| If you're worried about keeping your health benefits when you
change jobs, you should know about a federal law called HIPAA. It's
the Kennedy-Kassebaum Act, also known as the Health Insurance Portability
and Accountability Act of 1996, or HIPAA for short. While HIPAA
offers only little protection if you're switching from a group health
plan to an individual health plan, and even less if you don't have
insurance at all, it can help you from losing benefits you already
have when you move from one group plan to another. The law was
designed to ease what was then a growing problem known as "job
lock" — the reluctance to move from one company to another
for fear of losing health benefits.
Your Rights Under HIPAA
| Pre-Existing Conditions A pre-existing condition is generally considered a physical or mental
condition for which medical advice, diagnosis, care, or treatment
was recommended or received within the six-month period prior
to your enrollment date.
You might be surprised, however, to learn that it can also
be considered a problem that you were aware of but never
sought treatment for.
And worse, under some definitions, notes the Arizona Department
of Insurance, a medical problem can be considered pre-existing
even if you didn't know you had the problem before
you bought your health plan. |
HIPAA says that group health plans cannot deny your application
for coverage based solely on your health status. It also gives workers
who change or lose jobs better access to health insurance; limits
exclusions for pre-existing conditions; and guarantees renewability
and availability of health coverage to certain employees and individuals.
In addition, HIPAA says you can't be denied coverage because
of mental illness, genetic information, disability, or the claims
you've filed in the past.
Group health plans also cannot consider pregnancy a pre-existing
condition and can't exclude coverage for prenatal care or your
baby's delivery. However, there is no federal law that requires
health plans to actually provide maternity coverage. Some
states, though, do mandate such coverage. Thus, this HIPAA provision
only applies to health plans that offer maternity coverage.
HIPAA's rules apply to every employer group health plan that
has at least two participants who are current employees, including
companies that are self-insured. States have the option of applying
the group rules to "groups" of one, which some have opted to do
— a big bonus for the self-employed. Some states also have
enacted their own laws protecting health care consumers, and in
many cases they afford more rights than federal law.
Unfortunately, there is one huge exception to HIPAA: It provides
no protection if you switch from one individual health plan to
another individual plan. That's what makes buying individual plans
especially difficult for people who have chronic medical problems
— the insurers can simply turn them away time after time.
The Ifs, Ands, or Buts of HIPAA
In an effort to balance the interests of consumers and the interests
of insurers, HIPAA also contains plenty of other exceptions, conditions,
and loopholes that limit your rights. Thus, it's important to
understand them under HIPAA before you change health plans.
The first thing to understand are some fundamental tenets of
the American health care system. Employers are not required by
any state or federal law to offer or pay for health insurance
for employees. And unless mandated by state law, employers are
not told to offer specific types of benefits, such as mental health
or maternity coverage. Further, just because HIPAA grants you
insurance "portability" does not mean that you'll have the same
benefits, premiums, co-payments, or deductibles when you move
from one health plan to another.
Your health coverage can also be canceled if you or your employer
fail to pay the premiums, commit fraud, violate health plan rules,
or move outside of your insurer's service area. HIPAA also does
not eliminate the common practice of requiring a waiting period,
generally one to three months, before you become eligible to join
a new group health plan when you switch jobs. (Note, however,
that waiting periods do not count as a lapse in health
coverage, and thus would not penalize you under HIPAA.)
HIPAA requirements also do not apply to certain types of benefit
plans known as "excepted benefits." Those benefits are:
- Coverage only for accident (including accidental death or
dismemberment) or disability income insurance
- Liability insurance
- Supplements to liability insurance
- Workers compensation or similar insurance
- Automobile medical payment insurance (known as "medpay")
- Credit-only insurance (for example, mortgage insurance)
- Coverage for on-site medical clinics.
Coverage When You're Already Sick
The driving force behind HIPAA is that health insurance companies
have traditionally tried to hold down their costs by invoking
a "pre-existing condition" clause — refusing to cover a condition
you had before you bought the health plan.
