Overview

To understand if and how HIPAA may help you, there are five steps you should take. These steps generally mean you need to:

1. Understand the different types of health insurance and group health plan coverage that are affected by HIPAA;
2. Evaluate the impact of a preexisting condition exclusion that you have which may trigger the need for HIPAA's limited protections;
3. Determine how much - if any - creditable coverage you have;
4. Understand the other HIPAA coverage protections you have; and
5. Know where to go for more information if you have questions.

Step 1: Understand the Various Types of Health Coverage

Before you can understand how HIPAA may help protect your health coverage, you must understand what the various types of health coverage are. This is important because the law provides different protections depending on the type of health coverage you have or wish to apply for.

Types of Coverage

HIPAA generally applies to the following three types of coverage:

1. Group Health Plans. A group health plan is health coverage sponsored by an employer or union for a group of employees, and possibly for dependents and retirees as well. To understand your rights, you will need to know the following things about your group health plan.
   • Does a State or local governmental employer sponsor the plan?
   • Does a church or group of churches sponsor the plan?
   • Does the plan cover fewer than two current employees?
   • Does a small employer or a large employer sponsor the plan?
   • Is the plan an insured plan that purchases health insurance coverage from an HMO or other health insurance issuer, or is it a self-insured plan?
2. Individual Health Insurance. Individual health insurance coverage is insurance coverage that is sold by HMOs or other health insurance issuers to individuals who are not part of a group health plan. Even though health coverage might be provided through an association or other group, such as groups of college students or self-employed individuals, it is still considered to be "individual" health insurance if it is not provided through a group health plan.
3. Comparable Coverage through a High-Risk Pool. Some States have set up high-risk pools to provide health coverage for people who cannot otherwise obtain health insurance coverage in the individual market.

Eligibility for HIPAA Protections

If you are not currently covered by a particular type of plan or insurance, you need to determine what you may be eligible for.

1. 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.
2. 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.

Once you know what kind of health care coverage you have, or would like to apply for, you can begin to understand how HIPAA may protect you and your family.

When You Get a New Job

If you find a new job that offers a group health plan, or, if you are eligible under another family member's group health plan, you first need to determine whether HIPAA applies to the group health plan. For example, if the job is with a church, or with a State or local governmental employer, or with a very small employer, HIPAA protections may be more limited. Ask your new employer or your State Insurance Department for information about HIPAA.

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.

When You Leave a Job or Otherwise Lose Group Health Plan Coverage

If you are a HIPAA eligible individual, and you apply for individual health coverage within 63 days after losing group health plan coverage, HIPAA:

• Guarantees that you will have a choice of at least two coverage options;
• Guarantees that you will be eligible, regardless of any medical conditions you may have, to purchase some type of individual coverage, whether from a health insurance issuer, high-risk pool, or other source designated by your State; and
• Guarantees that you will not be subject to any pre-existing condition exclusions.

HIPAA does NOT limit the amount you can be charged for the policy. However, State law may set limits. Also, if your coverage is through a network plan, HIPAA does not guarantee that your policy will be renewed if you move outside the area served by providers under contract with your insurer. In addition, if your coverage is through a high-risk pool, and you move out of the State, HIPAA does not guarantee that your coverage will be renewed.

Step 2: Determine The Impact of Any Pre-existing Condition

Traditionally, many employer-sponsored group health plans and health insurance issuers in both the group and individual markets limited or denied coverage of health conditions that an individual had prior to the person's enrollment in the plan. These types of exclusions are known as pre-existing condition exclusions.

Although such exclusions were problematic for those trying to secure health coverage in the past, HIPAA and other recent federal laws bring some relief to this problem in certain situations. To best understand the protections provided by the law, you need to remember two things. First, HIPAA establishes requirements and limits under which a pre-existing condition exclusion can apply. Second, if you have a pre-existing condition, HIPAA helps minimize the impact of that exclusion on your access to health coverage.

Please note: if you are a HIPAA eligible individual in the individual market, no pre-existing condition exclusion can be applied to your coverage.

