Health
Insurance Portability and Accountability Act (HIPAA)
Signed into law in 1996, HIPPA, also known as the Kennedy-Kassenbaum Bill, remains
a cumbersome piece of legislation for health plans and employers alike. Individuals and
employees stand to benefit most from the Act through greater access, portability and
renewability of health coverage especially for those who have pre-existing medical
conditions or who move from one job to another or to self-employment.
The key points of the Act are:
For Employees
Limits on exclusions for pre-existing conditions, including the elimination of
pregnancy as a pre-existing condition.
A more consumer-friendly definition of the pre-existing condition clause: "A
condition for which medical advice, diagnosis, care or treatment was recommended or
received within the six month period prior to the enrollment date." For example: if
you were aware that you have a medical condition, but had not sought care during the past
six months as indicated above, your illness would not be considered a pre-existing
condition.
New enrollment rights for and distinguishing of individuals who involuntarily lose
coverage or have a new dependent (special enrollee) from those who are late enrollees.
Credit for prior group health coverage toward any waiting period for health benefits at a
new employer.
Guaranteed issue of health insurance for employees moving from a group plan to an
individual plan provided certain requirements are met.
Changes in federal COBRA laws such that newborns and adopted children are not
"qualified beneficiaries" and the availability of extensions for disabled
beneficiaries and others.
the creation of medical savings accounts (MSAs) or IRA-like accounts for the payment of
medical expenses associated with high-deductible plans with high out-of-pocket maximums.
For Employers (with 2 or more employees)
Guaranteed availability of health insurance for small employers and renewability of
health insurance for small and large employers provided certain requirements are met.
Shared responsibility with health plans for the issuing of certificates of credible
coverage to employees leaving a health plan and for notifying new and existing employees
of the changes in pre-existing condition rules.