The concept of pre-existing conditions makes sense when you're
talking about auto insurance: For example, if your windshield
was cracked before you bought your coverage, you can't
expect your new auto insurer to replace it after you buy
a policy. That would be like asking your insurer to replace the
windshield for free when you haven't paid premiums for that problem.
But when it comes to someone's health, the issue might seem less
clear-cut or even downright unfair.
Got diabetes? Your current health plan might pay for insulin
and visits to the doctor. But before HIPAA was enacted, if you
switched to a new health plan, it would have been allowed to consider
your diabetes a pre-existing condition and refuse to cover treatment
for it. You'd then be stuck paying for all of your diabetes treatment
yourself, on top of the regular out-of-pocket expenses you'd pay
for other medical care. The frightening prospect of having to
pay hundreds or thousands of dollars for your medical care is
what created job lock and helped fuel the push for legislation
banning such practices.
HIPAA imposes limits on the extent to which some health plans
can exclude coverage for pre-existing conditions. For instance,
if you've had "creditable" health insurance for 12 straight months,
with no lapse in coverage of 63 days or more, and you switch to
a new group health plan, it cannot invoke the pre-existing condition
exclusion at all. It must cover your medical problems as soon
as you enroll in the plan. (Newborns and adopted children who
are covered within 30 days are not subject to the 12-month waiting
period.)
Most health coverage is creditable. It includes prior coverage
under a group health plan (including a governmental or church
plan), health insurance coverage (either group or individual),
Medicare, Medicaid, a military-sponsored health care program such
as CHAMPUS, a program of the Indian Health Service, a state high-risk
pool, the federal Employees Health Benefit Program, a public health
plan established or maintained by a state or local government,
and a health benefit plan provided for Peace Corps members.
On the other hand, if you don't have that creditable coverage
behind you when you enroll in a new group plan, it can refuse
to pay for any of your existing medical problems, but only for
a maximum of 12 months. Late enrollees in group health plans may
have to wait up to 18 months for coverage of pre-existing conditions.
Giving You Credit Where Credit is Due
Chances are, if you've already been in a group health plan, you
won't have to sit out the full 12-month exclusion period, though.
Your new health plan must give you "credit for time served" —
the amount of time you were enrolled in your previous plan —
and deduct it from the exclusion period. Thus, if you've had 12
or more months of continuous group coverage, you'll have
no pre-existing condition waiting period. And if you had prior
coverage for eight months, you can be subject to only a four-month
exclusion period when you switch jobs.
But let's say you're a recent college graduate and you haven't
had health insurance for the last six months because you'd rather
spend your money elsewhere. But then you land a job that offers
you group health coverage. Because you've had such a long lapse
in coverage, you'll likely face the 12-month exclusion period
for any existing medical problems you have. (Keep in mind that
insurers are not required to impose these pre-existing exclusions,
but it is their standard practice.)
In order to keep your coverage continuous, you cannot let it
lapse for more than 62 days. That's where COBRA can help. If you
leave one company before starting with another, consider buying
COBRA coverage to keep your coverage continuous. Otherwise, you'll
be back at square one and faced with another 12-month exclusion
period.
Whenever you leave any health plan, either group or individual,
make sure that you get a "certificate of creditable coverage"
in writing. This is the only way to ensure your rights under HIPAA.
Among other things, your certificate should say:
- Your coverage dates
- Your policy ID number
- The insurer's name and address
- Any family members included under your coverage.
Remember to review the certificate for accuracy. When applying
for a new group health plan, you'll give the certificate to the
plan administrator at your company. You'll give it directly to
the insurer when applying for an individual health plan.
As an alternative method of determining your creditable coverage,
insurers can look at your coverage for five specific benefits:
prescription medications, vision, dental, mental health, and substance
abuse treatment. If you had a group health plan for 12 continuous
months but had coverage for, say, dental benefits, for just six
of those months, you would only be credited for six months of
dental coverage. Thus, your new health plan could impose a pre-existing
condition exclusion for dental benefits only — not the entire
health plan — for up to six more months.
Continue to page 2, Individual health plans and HIPAA.
By Frances Donovan and Jennifer M. Gangloff
insure.com. |