Limits for Pre-Existing Condition Exclusions in the Group Market

Even if your family member had a medical condition in the past, it is possible that the group health plan cannot use it as the basis for a pre-existing condition exclusion. HIPAA limits pre-existing condition exclusions to those medical conditions for which medical advice, diagnosis, care or treatment was recommended or received within the 6-month period before your enrollment date - your first day of coverage or, if there is a waiting period, the first day of your waiting period. This is typically your date of hire. This 6-month period is often called "look-back"period. Some State laws shorten this look-back period if your group health plan is an insured plan.

Minimizing the Impact of Exclusions

In many instances, HIPAA can reduce the impact of a pre-existing condition exclusion. HIPAA does this in two principal ways. First, the law limits the time over which an exclusion can keep you from getting coverage; and second, HIPAA generally allows your previous health insurance coverage to reduce the amount of time the exclusion can apply, or, in some cases, can totally eliminate such exclusions. In addition, no pre-existing condition exclusion is permitted for newborn and adopted children, who are enrolled within 30 days, or for pregnancy.

The Exclusion Period Begins

The exclusion period must begin on your enrollment date. It can generally last no longer than 12 months. If you do not enroll when you are first eligible and do not enroll when you have special enrollment rights, the plan can refuse to cover pre-existing conditions for up to 18 months after you enter the plan.

Notice Requirements

Before a pre-existing condition exclusion can be applied to your coverage, the plan's consumer materials must tell you if the plan imposes pre-existing condition exclusions. Your group health plan must send you a written notice that an exclusion will be imposed on you. The notice should describe the length of the exclusion period because you do not have enough creditable coverage. The notice also should describe how you can demonstrate how much creditable coverage you have.

Step 3: Determine If You Can Minimize the Length of the Exclusion

Once you understand that you have a pre-existing condition that is subject to an exclusion, it is important to remember that your previous health insurance coverage might reduce or eliminate the length of the pre-existing condition exclusion.

Under HIPAA's group market rules, creditable coverage can be used to reduce or eliminate pre-existing condition exclusions that might be applied to you under a future plan or policy. In general, if you had other health coverage - for example, under another group health plan or under an individual health insurance policy, Medicare, Medicaid, an HMO, or a State high-risk pool - your new plan's pre-existing condition exclusion period must be reduced by the period of your other coverage. This earned credit for previous coverage that can help you reduce your exclusion period is called creditable coverage.

The exclusion period must be shortened by one day for each day of creditable coverage that you have. If the amount of creditable coverage you have is equal to or longer than the exclusion period, no exclusion period can be imposed on you. When figuring out how much creditable coverage you have, however, you receive no credit for previous coverage that has been followed by a significant break in coverage - a period of 63 or more full days in a row during which you had no creditable coverage.

Two examples help illustrate these points.

• Case 1: If you were covered by your old employer's plan for 4 months and your new employer's plan has a 12-month pre-existing condition exclusion, your new employer's plan cannot exclude coverage for you for any pre-existing condition for more than 8 months.
• Case 2: John was covered under his employer's group health plan from January 1, 1998 until March 1, 1999, a period of 14 months. He then dropped that coverage. When he resumed coverage under his employer's plan on July 1, 1999, he had incurred a break of 122 days. From July 1, to August 1 of 1999, John had only 31 days of creditable coverage. His earlier coverage (from January 1, 1998 until March 1, 1999) was followed by a significant break in coverage. As a result, the earlier coverage is not counted as creditable coverage.

Know Your State's Law on Coverage
If you are in an insured plan, your State law may let you have a longer break in coverage. If so, you may be able to count creditable coverage even if it is followed by a break of 63 days or more in a row. Your State also may require a shorter exclusion period, or shorter look-back period. State law requirements for pre-existing condition exclusions do not affect those imposed by self-insured plans. For more information contact your State insurance department.

Group health plans and health insurance issuers are required to furnish you a certificate of creditable coverage. The certificate describes how much creditable coverage you have and the date the coverage ended. Most group health plans and insurance issuers are required to issue certificates automatically shortly after your coverage ends. You also can request a certificate describing particular coverage at any time while the coverage is in effect and within 24 months of the time the coverage ends. Finally, your new health plan can simply call your old plan to inquire about your creditable coverage. If the two plans agree, the plans can exchange the information by telephone.

