HIPAA: It's More Than Just Privacy
We've all heard of HIPAA for its privacy protections. When we visit any new doctor's office, we sign forms about how they can handle our health information. But the Health Insurance Portability & Accountability Act of 1996, better known as HIPAA, covers more than just privacy issues. The law also provides protections for health insurance coverage when you make a job change and provides insurance coverage for some individuals as well. Let's take a look at the major points HIPAA covers related to health insurance.
Prior to the law, people feared that if they changed jobs they would be denied health insurance coverage because of a pre-existing condition. HIPAA provides some protection against this.
A few key points:
- HIPAA laws only apply if you are going from one group plan to another group plan or a HIPAA plan, not individual plans.
- In order to take advantage of any HIPAA laws, you cannot have a break in coverage over 63 days - so time is of the essence!
Under HIPAA law, the insurer cannot deny you coverage, but they can look back six months into your health history. If you "received medical advice, diagnosis, care or treatment for a condition" during that period, that condition can then be excluded for a limited period of time, otherwise called the preexisting condition exclusion period (PCEP). However, they cannot deny access to benefits unrelated to the condition for which you were treated. For example, let's say that you had a cancer diagnosis and finished treatment 2 months ago. The insurer can exclude coverage for any cancer-related treatment for a period of time. However, if you then broke your arm, the insurer would have to cover the treatment for your arm.
The preexisting condition exclusion period is quite complicated (should we be surprised - it is a federal law!) This period is limited to a maximum of 12 months in most cases (although this maximum period is shorter in some states), so after 12 months, you cannot be denied full coverage. However, it isn't quite that simple, as you can receive "credit" for the time you had coverage in the past - this is called "creditable coverage".
Creditable coverage can be used to reduce or eliminate the PCEP. HIPAA defines creditable coverage as a period of prior health coverage, which may be used to offset the length of a preexisting condition exclusion period. This includes coverage under a group health plan, COBRA, Medicare, and Medicaid, or an HMO or individual health insurance policy. So, if you had health insurance coverage with your previous employer for 5 months, the maximum preexisting condition exclusion period you can be subject to is 7 months. If your previous coverage was for 12 months or more, you can eliminate the PCEP entirely. If your employer has a waiting period before insurance benefits begin, that time will count towards the PCEP.
HIPAA also requires that all insurance companies that write individual policies offer a HIPAA plan. In order to qualify for this plan, you must have exhausted all of the COBRA options available to you, be ineligible for group coverage, Medicare, or Medicaid, and apply no later than 63 days after the loss of coverage.
The government has a publication reviewing the basics of HIPAA's health plan protections, entitled Your Health Plan and HIPAA… Making the Law Work for You. Understanding your rights under HIPAA and other laws allows you to ensure that you are getting what the laws say you should get. If you have questions about the application of the law, contact your state's Department of Insurance, a local legal aid office or the Cancer Legal Resource Center.