Moving from an Employer-Sponsored Group Health Plan to an Individual Health Plan

I am HIPAA-eligible because I:

• had at least 18 months of insurance coverage without a gap of 63 days or more (a significant gap in coverage);
• used up my COBRA options or similar state continuation coverage;
• was most recently enrolled in an employer-sponsored group plan; and am not eligible for Medicaid, Medicare, or coverage through another employer-sponsored plan.

Can a plan refuse to enroll me just because I am sick?

It depends. HIPAA-eligible individuals are guaranteed some form of coverage in the individual market. The kind of insurance you can get depends on where you live. In some states, you will be eligible for all individual health plans, but in others, you will be restricted to a specific plan. Contact your state insurance department for more information. You can find contact information at http://www.naic.org/state_web_map.htm. 

Can a plan charge me more based on my health?

Yes, but . . . The federal government does not regulate insurance premiums in the individual market. On the other hand, some states do not allow insurers to charge higher premiums based on health. Contact your state insurance department for more information. You can find contact information at http://www.naic.org/state_web_map.htm.

Can a plan refuse to cover my illness for a period of time just because my illness was preexisting?

It depends. HIPAA-eligible individuals are guaranteed some form of coverage in the individual market. The plans that you are guaranteed cannot refuse to cover an illness that you had before joining the plan just because the illness was preexisting. However, your new insurance plan may not offer coverage for all of the same benefits covered by your former plan. Check your policy to see what benefits your plan will cover. The kind of insurance that will protect you depends on where you live. In some states, all individual health plans will protect HIPAA-eligible individuals, but in others, you will be restricted to a specific plan. Contact your state insurance department for more information. You can find contact information at http://www.naic.org/state_web_map.htm.

I am not HIPAA-eligible because I:

• did not have 18 months of coverage;
• did not exhaust my COBRA options or similar state continuation coverage;
• was not most recently enrolled in an employer-sponsored group plan; or
• may be eligible for Medicare, Medicaid, or another employer-sponsored plan.

Can a plan refuse to enroll me just because I am sick?

Yes, but . . .  Individuals who are not HIPAA-eligible may be denied coverage for health reasons. Nevertheless, some states do not allow insurers to deny coverage based on health. Contact your state insurance department for more information. You can find contact information at http://www.naic.org/state_web_map.htm.  

Can a plan charge me more based on my health?

Yes, but . . . The federal government does not regulate insurance premiums in the individual market. On the other hand, some states do not allow insurers to charge higher premiums based on health. Contact your state insurance department for more information. You can find contact information at http://www.naic.org/state_web_map.htm.

Can a plan refuse to cover my illness for a period of time just because my illness was preexisting?

Yes, but . . . For individuals who are not HIPAA-eligible, there are no federal restrictions on how long an individual health plan may refuse to cover an illness you had before you joined that plan. However, some states do impose restrictions on this practice. Contact your state insurance department for more information. You can find contact information at http://www.naic.org/state_web_map.htm.

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