When you receive a certificate from a former employer, you should make sure the information is accurate. Contact the plan administrator of your former health plan or the health insurance issuer if any of the information is wrong.

If you do not receive a certificate from your previous plan or health insurance issuer, your new health plan must accept other documentation that shows you had prior creditable coverage.

Step 4: Understand Your Other Coverage Protections

Understanding how you can best protect your health coverage is not easy. It is complicated because the rules are different depending on your special situation. The fourth step in understanding HIPAA and your protections under the law involves knowing some general information about:

• Special enrollment rights to other group coverage;
• How your health status can affect your access to care;
• Other coverage choices that may help you take advantage of HIPAA protections; and
• Your rights to renew group and individual coverage.

Special Enrollment Rights to Other Group Coverage

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. Importantly, individuals will be able to enroll without having to wait until the plan's next open enrollment period, but in most situations you must request a special enrollment within 30 days.

A special enrollment period can occur if a person with other health coverage loses that coverage or if a person becomes a new dependent through marriage, birth, adoption or placement for adoption. Special enrollment is NOT late enrollment, which can trigger an 18-month pre-existing condition exclusion period.

How Your Health Status Can Affect Access to Care

If you are in a group health plan, you cannot be denied coverage based on your health status. A group health plan cannot refuse to enroll you just because of:

• Your health status;
• Physical or mental condition;
• Claims experience;
• Receipt of health care;
• Medical history;
• Genetic information;
• Evidence of insurability; or
• Disability.

But employers can establish limits or restrictions on benefits or coverage for similarly situated individuals under a group health plan, or charge a higher premium or contribution for similarly situated individuals. In addition, employers may change your plan benefits or covered services if they give you proper notification.

If you are no longer in a group health plan, and you meet the requirements to be a HIPAA eligible individual, you cannot be denied individual health coverage. However, the choices available to you will depend on the approach your State has taken to make health coverage available to you.

If you are not an eligible individual, State law rather than HIPAA will determine whether you can be denied coverage. Depending on your State's laws, insurers and HMOs offering individual health insurance may be able to deny coverage based on your health status. Federal laws other than HIPAA and some State laws may ensure that certain people who have lost group coverage are guaranteed access to health coverage, at least temporarily, regardless of their health status.

Other Coverage Choices That May Help You Take Advantage of HIPAA Protections

Some key HIPAA protections help you avoid pre-existing condition exclusions on your access to coverage. One federal law that may help you take advantage of those and other HIPAA protections is the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

COBRA continuation coverage gives employees and their dependents who leave an employer's group health plan the opportunity to purchase and maintain the same group health coverage for a period of time (generally, 18, 29 or 36 months) under certain conditions. Workers in companies with 20 or more employees generally qualify for COBRA. You may have this right if you lose your job or have your working hours reduced. You also may have this right if you are covered under your spouse's plan and your spouse dies or you get divorced. Children who are born, adopted, or placed for adoption with the covered employee while he or she is on COBRA also will be entitled to coverage.

Some State laws require issuers to provide similar protections for employers with fewer than 20 employees. If you work in a small business, check with your State insurance department to see if your State has such a law.

COBRA May Help When You Change Jobs

If you are between jobs, COBRA continuation coverage or similar State-mandated continuation coverage can help you avoid a significant break in coverage. That, in turn, may allow you to maximize your creditable coverage that can be used to shorten or eliminate your pre-existing condition exclusion period under a new plan.

If you are going to a new job immediately, your new employer might impose a waiting period before you can start getting benefits under the health plan. While days spent in the waiting period will not be counted as a break in coverage, you still will not have health coverage during the waiting period unless you can obtain it from another source. For many people, COBRA may be that source. Taking COBRA from your old plan until coverage under your new plan starts can provide you with continued health coverage.

