Health Insurance Portability and Accountability Act (HIPAA) « Health Insurance Advisory

Know Your HIPAA Portability Rights

Enacted in 1996, this important federal law was created to protect eligible workers and their families by requiring states to guarantee the purchase of a private individual medical insurance plan to individuals who would otherwise not qualify because of their health status.  HIPAA also requires that pre existing health conditions be covered. Other important HIPAA mandates include:

  • Guaranteeing continuous medical insurance coverage for pre existing conditions when an individual changes employers (moves from one employer sponsored group health insurance plan to another)
  • Limiting to 12 months the time period a new employer’s group health insurance plan can exclude a pre existing condition
  • Providing additional enrollment opportunities under an employer sponsored group health insurance plan if other medical insurance coverage is lost or certain life events occur
  • Prohibiting discrimination against employees on the basis of their health status
  • Protecting confidential, personal, identifiable health information by setting privacy standards for healthcare providers, medical insurance carriers and health plans

Guaranteed Access to Individual (non-employment based) Medical Insurance

HIPAA guarantees individuals the right to purchase a private individual medical insurance plan, regardless of health status. This is important because most individual medical insurance plans are medically underwritten. As a result, individuals with existing medical conditions may not qualify. If you have a pre existing medical condition and not sure if you qualify for an individual, family or self employed medical insurance plan, then use our exclusive Insurability Profile Tool™. It is fast, free and confidential. Based on your response to common questions contained on an application for medical insurance, you will get instant feedback regarding your health status and how most health insurance carriers will respond.

HIPAA also assures that no exclusions or waiting periods for pre existing conditions are applied to the individual medical insurance plan.

To qualify for these special rights, the person must be a “HIPAA Eligible Individual.” This is achieved by satisfying all of the following HIPAA eligibility requirements:

  • Had continuous (no break in coverage for 63 days or longer) credible medical insurance coverage for at least eighteen months with the most recent coverage being under an employer sponsored group health plan,
  • Lost employer sponsored group health insurance coverage due to circumstances other than fraud or non-payment of premium,
  • Elected and exhausted COBRA continuation coverage, if eligible (employers less than 20 employees are not subject to COBRA),
  • Not be eligible for coverage under another group health plan, Medicare or Medicaid, and
  • Not have medical insurance

Individuals who meet the above criteria can purchase an individual medical insurance plan through the individual health insurance market and/ or state risk pools, depending upon the state in which they live. The right to purchase an individual medical insurance plan is the same whether a person quits his/ her job, was fired or laid off.

Note: Since the passage of the new healthcare law, children less than 19 years of age must be accepted for medical insurance, regardless of their HIPAA or health status.

Continuous Medical Insurance Coverage Requirement

HIPAA requires that medical insurance coverage be continuous. This means the individual cannot go without medical insurance for 63 days or longer. If this occurs, then the individual does not meet the HIPAA requirements and the special rights and protections of the law do not apply. This includes 1) the right to purchase an individual medical insurance plan, regardless of health status, without coverage exclusions or waiting period for pre existing conditions or 2) credit toward satisfying the pre existing conditions waiting period when changing from one employer sponsored group health insurance plan to another.

Avoiding 63 Days or Longer Break in Coverage

There are several ways to ensure that continuous medical insurance coverage is maintained, including:

Credible Coverage Requirement

HIPAA requires that prior medical insurance coverage be credible. Credible medical insurance coverage includes previous coverage under an employer sponsored group health insurance plan, an individual medical insurance plan, COBRA continuation, Medicaid, Medicare, CHAMPUS, the Indian Health Service, FEHBP, the Peace Corps Act, or a public health plan, such as a state high risk pool.

To be considered a HIPAA Eligible Individual, the last day of coverage must be under an employer sponsored group health insurance plan.

State High Risk Pools and Individual Medical Insurance Marketplace

State high risk pools are the most common method of providing HIPAA Eligible Individuals with health insurance. Additionally, nearly all high risk pools also provide non-HIPAA eligible residents who meet certain eligibility criteria access to health insurance.

For information on purchasing health insurance from a high risk pool, visit our government medical insurance plans section.

States that do not offer high risk pools guarantee HIPAA Eligible Individuals the opportunity to purchase an individual medical insurance plan from health insurance carriers directly.

About State High Risk Pools

High risk pools are special programs created by state legislatures to provide a safety net for the “medically uninsurable” population. These include individuals who have been denied health insurance coverage because of a pre existing health condition, or who can only access private coverage that is restricted or has extremely high premiums.

High Risk Pools Facts

  • Each high risk pool is unique because each state operates its own program
  • Benefit levels vary, but coverage is comparable to basic medical insurance offered in the private individual medical insurance marketplace
  • High risk pools may have a waiting period for pre existing conditions, however, HIPAA Eligible Individuals, are not subject to this restriction
  • The premiums, while capped by law, are generally more expensive than basic health insurance offered in the private individual medical insurance marketplace
  • High risk pools lose money and are subsidized. States rely on various ways to finance their high risk pool, including insurance carrier assessments, general tax revenues and special sources, such as a tobacco tax and surcharge on healthcare providers and healthcare services.

