only 50 and was denied a chance to enroll. Can the plan do this?
No. In this case the plan used health information to exclude you from enrolling in the plan. This practice is discriminatory, and it is prohibited.
My group health plan booklet states that if a dependent is confined to a hospital or other medical facility at the time he is eligible to enroll in the plan, that person's eligibility is postponed until he is discharged. Is this permitted?
No. A group health plan may not delay an individual's eligibility, benefits, or effective date of coverage based on confinement to a hospital or medical facility at the time he becomes eligible. Additionally, a health plan may not increase that person's premium because he was in a hospital or medical facility.
My group health plan has a 90-day waiting period before allowing employees to enroll. If an individual is in the office on the 91st day, health coverage begins then. However, if an individual is not "actively at work" on that day, the plan states that coverage is delayed until the first day that person is actually at work. I missed work on the 91st day due to illness. Can I be excluded from coverage?
No. A group health plan generally may not deny benefits because someone is not "actively at work" on the day he would otherwise become eligible.
However, a plan may require employees to begin work before health plan coverage is effective. A plan may also require an individual to work full time (say, 250 hours per quarter or 30 hours per week) in order to be eligible for coverage.
My group health plan imposes a 12-month preexisting condition exclusion period. After the first 6 months, however, it is waived for individuals who have not had any claims since enrollment. Is this practice allowed?
No. A group health plan may impose a preexisting condition exclusion period, but it must be applied uniformly. In this case, the plan is not applying its provisions uniformly, since it is treating differently those who had medical claims during the first 6 months of coverage.
How do you determine "similarly situated individuals"?
HIPAA states that plans may distinguish among employees only on “bona fide employment-based classifications” consistent with the employer’s usual business practice. For example, part-time and full-time employees, employees working in different geographic locations, and employees with different dates of hire or lengths of service can be treated as different groups of similarly situated individuals.
A plan may draw a distinction between employees and their dependents. Plans can also make distinctions between beneficiaries themselves if the distinction is not based on a health factor. For example, a plan can distinguish between spouses and dependent children, or between dependent children based on their age or student status.
My health plan has a $500,000 lifetime limit on all of the benefits covered in the plan. In addition, there is a $2,000 lifetime limit on all benefits provided for one of my health conditions. Can a plan set these kinds of restrictions?
Yes. A group health plan may apply lifetime limits generally or for a specific disease or treatment – provided the limits are applied uniformly to similarly situated individuals and are not directed at specific employees or dependents based on any health factors they may have.
I have a history of high claims. Can I be charged more than others in the plan based on my claims experience?
No. Group health plans cannot charge an individual more for coverage than a similarly situated individual based on any health factor.
However, be aware that HIPAA does allow an insurer to charge one group health plan (or employer) a higher rate than it does another. When an insurance company establishes its rates, it may underwrite all covered individuals in a specific plan based on their collective health status. The result can be that one employer health plan whose enrollees have more adverse health factors can be charged a higher premium than another for the same amount of coverage.
Think of it this way: HIPAA’s protections from discrimination apply within a group of similarly situated individuals, not across different groups of similarly situated individuals. For example, an employer distinguishes between full-time and part-time employees. It can charge part-time employees more for coverage, but all full-time employees must pay the same rate, regardless of health status.
Also, take note that, for insured plans, state law may require the use of other methods for setting rates for health coverage. More information is available at www.naic.org.
I am an avid skier. Can my employer's plan exclude me from enrollment because I ski?
No. Participation in activities such as skiing would be "evidence of insurability," which is a health factor. Therefore, it cannot be used to deny eligibility.
Maybe. A plan can deny benefits based on an injury's source, unless an injury is the result of a medical condition or an act of domestic violence.
Therefore, a plan cannot exclude coverage for self-inflicted wounds, including those resulting from attempted suicide, if they are otherwise covered by the plan and result from a medical condition (such as depression).
However, a plan may exclude coverage for injuries that do not result from a medical condition or from domestic violence. For example, a plan generally can exclude coverage for injuries in connection with an activity like bungee jumping. While the bungee jumper may have to pay for treatment for those injuries, her plan cannot exclude her from coverage for the plan’s other benefits.
My group health plan says that dependents are generally eligible for coverage only until they reach age 25. However, this age restriction does not apply to disabled dependents, who seem to be covered past age 25. Does HIPAA permit a policy favoring disabled dependents?
Yes. A plan can treat an individual with an adverse health factor (such as a disability) more favorably by offering extended coverage.
HIPAA And Wellness Programs
I belong to a group health plan that rewards individuals who volunteer to be tested for early detection of health problems, such as high cholesterol. Can a plan do this?
Yes, as long as the health plan offers the reward based on participation in the program and not on test results. For instance, a health plan might offer a premium discount for those who voluntarily test for cholesterol. The discount would be available to everyone who takes the test, not just those who get a certain result.
Can a plan charge a lower premium for nonsmokers than it does for smokers?
For wellness programs where the plan offers a reward based on an individual’s ability to meet a standard related to a health factor (such as a standard related to smoking/nicotine addiction), the rules require that:
Note: The wellness program rules are generally effective for plan years starting on or after July 1, 2007.
How does HIPAA impact state laws?
State laws may complement HIPAA by allowing more protections than the Federal law. However, these state laws only apply if your plan provides benefits through an insurance company or HMO (an insured plan). To determine if your plan offers insured coverage, consult your summary plan description (SPD) or contact your plan administrator.
The list below summarizes those areas where state laws can complement HIPAA’s preexisting condition and special enrollment provisions:
In other areas of HIPAA, such as protections from discrimination, state laws may also supplement HIPAA’s protections if the coverage is through an insured plan. Check your SPD to see if your plan is insured and visit your state insurance commissioner's office or the National Association of Insurance Commissioners’ Web site at www.naic.org for more information.
How can COBRA be used to extend your health coverage?
COBRA is a law that can help if you lose your job or if your hours are reduced to the point where the employer no longer provides you with health coverage. COBRA can provide a temporary extension of your health coverage – as long as you and your family members, if eligible, belonged to the previous employer's health plan and generally the employer had 20 or more employees. Usually, you pay the entire cost of coverage (both your share and the employer's, plus a 2 percent administrative fee). As long as the prior plan exists, COBRA coverage lasts up to 18 months for most people, although it can continue as long as 36 months in some cases.
There are several ways to use COBRA in conjunction with HIPAA:
How does HIPAA apply when changing from group health coverage to an individual insurance policy?
HIPAA also protects those who are otherwise unable to get group health insurance.
The law guarantees access to individual insurance policies and state high-risk pools for eligible individuals. They must meet all of the following criteria:
The opportunity to buy an individual policy is the same whether a person quits a job, was fired, or was laid off.
ADDITIONAL INFORMATION AND LINKS CAN BE FOUND ON THE US DEPARTMENT OF LABOR WEBSITE
|Last Updated on Thursday, 17 November 2011 14:22|