When you lose eligibility for coverage under one group health plan, you also may be able to special enroll into another group health plan, such as a spouse's plan, under which you originally declined coverage because you already had coverage under your plan. You may want to do this as a temporary measure during a waiting period imposed by an employer plan or as a permanent change. If both COBRA continuation coverage and special enrollment under another plan are available to you, you have two opportunities to request special enrollment:

• When you lose coverage under your old plan; and
• If you elect to take COBRA continuation coverage, when you have exhausted your COBRA coverage.

If you elect COBRA coverage when you lose group health coverage, you will have to exhaust the COBRA coverage before you will be entitled to special enrollment into the other plan. You may need to carefully evaluate whether it is more to your advantage to special enroll into the other plan immediately or to first take COBRA continuation coverage from your old plan.

COBRA as a Bridge into the Individual Market

In addition to helping you avoid a significant break in coverage when you are between jobs or helping you maintain coverage while you are in a waiting period, COBRA can help you - if you want - to buy individual health insurance, which is not connected to a job. Normally, your decision to buy COBRA coverage - if available to you - is voluntary. However, if you want to protect your right to coverage in the individual market as a HIPAA eligible individual, you must take and exhaust COBRA or similar State continuation coverage that is offered to you.

Exhausting COBRA

Sometimes there may be a clear advantage to paying insurance premiums for the entire period until COBRA continuation coverage is no longer available to you. (This is called "exhausting" your COBRA coverage.) Continuation coverage is creditable coverage for HIPAA purposes. If you accept continuation coverage, it could help you avoid a significant break in coverage. In turn, that could reduce or eliminate a pre-existing condition exclusion if you later have access to another group health plan. If you reach the end of your COBRA coverage without having access to another group health plan, exhausting COBRA will help you qualify for portability into the individual market as an eligible individual.

There are certain situations in which you may lose COBRA coverage earlier than the end of the usual period. Two examples help illustrate the point.

• Example 1: Your coverage is under a network plan, such as an HMO, you move out of the plan's service area, and there are no other options for continuing COBRA benefits. In this first example, your COBRA continuation coverage is considered to be exhausted.
• Example 2: Your former employer is permitted to terminate continuation coverage in certain situations when you become covered under another group health plan. However, if you have a pre-existing condition, the former employer cannot terminate your COBRA continuation coverage if the new group health plan limits or excludes coverage for your pre-existing condition.

Consider Conversion Options Carefully

If you accept conversion coverage, at the end of coverage under a group health plan or at the end of COBRA or similar State continuation coverage, you might give up some HIPAA protections. These include the ability to qualify as a HIPAA eligible individual. To retain that guarantee, your most recent coverage must have been group health plan coverage.

For HIPAA purposes, conversion coverage is NOT group coverage. Therefore, you can lose your rights as a HIPAA eligible individual if you choose conversion coverage.

Your Rights To Renew Group and Individual Coverage

HIPAA generally gives you the right to renew your group and individual health insurance. But that right varies considerably between group and individual plans based on certain events.

When the group health plan buys a group insurance policy, coverage generally must be renewed for as long as the employer wants it to be. If your group health plan buys an individual policy for you, it generally must be renewed so long as you want to do so.

Your group coverage is NOT guaranteed to be renewable, however, if the group health plan has:

• Failed to pay premiums for the coverage;
• Committed fraud against the issuer providing the coverage;
• Violated participation or contribution rules that apply to the coverage;
• Terminated the coverage;
• Ended membership in an association (if the coverage is available only to members of the association); or
• If the coverage is a network plan (such as an HMO), the issuer also may terminate or refuse to renew the coverage if all members of the group move outside of the plan's service area.

If you have individual health insurance, generally, your coverage is renewable regardless of whether you are a HIPAA eligible individual. Your coverage may be discontinued or non-renewed by your insurance company, only if you:

• Fail to pay your premiums;
• Commit fraud against the issuer;
• Terminate the policy;
• Move outside the service area (if in a network plan);
• Move outside a State (if in a State high-risk pool); or
• End your membership in an association (if the coverage is available only to members of the association).

Step 5: Know where to go for more information if you have questions

HIPAA has a number of special rules and its own set of complex terms to describe the limited federal protections that it may offer you. This on-line information covers only basic points about HIPAA. If you want to know more, please contact HIPAA