Health Insurance Portability and Accountability Act (HIPAA)

HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA)

The Health Insurance Portability and Accountability Act (HIPAA) was signed into law on August 21, 1996. Do not confuse this date with the dates that the Act becomes effective. The HIPAA Act is very good news for people with pre-existing conditions. It provides important new protections to prevent or limit discrimination in health insurance coverage. In addition, the Act prevents discrimination in enrollment and in premiums charged to employees and their dependents based on health status-related factors.

Under HIPAA, a group health insurance plan may impose a waiting period for preexisting conditions only if the following requirements are satisfied:

Pre-existing condition exclusion must relate to a condition for which medical advice, diagnosis, care or treatment was recommended or received during the 6 month period prior to an individual's enrollment date;
A pre-existing condition exclusion may not last for more than 12 months (18 months for late enrollees) after an individual's enrollment date; and
This 12 or 18 month period must be reduced by the number of days of the individual's prior creditable coverage. You do not get credit for prior group coverage if you have had a gap in coverage of 63 days or more.

This is really good news for people who currently have health coverage and want to change jobs. As explained above, HIPAA limits the time period for restricting coverage due to pre-existing conditions. However, the HIPAA is not yet effective for all employers. It applies to plans that are in force at their first renewal or plan anniversary on or after July 1, 1997. For example, if your employer's group plan has a renewal date of October 1, 1997, HIPAA will apply to you after 10-1-97. If your company buys a new group health insurance plan after July 1, 1997, HIPAA applies.

Another very important part of the Act says if you had a medical condition in the past, but have not received any medical advice, diagnosis, care or treatment within the 6 months prior to your enrollment date in the plan, your old condition is not a preexisting condition for which an exclusion can be applied. The Health Insurance Portability and Accountability Act is a very complex law. More than 200 pages of interim regulations have been written. This article only deals with one aspect of the Act. For more detailed information, you can call The Labor Department at (888) 998-7542 and ask for a free copy of the booklet "Questions and Answers: Recent Changes in Health Care Law". You can also view it on the Department of Labor's website at http://www.dol.gov/dol/pwba.

Irene C. Card is the founder and president of Medical Insurance Claims, Inc. a health claims processing company serving individuals and physicians. If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828