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Health Insurance Portability and Accountability Act (HIPAA)

March 06, 2008


HIPAA amended the Employee Retirement Income Security Act (ERISA), to provide new rights and protections for participants and beneficiaries in group health plans. Understanding this amendment is important to your decisions about future health coverage. HIPAA contains protections both for health coverage offered in connection with employment (group health plans) and for individual insurance policies sold by insurance companies (individual policies).

If you find a new job that offers health coverage, or if you are eligible for coverage under a family member’s employment-based plan, HIPAA includes protections for coverage under group health plans that:

• Limit exclusions for preexisting conditions
• Prohibit discrimination against employees and dependents based on their health status
• Allow a special opportunity to enroll in a new plan to individuals in certain circumstances

If you choose to apply for an individual policy for yourself or your family, HIPAA includes protections for individual policies that:

• Guarantee access to individual policies for people who qualify
• Guarantee renewability of individual policies

What is creditable coverage?

Most health coverage is creditable coverage, such as coverage under a group health plan (including COBRA continuation coverage), HMO, individual health insurance policy, Medicaid or Medicare.

Creditable coverage does not include coverage consisting solely of excepted benefits, such as coverage solely for limited-scope dental or vision benefits.

Days in a waiting period during which you have no other coverage are not creditable coverage under the plan, nor are these days taken into account when determining a significant break in coverage (generally a break of 63 days or more). This 63-day break period may be extended under state law if your coverage is insured through an insurance company or offered through an HMO. Check with your State Insurance Commissioner’s Office to see whether a longer break period applies to you.

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