The following states guarantee HIPAA Eligible Individuals and residents who are non-HIPAA eligible that meet certain eligibility requirements guaranteed access to medical insurance:

For more information on a particular state’s high risk pool and eligibility criteria for non-HIPAA eligible residents,visit our government medical insurance plans section.

State Where to obtain health insurance for HIPAA and non-HIPAA Eligible Individuals
Alaska State High Risk Pool – all residents and HIPAA Eligible Individuals
Arkansas State High Risk Pool – all residents and HIPAA Eligible Individuals
Colorado State High Risk Pool – all residents and HIPAA Eligible Individuals
Connecticut State High Risk Pool – all residents and HIPAA Eligible Individuals
District of Columbia - Blue Cross / Blue Shield offer coverage – all residents
- HIPAA Eligible Individuals – all insurance carriers
Idaho Insurance carriers offer basic and standard High Risk Pool policies to the medically uninsurable and HIPAA Eligible Individuals
Illinois State High Risk Pool – all residents and HIPAA Eligible Individuals
Indiana State High Risk Pool – all residents and HIPAA Eligible Individuals
Iowa State High Risk Pool – all residents and HIPAA Eligible Individuals
Kansas State High Risk Pool – all residents and HIPAA Eligible Individuals
Kentucky State High Risk Pool – all residents and HIPAA Eligible Individuals
Louisiana State High Risk Pool – all residents and HIPAA Eligible Individuals
Maine Insurance carriers and HMOs offer coverage – all residents and HIPAA Eligible Individuals
Maryland State High Risk Pool – all residents and HIPAA Eligible Individuals
Massachusetts Insurance carriers and HMOs offer coverage – all residents and HIPAA Eligible Individuals
Michigan - Blue Cross/ Blue Shield offer coverage – all residents and HIPAA eligible
- Most HMOs are required to cover a limited number of residents during one, 30 day open enrollment per year
Minnesota State High Risk Pool – all residents and HIPAA Eligible Individuals
Mississippi State High Risk Pool – all residents and HIPAA Eligible Individuals
Missouri State High Risk Pool – all residents and HIPAA Eligible Individuals
Montana State High Risk Pool – all residents and HIPAA Eligible Individuals
Nebraska State High Risk Pool – all residents and HIPAA Eligible Individuals
New Hampshire State High Risk Pool – all residents and HIPAA Eligible Individuals
New Jersey Insurance carriers and HMOs offer coverage – all residents and HIPAA Eligible Individuals
New Mexico State High Risk Pool – all residents and HIPAA Eligible Individuals or New Mexico Health Insurance Alliance
New York Insurance carriers and HMOs offer coverage – all residents and HIPAA Eligible Individuals
North Carolina - State High Risk Pool – all residents
- HIPAA Eligible Individuals – all insurance carriers
North Dakota State High Risk Pool – all residents and HIPAA Eligible Individuals
Ohio - Insurance carriers and HMOs offer standardized policies on a periodic basis for a limited number of residents during a specified time period (usually 30 days) one time per year.
- HIPAA Eligible Individuals – all insurance carriers
Oklahoma State High Risk Pool – all residents and HIPAA Eligible Individuals
Oregon All insurance carriers or State High Risk Pool – HIPAA Eligible Individuals only
Pennsylvania Blue Cross/ Blue Shield offer coverage – all residents and HIPAA Eligible Individuals
Rhode Island - Blue Cross/ Blue Shield offer coverage – all residents
- Insurance carriers offer coverage to residents with 12 months of continuous creditable coverage, provided the individual is not eligible for alternate group coverage, Medicare or state insurance plan.
- HIPAA Eligible Individuals – all insurance carriers
South Carolina State High Risk Pool – all residents and HIPAA Eligible Individuals
South Dakota State High Risk Pool – all residents and HIPAA Eligible Individuals
Tennessee - State High Risk Pool – all residents
- HIPAA Eligible Individuals – all insurance carriers
Texas State High Risk Pool – all residents and HIPAA Eligible Individuals
Utah - State High Risk Pool – all residents and HIPAA Eligible Individuals
- Insurance carriers not meeting enrollment cap must offer at least one individual market policy to those that are not eligible for any other type of health insurance
Vermont Insurance carriers and HMOs offer coverage – all residents and HIPAA Eligible Individuals
Virginia - Blue Cross/ Blue Shield offer coverage – all residents
- HIPAA Eligible Individuals – all insurance carriers
Washington - Insurance carrier must offer coverage to all residents achieving a minimum score on a state mandated health status questionnaire (health screen). Those individuals not eligible for coverage are referred to the State High Risk Pool.
- HIPAA Eligible Individuals – all insurance carriers
West Virginia - State High Risk Pool – all residents and HIPAA Eligible Individuals
- Some HMOs offer coverage during an annual 30 day open enrollment period
Wisconsin State High Risk Pool – all residents and HIPAA Eligible Individuals
Wyoming State High Risk Pool – all residents and HIPAA Eligible Individuals
Source: The Kaiser Family Foundation

The states below guarantee only HIPAA Eligible Individuals access to an individual medical insurance plan. Coverage is not provided to non-HIPAA Eligible Individuals. These persons should investigate another government plan, such as Medicaid, Medicare or State Children’s Health Insurance Plan. For more information on these plans, click here. Another option is a guaranteed acceptance/ limited benefit health insurance policy.

