Hone Your HIPAA Know-How: The Basics
Your insurance broker or third party administrator (TPA) is required to comply with the Health Insurance Portability and Accountability Act (HIPAA). This isn’t news, of course – as an employer or HR manager, you’re well aware of this fact. But do you know what ,exactly, “HIPAA compliance” entails? The more educated you are about your team’s insurance entitlements, the smaller the risk that these entitlements are breached by your broker or TPA.
First, we’re going to give you some background information on the law. If you’re a HIPAA expert, please feel free to skip the following paragraph:
In 1996, the U.S. government enacted HIPAA to keep patients’ medical information secure. But it’s not just limited to hospitals and medical facilities. Health care issuers are also required to comply with HIPAA, with infringement resulting in stiff penalties. Not only does HIPAA ensure the security and privacy of group health plans, but it also prohibits a health care issuer to base coverage on an individual’s health status or medical history.
So this brings us back to the question in the title of this post: Is your broker or TPA HIPAA compliant? Here’s a rundown of the conditions that cannot be used as grounds for non-coverage by a group health insurance plan:
- PRE-EXISTING CONDITIONS
An employee cannot be denied coverage because of a pre-existing medical condition. However, a group plan may institute a waiting period — no more than 12 months from the first day of coverage and 18 months for late enrollment — for pre-existing conditions. This is called an exclusion waiting period.
- Exclusion vs. Employer: Keep in mind that an exclusion waiting period is different than a general employer waiting period — the time span, decided by the employer, before new employees can begin health coverage.
If an employee is subject to both of these waiting periods — exclusion and employer — they must run concurrently. In other words, the exclusion waiting period and the employer waiting period would begin at the same time. So a 12-month exclusion waiting period and a three-month employer waiting period would be 12 months of “waiting” in all — not 15.
- Enrollment Protection & Security: A group health insurance issuer can only look back six months for pre-existing conditions. Also, a plan cannot legally require an individual to present evidence of insurability or pre-existing conditions for enrollment purposes.
- SPECIAL ENROLLMENT
Group health care plans must allow employees to enroll in a plan based on life-changing events, which include marriage, birth, adoption or placement for adoption.
Marriage coverage begins no later than the first day of the first calendar month following the special enrollment request. Coverage for birth or adoption must be effective on the date of birth or adoption/placement.
If the plan provides maternity benefits, there should be a minimum hospital stay of 48 hours following a normal delivery and 96 hours following a cesarean delivery.
Plans may not require health care providers to obtain authorization from the plan for prescribing the hospital stay.
Group plans are forbidden from charging higher individual premiums based on personal health-related factors or conditions.
This is quite different, as you probably know, from personal health insurance plans. With individual insurance plans, insurance providers are allowed to mandate premiums based on an individual’s health.
- COBRA: CERTIFICATE OF COVERAGE
Group health insurance plans must automatically issue certificates of creditable coverage — at no charge — when an employee becomes eligible under the Consolidated Omnibus Budget Reconciliation Act (COBRA). This automatic certificate must reflect the most recent period of continuous coverage.
If an employee issues a request for a certificate, it should reflect each period of creditable coverage within the prior 24 months. The certificate does not, however, have to reflect more than 18 months of continuous health coverage without a significant break. If you remember from point #1, 18 months is the longest possible pre-existing condition exclusion period.
Group health insurance can be a sea of complexity at times, but if you have knowledge and accessible, expert guidance, you are able to successfully navigate your company and your team past the turbulence and into calm waters.
To further refine your insurance smarts, head to HealthFirst University. Our employee benefits brokers are nice, but their knowledge is nicer — and they’re more than willing to share with you!
Speaking of turbulent waters, the rise of premiums has been rocking the boat of health insurance lately. But are there circumstances in which the costs of premiums fall? Check back soon or subscribe for the ins and outs, us and downs & ebbs and flows of insurance premiums!