Overview

The Health Insurance Portability and Accountability Act (HIPAA) has two parts. It provides protections for you and your dependents if you’re trying to get into an employer-sponsored health plan, and it provides protections if you’re seeking coverage under an individual plan. For some Californians, state law provides similar and sometimes more generous protections. DB101 has a program description of Private Health Coverage for those who need more general information.

Note: HIPAA also contains rules about privacy issues that will not be discussed here as they are not disability-specific.

Employer-Sponsored Health Coverage Protections

Health Status

HIPAA and California law prohibit employer-sponsored health plans from denying you coverage due to your health status. If the plan offers coverage to dependents, they also cannot be denied coverage based on their health status. It does not matter if you or a dependent has cancer, multiple sclerosis, bipolar disorder or any other mental or physical condition. Your employer’s health coverage provider cannot deny you access to their group coverage plan or charge you more for it because of the status of your health. This is a very important protection because, unless you meet specific criteria, you can be denied access when trying to buy individual coverage on the open market.

Pre-existing conditions

While employer-sponsored coverage providers cannot deny you access to coverage because of the status of your health or your medical history, they can temporarily refuse to pay for treatment of a pre-existing condition. This is known as a pre-existing condition exclusionary period. For those enrolling in an employer-sponsored health plan, HIPAA defines a pre-existing condition as any health condition that you received or were recommended advice, care, diagnosis, or treatment within the six months prior to enrollment in a new health plan.

Under HIPAA, pre-existing condition exclusionary periods generally cannot last longer than 12 months. If you don’t enroll when you’re first eligible, this period could last as long as 18 months. For this reason, it is important to enroll in group coverage right away when it is offered. California has passed laws that offer more generous protections to employees covered under some employer-sponsored plans. In these cases, the maximum pre-existing condition exclusionary period for employer-sponsored plans is 6 months, 12 for late enrollees.

Whether HIPAA or California regulations apply depends on the way your employer’s plan is organized. If you are insured under a self-insured plan, you are protected under the HIPAA regulations (6 month look-back, 12 month maximum exclusionary period, 18 months for late enrollees). If you are insured under fully insured employer-sponsored health plans, the more generous California laws apply (6 month look-back, and 6 month maximum exclusionary period, 12 for late enrollees). If you work for a small employer (between 2 and 50 employees) in California, there is no penalty for late enrollees. To find out whether you’re in a fully-insured or self-insured plan, ask your employer or health plan.

If your new coverage is an HMO, they may require that you work for the company for a certain period of time before your coverage begins. This is called an affiliation period, and it is limited to sixty days. While you won’t have coverage during this time, you won’t have to pay premiums. HMOs can have either an affiliation period or a pre-existing condition exclusionary period, but not both.

Pre-existing condition exclusionary periods cannot apply to pregnant women, newborn babies, adopted children or children placed for adoption, so long as the child enrolls in health coverage within 30 days of birth, adoption or placement for adoption. Some health coverage plans do not impose pre-existing condition exclusionary periods. Those that do must notify you if they intend to impose one and of your right to document prior “creditable coverage”.

Creditable coverage

If you had health coverage before signing up for a new group health plan, HIPAA and California law let you use that previous coverage to reduce or eliminate a pre-existing condition exclusionary period.

Example

You have diabetes and have just gotten a new job. Your new employer’s health plan normally requires people with diabetes to wait 180 days before covering diabetes-related expenses. However, before you took the new job, you were on a previous employer’s health plan for 50 days. That means you have 50 days of creditable coverage, all of which can be subtracted from your pre-existing condition exclusionary period. So, rather than waiting 180 days, you only have to wait 130 days before your plan will cover your diabetes related expenses (the 180 day exclusionary period minus 50 days of creditable coverage).

Although you can reduce or eliminate a pre-existing condition exclusionary period with creditable coverage, there are time limits. In general, you have 63 days from the time it ends to enroll in your new group plan. If you enroll past that deadline, the prior coverage will not be considered creditable, and cannot be used to reduce exclusionary periods.

Example

You have multiple sclerosis. You have just taken a new job and are trying to determine how much creditable coverage you have from your previous individual coverage plan. You were covered under your previous plan for 100 days, and went 60 days without coverage before taking this new job. Since you have gone less than 63 days without coverage between jobs, your prior coverage is considered creditable. Any pre-existing condition exclusionary period will be reduced by 100 days.

Example

If, however, you were covered for 100 days, then went 65 days without coverage before starting your new job, those 100 days would not be considered creditable. This is because your gap in coverage between jobs was more than 63 days.

For fully-insured plans in California, if your previous coverage was through an employer, and you lost that coverage because employment ended, or the employer stopped offering or contributing to health coverage, the limit is 180 days.

Many forms of coverage are considered creditable, including private health coverage plans, continuation coverage, and public health benefits such as Medi-Cal and Medicare.

