HIPAA defines “pre-existing condition” as “a condition
(whether physical or mental) regardless of the cause of the
condition, for which medical advice, diagnosis, care, or treatment
was recommended or received.” The definition no
longer includes a condition for which a prudent person
would have sought treatment.
Health insurers used to have the option to deny a new plan
member’s coverage of a pre-existing condition until after a
waiting period. They could even refuse coverage for a person
with a poor health history or with a specific illness, such as
cancer or AIDS.
The HIPAA, which took effect July 1, 1997, changed this
situation. All group health plans with two or more participants
are subject to this law, whose main purpose is to make health coverage more continuous and more portable for
people who change jobs, especially for people who have a preexisting
condition. The following descriptions and explanations
are some of the highlights of HIPAA.
Prohibiting discrimination
Insurers can’t deny coverage to eligible employees and their
dependents under a group health care plan or insurance policy
based on their health condition, medical history, or other
evidence of insurability (a statement of proof of a person’s
health condition or other health-related information). In
addition, insurers may not charge employees higher premiums
or plan contributions based on these conditions.
Setting limits for exclusions
Under HIPAA, an insurer may apply a pre-existing condition
exclusion or waiting period only if it’s for a condition
for which medical advice, diagnosis, care, or treatment was
recommended or received during the six-month period before
your enrollment date. (If you had a medical condition and
didn’t receive medical advice, diagnosis, care, or treatment
within the six months before your enrollment date, then the
condition is not considered to be pre-existing.) An insurer
can apply a maximum waiting period of 12 months after your
enrollment date.
For example, if you received treatment for asthma in October
and plan to enroll in a new policy the following January,
the asthma may be considered a pre-existing condition and
may be subject to, at most, a 12-month waiting period.
(Until the waiting period is over, you pay the medical costs
for treating the asthma.)
The waiting period must be reduced by the number of days
the individual had previous creditable coverage coverage
under a group health plan HMO, individual health insurance policy, Medicaid, or
Medicare without any break in coverage of more than 62
days. Coverage made up only of excepted benefits benefits
provided under a separate policy such as coverage solely for
dental or vision benefits, doesn’t count.
So, for example, if you have seven months of creditable coverage,
the new plan may impose a five-month waiting period
for a pre-existing condition. However, if a previous health
plan covered you continuously for five months, and then
COBRA covered you for seven months, you receive credit
for 12 months of coverage by your new group health plan
and avoid a waiting period altogether.
The maximum waiting period differs for late enrollees: 18
months is the maximum waiting period allowed for conditions
treated within the six months before enrollment. A late
enrollee, or entrant, is a plan member or dependent who
enrolls in a plan on a date other than:
- The earliest date on which coverage can become effective
under the terms of the plan
- On a special enrollment date, such as when a change in
family status occurs or you experience loss of group coverage
under another plan
Employees or dependent spouses who are otherwise eligible
but not enrolled in a plan aren’t considered late enrollees if
they enroll in a group plan within 30 days of one of the
following:
- A loss of eligibility for group coverage under another plan
due to separation, divorce, death, termination of employment,
reduction in work hours, termination of employer
contribution toward coverage, termination of COBRA,
or state-mandated continuation of coverage
- A change in family status due to marriage, birth of a
child, or adoption of a child
Some of the new limits set by HIPAA disallow exclusions for
newborns, for children adopted while the employee is covered
under the plan, and for pregnancy (including late
enrollees).
Guaranteeing availability and
renewability
An applicant may receive credit (creditable coverage) for previous
health insurance as long as the coverage didn’t lapse
more than 62 days. Group health plans and health insurance
issuers are required to provide a certificate of coverage, showing
the dates that an individual is covered by a group health
plan, to document their creditable coverage. By showing this
certificate to the new group plan administrator, you can get
credit toward a pre-existing exclusion period.
Special enrollment rights permit individuals to enroll without
having to wait until the plan’s next regular enrollment
period. These rights are provided to employees who were eligible
for and declined enrollment in the plan when first
offered because they were covered under another plan, and
to individuals upon marriage or upon the birth or adoption
of a new dependent.
Providing better access to individual
coverage
If you left a job that provided group health insurance coverage
or had coverage under another plan for more than 18
months without a break of more than 62 days, HIPAA makes
getting individual insurance (or satisfying a group plan’s preexisting
condition clause) easier for you.
Individuals must meet the following requirements to be
eligible for access to individual insurance:
- You must have been covered for at least 18 months, most
recently under a group health plan
- Your group coverage wasn’t terminated because of fraud
on the individual’s part
- You aren’t eligible for or have exhausted your COBRA
(or similar state provision) benefits
- You aren’t eligible for coverage under another group
health plan, Medicare or Medicaid, or any other health
insurance coverage
If you haven’t had group coverage and are having difficulty
getting insurance on your own, check with your state insurance
department to see whether your state has a high-risk
health insurance pool.
Don’t try to avoid a waiting period by hiding a condition.
Insurance companies investigate thoroughly, and they will
catch you.
Certifying a Medical Procedure
A health insurance policy often includes a pre-admission
certification provision. Before you enter the hospital as an
inpatient for (non-emergency) surgery or other type of service,
you must apply for pre-certification advance authorization
for the hospital stay. Pre-admission certification allows
a health insurance plan to determine whether a proposed
treatment or service is medically necessary, whether it is covered
by the plan, and how long the hospital stay should be,
based on established medical criteria. Certification helps a
plan limit its costs by weeding out unnecessary procedures
and services. Without this certification, a policy may not
cover your hospital stay.
With some health insurance plans, you, your doctor or hospital,
or another health care provider must notify the plan in
writing or by telephone before the date of treatment or service,
usually within 72 hours. Expect to provide details such
as the following:
- Diagnosis
- Related symptoms and their duration
- Results of any physical exam, lab tests, and X rays
- Treatment plan
- Doctor and facility information
- Proposed admission date and number of inpatient days
required
- Date of proposed surgery or other procedure
The plan subsequently notifies you of its decision. If certain
treatments or services aren’t certified, the insurer may reduce
benefits by a penalty (see the schedule of benefits).
If you go to the hospital for an emergency, you may still have
to notify your health insurer within a specified time to avoid
a penalty. | 
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