What is HIPAA?

Federal Health Acts and Regulations

As you may know, insurance policies are regulated individually by the 50 states but there are a few Federal laws that govern aspects of their operation. ERISA, enacted in 1974, was the first of the major federal laws to address inconsistencies in employer provided health plans and set some uniform standards for minimum protections and plan information.

Over the years, there have been a number of amendments to ERISA, a couple of which specifically increase protections for those with on-going health problems. COBRA (enacted in 1986) allows workers and their families to continue coverage under their employer’s health plan for certain periods of time.

HIPAA Rules and Principles

The main thrust of the newest amendment, HIPAA (Health Insurance Portability and Accountability Act, enacted in 1996) is the setting out of rules regarding the protection of one’s Personal Medical Information but it also addresses policy limitations on pre-existing medical conditions. Specifically, HIPAA provides that health plans or insurers may not exclude coverage for any pre-existing medical conditions for more than 12 months after an individual's enrollment date (18 months for a late enrollee). In addition, the medical plan must count any creditable coverage that individuals accumulated prior to their enrollment date towards fulfillment of the 12 (or 18) month requirement. In other words, if you have prior insurance for at least 12 months, any pre-existing condition is fully covered under a new plan.

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Pre-Existing Conditions and Credible Coverage

A pre-existing condition is a medical condition present before your enrollment date in any new group health plan. Under HIPAA, the only preexisting conditions that may be excluded are those for which medical advice, diagnosis, care or treatment was recommended or received within the 6-month period before your enrollment date. If you have not received any medical advice, diagnosis, care or treatment within the 6 months prior to your enrollment date in the plan, your old condition is not a preexisting condition to which an exclusion can be applied. In addition, under HIPAA, preexisting condition exclusions cannot be applied to pregnancy, regardless of whether the woman had previous health coverage.

Most health coverage is considered creditable coverage including coverage under a group health plan (including COBRA continuation), HMO, individual health insurance policy, Medicaid or Medicare. You receive credit for all coverage that you had without a break of 63 days or more. Any coverage prior to a 63+ day coverage break is not counted, so it’s important to not let insurance lapse for any extended period of time. Carriers are required to provide you with a certificate documenting your creditable coverage.

What Are Your Health Insurance Options?

If you have a pre-existing condition and have the required creditable coverage you will have to make a decision weighing the increased cost of a "HIPAA Plan" versus the cost of paying for the medical care you need for that condition. Individual HIPAA plans can cost 50-80% more than a non-HIPAA plan (depending on the state, coverage and insurer) so it's likely that you’ll be paying thousands of extra dollars to your insurer to cover your specific condition. Is it worth it?

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