HIPAA - Health Insurance Portability and Accountability Act
In 1996 the federal government passed into law the Health Insurance Portability and Accountability Act (HIPAA). HIPAA law provides eligible individuals who have recently lost their employer sponsored group health plan the opportunity to purchase health insurance coverage even if they have a preexisting health condition. If you meet the definition of an eligible individual, all health insurance companies who sell individual plans must offer you health insurance regardless of your medical history. This requirement to issue insurance is called "guaranteed issue." You may not be declined coverage based on medical reasons. In order to qualify as an eligible individual you must meet the following conditions:
- Your last health care coverage must have been under an employer sponsored group health plan, which includes COBRA continuation coverage, for at least 18 months. This prior 18-month coverage is referred to as "creditable coverage."
- All available COBRA continuation coverage has been elected and exhausted. If you qualify for COBRA you are required to accept the coverage and continue the coverage for the maximum time period allowed. (When an employer terminates its existing group health plan entirely, COBRA coverage ends and is considered exhausted.)
- You are not eligible under a group health plan, Medicare, Medi-Cal, and/or do not have other health insurance coverage.
- You did not lose your most recent health coverage due to nonpayment of premium or fraud.
Once COBRA has been exhausted, you have 63 days to file an application to purchase a guaranteed issue HIPAA policy with an insurance company or health plan. All carriers that sell individual health care policies must offer their two most marketed individual plans to HIPAA eligible individuals regardless of your health status. If you accept a conversion policy or a short-term policy after exhausting COBRA, you give up your HIPAA eligibility. It is important to understand that a conversion policy is not a HIPAA policy.
When applying for a HIPAA policy you can present a Certificate of Creditable Coverage from your insurance company or health plan as part of the application process. The Certificate of Creditable Coverage is a written statement from your insurance company or health plan showing the length of time you have been covered. The Certificate can be used as proof of your 18 months continuous creditable coverage when applying for a HIPAA policy.
Important Points to Remember About HIPAA:
- HIPAA gives eligible individuals who have lost group coverage the opportunity to purchase individual health coverage.
- HIPAA eligible individuals are not subject to medical underwriting.
- HIPAA policies must be issued to eligible individuals on a guaranteed issue basis regardless of any preexisting medical condition.
- You have only 63 days after COBRA has been exhausted to file an application to purchase a HIPAA policy.
- HIPAA policies are not conversion policies. Accepting a conversion or short-term policy terminates your HIPAA eligibility.
- You may contact the CDI or the DMHC depending on the type of coverage you have (indemnity or HMO) if you are experiencing problems with HIPAA.