HIPAA Portability of Coverage
The Health Insurance Portability and Accountability Act (HIPAA) is the federal law that provides and helps protect consumers’ rights to health coverage when transitioning from
- one group health plan to another group health plan,
- a group health plan to and individual policy, and
- an individual policy to a new group health plan.
For consumers in the group market, HIPAA does the following:
- limits preexisting condition exclusions;
- prohibits discrimination against enrollees and potential enrollees based on health factors;
- requires special enrollment opportunities for individuals who lose other group health coverage or gain new dependents, such as a spouse or a child; and
- requires the issuance of certificates of creditable coverage.
For consumers who are HIPAA-eligible and who seek to purchase a policy in the individual market, HIPAA does the following:
- guarantees the right to purchase individual coverage;
- prohibits preexisting condition exclusions for the specified HIPAA policies;
- requires the issuance of certificates of creditable coverage; and
- guarantees renewal of individual health insurance coverage.
Pregnancy cannot be treated as a preexisting condition.
For all consumers in the individual market, HIPAA requires guaranteed renewability of coverage in most situations. This means that an insurance issuer must renew an individual’s policy regardless of the individual’s health status unless the individual no longer wants it. There are several exceptions to this requirement. The exceptions are: fraud, nonpayment of premiums, moving outside the service area of the issuer, ending membership in an association that made the coverage available, and the issuer ceasing to offer coverage in the individual market. (This is explained in 45 Code of Federal Regulations, Section 148.122).
Guaranteed renewability is not the same as portability. Individuals have the right to renew the same policy with the same issuer, but that does not include a right to switch to a new policy or coverage from a different issuer.
Final HIPAA regulations went into effect at the beginning of plan years starting on or after July 1, 2005.
Under the regulations, plans must notify consumers of their HIPAA rights. Model notices of creditable coverage are on pages 78,729 and 78,802 of the December 30, 2004 Federal Register.
The following terms are discussed in a Department of Labor booklet
about HIPAA Health Coverage Portability:
- Creditable coverage
- Guaranteed renewability
- Preexisting condition exclusion
- Significant break (63-day break)
- Special enrollment
In many states, HIPAA-eligible individuals can purchase insurance through high-risk pools, which are state-run programs that offer individual health insurance options to state residents who do not have access to group coverage and who are considered medically uninsurable because of preexisting health conditions. The National Association of State Comprehensive Health Insurance Plans provides links to state high-risk pools.
HIPAA Regulatory and Enforcement Agencies
Non-federal government plans and moving from group insurance to individual HIPAA policies: CMS
Health Insurance Reform for Consumers, CMS (See especially the publication "Protecting Your Health Insurance Coverage")
Health Insurance Reform for Employers, CMS
Private group plans: Department of Labor
HIPAA Fact Sheet (December 2004)
Frequently Asked Questions
Health Coverage Portability
Fully-insured plans: State Insurance Departments
Web sites generally explain which insurers must cover HIPAA-eligible individuals in a state and provide information about state portability laws.