The Health Insurance Portability and Accountability Act (HIPAA) is the federal law that provides and helps protect consumers’ rights to health coverage when transitioning from
- one group health plan to another group health plan,
- a group health plan to and individual policy, and
- an individual policy to a new group health plan.
For consumers in the group market, HIPAA does the following:
- limits preexisting condition exclusions;
- prohibits discrimination against enrollees and potential enrollees based on health factors;
- requires special enrollment opportunities for individuals who lose other group health coverage or gain new dependents, such as a spouse or a child; and
- requires the issuance of certificates of creditable coverage.
For consumers who are HIPAA-eligible and who seek to purchase a policy in the individual market, HIPAA does the following:
- guarantees the right to purchase individual coverage;
- prohibits preexisting condition exclusions for the specified HIPAA policies;
- requires the issuance of certificates of creditable coverage; and
- guarantees renewal of individual health insurance coverage.
- Pregnancy cannot be treated as a preexisting condition.
Guaranteed Issue Coverage
For those who are exhausting COBRA programs or are losing group health coverage with no employer continuation offering, HIPAA regulations allow you to purchase guaranteed-issue health coverage under the following rules:
- COBRA benefits must be exhausted or not offered;
- You must apply for HIPAA coverage within 63 days after termination of COBRA, Cal-COBRA or employment if no COBRA offered;
- You must have been covered for 18 months continuously prior to HIPAA effective date with the most recent coverage being employer-sponsored group health insurance with no gaps greater than 63 days between any prior coverage;
- Must not be enrolled in nor eligible for Medicare Part A or B, Medicaid or MediCal or covered by another group health insurance plan.
HIPAA Application Process
HIPAA applications can be obtained from an health insurance carrier in your state of residence.To expidite your HIPAA Application have the following documents ready:
- Certificate of Creditable Coverage showing expiration of benefits and at least 18 months of coverage; this is also referred to as a Certificate of Group Health Coverage or Certificate of Prior Health Coverage
- COBRA certificate or letter from health insurer or employer (if self-funded/self-insured) showing exhaustion of all continuation benefits (usually provided 30-60 days before the end of COBRA); this is also referred to as a COBRA Termination Letter and can be a letter from the employer, health plan or administrator indicating that your continuation coverage will be or has come to an end due to maximum period allowed.
- If you were not eligible for the CalCOBRA continuation extension to 36 months under AB 1401, proof that the plan did not qualify for that extension (out-of-state, self-funded, etc.). They will ask for written proof in these situations and will NOT take your word for it. You must be able to prove a valid reason for not getting the second 18 months under CalCOBRA in some official manner.
- Loss of continuation due to company terminating health plan.You will need to provide some proof in writing that the employer has discontinued health insurance continuation coverage.
HIPAA Start Dates
Also be aware the even though HIPAA is a guaranteed-issue situation to those who qualfiy, it is not immediate enrollment. Carriers can take several weeks to complete enrollment under HIPAA, so be prepared for that. While HIPAA plans are intended to provide guaranteed-issue coverage after COBRA, it is important to bear in mind the effects of start dates in coordinating coverage, especially if your COBRA continuation terminates on an odd date (like the 12th of the month). HIPAA HMO plans can only start on the first of the month following application. This means that if your COBRA expires on the 20th of the month, you will have a 10-11 day gap in coverage until the HIPAA HMO effective date. HMOs cannot coordinate to last COBRA date except for those whose COBRA ends on the last day of the month.
