What is the Health Insurance Portability and Accountability Act of 1996 (HIPAA)?
HIPAA is a federal law that:
- Limits the ability of a new employer plan to exclude coverage for preexisting conditions;
- Provides additional opportunities to enroll in a group health plan if you lose other coverage or experience certain life events;
- Prohibits discrimination against employees and their dependent family members based on any health factors they may have, including prior medical conditions, previous claims experience, and genetic information; and
- Guarantees that certain individuals will have access to, and can renew, individual health insurance policies.
HIPAA is complemented by state laws that, while similar to HIPAA, may offer more generous protections. You may want to contact your state insurance commissioner’s office to ask about the law where you live. A good place to start is the Website of the National Association of Insurance Commissioners at naic.org.
One of the most important protections under HIPAA is that it helps those with preexisting conditions get health coverage. In the past, some employers’ group health plans limited, or even denied, coverage if a new employee had such a condition before enrolling in the plan. Under HIPAA, that is not allowed. If the plan generally provides coverage but denies benefits to you because you had a condition before your coverage began, then HIPAA applies.
Under HIPAA, a plan is allowed to look back only 6 months for a condition that was present before the start of coverage in a group health plan. Specifically, the law says that a preexisting condition exclusion can be imposed on a condition only if medical advice, diagnosis, care, or treatment was recommended or received during the 6 months prior to your enrollment date in the plan. As an example, you may have had arthritis for many years before you came to your current job. If you did not have medical advice, diagnosis, care, or treatment – recommended or received – in the 6 months before you enrolled in the plan, then the prior condition cannot be subject to a preexisting condition exclusion. If you did receive medical advice, diagnosis, care, or treatment within the past 6 months, then the plan may impose a preexisting condition exclusion for that condition (arthritis). In addition, HIPAA prohibits plans from applying a preexisting condition exclusion to pregnancy, genetic information, and certain children.
If you have a preexisting condition that can be excluded from your plan coverage, then there is a limit to the preexisting condition exclusion period that can be applied. HIPAA limits the preexisting condition exclusion period for most people to 12 months (18 months if you enroll late), although some plans may have a shorter time period or none at all. In addition, some people with a history of prior health coverage will be able to reduce the exclusion period even further using “creditable coverage.” Remember, a preexisting condition exclusion relates only to benefits for your (and your family’s) preexisting conditions. If you enroll, you will receive coverage for the plan’s other benefits during that time.
Although HIPAA adds protections and makes it easier to switch jobs without fear of losing health coverage for a preexisting condition, the law has limitations. For instance, HIPAA:
- Does not require that employers offer health coverage;
- Does not guarantee that any conditions you now have (or have had in the past) are covered by your new employer’s health plan; and
- Does not prohibit an employer from imposing a preexisting condition exclusion period if you have been treated for a condition during the past 6 months.