Getting Information about Creditable Coverage

Your prior health coverage provider is required to provide information about your previous coverage to you and your new provider. This is known as a “certificate of coverage.” If you request a certificate of coverage and do not receive it, contact the plan administrator. If you still have trouble getting this information, pay stubs from your old job or an explanation of benefits form (EOB) may be used to document creditable coverage instead.

Special Enrollment

HIPAA’s rules on employer-sponsored coverage also offer protections for those who suddenly lose access to employer-sponsored health coverage. HIPAA also offers protections if you become dependent through marriage, birth, adoption or placement for adoption. If one of these applies to you, and you have access to other employer-sponsored coverage, you would be eligible for special enrollment in that new coverage under HIPAA. This means you can enroll without having to wait for the next regular enrollment period and, if a pre-existing condition exclusionary period applies, you won’t be considered a late enrollee. You must, however, tell your new health plan that you want special enrollment within 30 days of losing your prior coverage or becoming a dependent.

Individual Health Coverage

Besides its group coverage protections, HIPAA also provides some protection for individuals leaving group health coverage. Generally, individual health plans can be expensive and there is no guarantee that you will be offered a policy. However, if, you meet all of the following criteria, you are deemed “HIPAA-eligible,” and you will have a guaranteed right to buy individual coverage:

• You have had continuous creditable coverage for a total of at least 18 months without a significant break in coverage (63 days or more).
• Your most recent health coverage was through a group plan.
• You prior group coverage did not end due to fraud or nonpayment of premiums.
• You used up your COBRA benefit (if it was available to you).
• You are ineligible for Medicare, Medi-Cal or any other insurance coverage including group plans.

Protections You Have as a HIPAA-eligible Individual:

• All insurers who offer individual coverage must offer you a choice of at least two policies.
• There is no pre-existing condition exclusionary period.

Protections You Have if You are Not HIPAA-eligible:

If you aren’t HIPAA-eligible individual, individual plans can refuse to cover you based on your medical history. If a plan does decide to cover you, California law provides some limited protections for you. While your plan can impose pre-existing condition exclusionary periods, both the definition of pre-existing conditions and the amount of time you can be excluded for those conditions depend on how many people are on your policy. For a policy that covers 1-2 people, the plan can look at the past 12 months of your medical history. If you’ve received or been recommended treatment, advice, care, or a diagnosis for a condition within those 12 months, they can deny you coverage for that condition for up to 12 months.

Example:

You sign up for an individual policy that covers you and your husband. You were treated for a back problem 11 months ago. The provider decides to offer you coverage, but they won’t pay for treatment related to your back problem until you’ve been on the plan for 12 months.

If you’re on an individual policy that covers 3 or more people, the provider can only look back 6 months, and can only exclude conditions for 6 months.

Example:

You sign up for an individual policy that covers you, your wife, and your two kids. Since your policy covers 3 or more people, once the provider decides to offer you coverage, it can only look at the prior 6 months of your medical history and can only exclude coverage for up to 6 months.

If you had prior group or individual coverage within 63 days prior to the start of your new policy, your exclusionary period might be reduced.

It’s important to realize that the rules regarding pre-existing conditions only apply if a provider decides to offer you coverage. Before that point, they can look at your entire medical history and deny you coverage based on what they find. It’s also important to note that individual plans can charge you more based on your health. If you can’t get coverage on the individual market or this coverage is too expensive, you might want to look into the Major Risk Medical Insurance Program (MRMIP, or “Mister MIP”)

A Note on Association-sponsored Plans

Some people get health coverage through unions or other professional organizations. Some self-employed people, for example, get health coverage this way. The laws governing these types of plans depend on a number of factors, including the type of policy, who the participants are, and other variables, so it’s impossible to make general statements about which laws apply. If you are covered through your union or professional organization, contact the California Department of Insurance or the California Department of Managed Health Care (DMHC) to learn more about your rights. DMHC has a helpful chart that will tell you which agency to contact.

Sources

The following links provide detailed information on HIPAA & California protections. If you want more general information, please go to the DB101 HIPAA & California Protections Resources page.

The U.S. Department of Labor offers information and links to a variety of resources on HIPAA.

U.S. Code: Title 29, Chapter 18, Subchapter I, Subtitle B, part 7, Subpart A addresses requirements relating to portability, access and reliability of health care.

The California laws governing health coverage protections are found in the Health and Safety Code, Sections 1357-1357.17 and 1357.50-1357.54; and Insurance Code 10700-10718.7.

The Georgetown University Health Policy Institute publishes a Consumer's Guide to Getting and Keeping Health Insurance in California, which helps consumers understand health care protections provided under federal and state law, including HIPAA.

Insurance Markets: Rules Governing California’s Individual Insurance Market is a California Health Care Foundation Issues Brief on group and individual coverage. It includes information on HIPAA and related topics.

The California Patient’s Guide Chapter V: Your Rights to Coverage of Pre-existing Conditions examines California and federal law on pre-existing conditions.