Where to obtain health insurance for HIPAA Eligible Individuals
Alabama State High Risk Pool – HIPAA Eligible Individuals only
Arizona All insurance carriers – HIPAA Eligible Individuals only
California All insurance carriers – HIPAA Eligible Individuals only
Delaware All insurance carriers – HIPAA Eligible Individuals only
Florida Prior group insurance carrier or all insurance carriers – HIPAA Eligible Individuals only
Georgia Prior group insurance carrier or assigned insurance carriers – HIPAA Eligible Individuals only
Hawaii All insurance carriers – HIPAA Eligible Individuals only
Nevada All insurance carriers – HIPAA Eligible Individuals only
Source: The Kaiser Family Foundation

For more information on a particular state’s high risk pool and eligibility criteria for non-HIPAA eligible residents, visit our government medical insurance plans section.

HIPAA Protection – Employer Group Health Insurance

Many Americans with pre existing medical conditions are fearful of changing jobs because they are subject to a waiting period under their new group health plan. HIPAA provides special protection for this situation.

Individuals with continuous insurance coverage are required to receive credit toward satisfying the pre existing condition waiting period under their prior health plan when they change employer sponsored group health insurance. HIPAA also limits this waiting period to 12 months (18 months for late enrollees).

Example 1: Steve was covered for 22 months under his old employer’s group health insurance plan and changed jobs. He maintained continuous medical insurance coverage because he elected COBRA continuation and then enrolled under his new employer’s group health insurance plan. The new plan will give Steve 12 months of credit toward satisfying the pre existing conditions waiting period. Steve will have no waiting period under the new employer sponsored group health insurance plan.

Example 2: Jennifer was covered for 6 months under her old employer’s group health insurance plan and changed jobs. She purchased short-term major medical insurance coverage for 2 months and then enrolled under her new employer’s group health insurance plan. The new health insurance plan will give Jennifer 8 months of credit toward satisfying the pre existing conditions waiting period (6 months plus 2 months). Pre existing conditions will be covered after 4 months (12 months minus 8 months).

Example 3: Carol, after 10 years, left her employer and found a new job eight months later. She was covered under her previous employer’s group health insurance plan, but did not maintain medical insurance coverage between jobs. She will have to satisfy the full 12 month pre existing conditions waiting period under her new employer’s group health insurance plan.

Although HIPAA provides valuable protection from having to start a new waiting period for pre existing conditions, the law has limitations. For example, HIPAA does not:

  • Require employers to offer group health insurance coverage
  • Guarantee the same level of benefits, deductibles or coverage limits from one employer sponsored group health insurance plan to the next
  • Provide any protection when changing from one individual medical insurance plan to another individual medical insurance plan

Certificates of Creditable Coverage

In order to prove prior medical insurance coverage, insurance carriers and health plans are required to give a certificate of creditable coverage to individuals when they lose medical insurance coverage, become entitled to COBRA or exhaust COBRA, or upon request at anytime within 24 months after coverage ends.

Certificates of Creditable Coverage document the duration of medical insurance coverage. They are used to determine HIPAA eligibility for an individual medical insurance plan and by employer sponsored group health insurance plans to give credit toward satisfying the waiting period for pre existing medical conditions.

Special Enrollment Opportunities – Employer Group Health Insurance

Individuals covered under an employer sponsored group health insurance plan have special enrollment opportunities when they face a life event or experience other circumstances that results in the loss of coverage. Some of these include:

  • Birth, death, adoption of a dependent
  • Divorce or legal separation
  • Death of spouse
  • Dependent child no longer being eligible because of age, work or school status
  • End of spouse’s employment
  • Reduction in work hours
  • No longer living or working in the HMO’s service area
  • A health insurance claim that would meet or exceed the medical insurance policy’s lifetime limit

The individual must request special enrollment within 30 days after losing eligibility for medical insurance coverage.

COBRA and HIPAA

There are several ways to use COBRA in conjunction with HIPAA. These include:

  • COBRA continuation coverage can help preserve an individual’s HIPAA rights by avoiding more than 62 days break in medical insurance coverage between different health insurance plans.
  • COBRA coverage can be counted as creditable medical coverage, as long as there is no significant break (more than 62 day) after coverage ends. Creditable coverage can be used to offset any pre existing condition waiting period under a new employer sponsored group health insurance plan,
  • COBRA continuation coverage can be used as a bridge to ensure the individual remains covered during a new employer’s waiting period.

For more information, visit the United States Department of Labor – Employee Benefits Security Administration at: http://www.dol.gov/ebsa/publications/yhphipaa.html

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