Frequently Asked Questions - HIPAA
In 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA). Before 1996 some individuals were afraid to change jobs for fear of losing their health insurance. This law was created so individuals would have the ability change jobs without losing coverage. The 1997 Minnesota legislature made several changes to conform with federal law.
An individual with a pre-existing condition who has group health coverage may obtain new coverage with a reduced, or no, exclusion period for a pre-existing condition. The new coverage must be either:
- group coverage
- an individual policy from the same health carrier that offered the previous group coverage
- or the special group to individual portability coverage established by each state.
Q. What is a "pre-existing condition"?
A. A pre-existing condition is a condition or illness the individual has up to 6 months before becoming enrolled in a health plan, for which medical advice, diagnosis, care, or treatment was recommended or received.
Pregnancy can be treated as a pre-existing condition only when a person:
- with no group coverage applies for coverage in the individual market, or
- leaves group coverage and applies for individual coverage with a different carrier.
Genetic information cannot be used as a pre-existing condition.
Q. What is a"pre-existing condition exclusion"?
A. An exclusion means that your health insurance will not pay for care related to your pre-existing condition. An exclusion can be for up to 12 months, and up to 18 months if you are a late entrant. If you have maintained continuous coverage, your new plan must give you credit for your prior coverage. Preexisting condition exclusions cannot be applied to properly enrolled newborns and adopted children. Preexisting condition exclusions cannot be applied to children under 19 years old (however, policies in effect on or before March 23, 2010 for individual coverage do not have to follow this unless the policy changes significantly).
Q. What is "portability"?
A. This is the ability to change from one plan to another under certain circumstances.
Q. What is "qualifying coverage"?
A. Qualifying Coverage means either individual or employer-sponsored comprehensive group health coverage, and also includes medical assistance, Medicare, Indian Health Service, and other similar health coverage programs.
Coverage that is not qualifying coverage provides benefits limited to a specific illness or situation, such as no fault automobile, disability coverage, coverage for a specific disease (such as cancer), dental coverage only, and other similar limited coverage programs.
Q. What is "continuous qualifying coverage"?
A. Continuous Qualifying Coverage means that a person maintains qualifying coverage without any gaps greater than 63 days. A gap greater than 63 days is also termed as a "Significant Break in Creditable Coverage".
Q. What is "creditable coverage"?
A. Creditable Coverage means the pre-existing condition exclusion is reduced one month for every month that a person had coverage in a previous plan as long as the gap in coverage between the previous plan and the new plan is 63 days or less.
Q. What is "certification of creditable coverage"?
A. Certification of Creditable Coverage is a statement showing your dates of coverage. This statement acts as a "receipt" and is automatically given to any covered person by an insurer, health maintenance organization, or plan administrator when the person loses coverage for any of several reasons:
- employment is terminated
- hours are reduced
- death of the covered employee
- other reasons
With certification, when a person is enrolled in a new plan of coverage, he or she can apply creditable coverage against any limitation for a pre-existing condition.
Q. What is "receiving creditable coverage"?
A. Receiving Creditable Coverage means that a new employer or issuer may either: (1) accept the person's previous qualifying coverage without regard to the benefits covered, or (2) evaluate the benefits on a category-of-benefit basis.
Minnesota law does not permit an insured plan to use a "category-of-benefit" evaluation of previous coverage, although self-insured plans may do so.
Q. What does "category-of-benefits" mean?
A. Category-of-Benefits means that an employer can decide creditable coverage for any of five different benefits and apply a different pre-existing condition exclusion for each category. For example, if vision services were not covered under the previous coverage, the new employer could apply a pre-existing condition exclusion for vision coverage for 12 months. If an employer uses the category-of-benefit method to accept creditable coverage, the employer must have a policy that treats all employees equally. Only a self-insured employer can use this method in Minnesota.
Q. Who is an "eligible individual?"
A. Eligible Individual means a person who works at least 20 hours per week and is eligible to participate in the employer's health plan under the employer's criteria. The criteria may include length of service, such as probationary period, and the number of regularly scheduled hours.
Q. What is a "waiting period?"
A. Waiting Period means:
- For an employee or dependent - this may also be known as a "probationary period". This is the time between the date you are hired and the date you are eligible to join the employer's group plan.
- For an individual - the period of time following application for health coverage until the coverage becomes effective but only if, upon being accepted for coverage, the individual actually becomes covered. If the individual applies for coverage but then decides not to enroll, the time between the application and the decision to not enroll is counted toward a significant break in coverage.
Q. Who is a "late entrant"?
A. Late Entrant means a person who asks to enroll at a time other than:
- the initial enrollment period, provided that the initial enrollment period is at least 30 days
- an open enrollment period
- a special enrollment period
A late entrant either did not have or voluntarily dropped qualifying coverage.
Q. What is an "initial enrollment period"?
A. Initial Enrollment Period means the first time that a new employee and dependents are eligible to enroll in an employer's health benefit plan.
Q. What is an "open enrollment period"?
A. Open Enrollment Period means a time each year when employees and dependents can join the employer's health benefit plan.
Q. What is a "special enrollment period"?
A. Special Enrollment Period means a time when certain employees, current dependents, or new dependents can enroll in the employer's health benefit plan after the initial enrollment period. Employees and current dependents must have been covered under other qualifying coverage at the time of the initial enrollment period. These employees and current dependents must also have lost their qualifying coverage because of legal separation, divorce, death, termination of employment, reduction of hours of employment, or exhaustion of COBRA or state continuation coverage. New dependents, including a new spouse, newborn or adopted child are also eligible for special enrollment. Special enrollment must be requested within 30 days of losing the prior qualifying coverage, or of the marriage, birth, or adoption. In Minnesota, a newborn can be added to a fully insured health plan at any time. The 2009 Children's Health Insurance Reauthorization Act (CHIPRA) requires a special enrollment opportunity when an employee or dependent on Medicaid or CHIP loses coverage. They must be eligible for employer coverage and must request that coverage within 60 days of losing coverage.
Q. Must my employer offer me health coverage?
A. No. There is no federal or state law that requires an employer to offer employees health coverage. If an employer offers health coverage, the employer must cover each employee who meets the employer's eligibility criteria. Pre-existing condition limitations may be imposed on eligible employees and dependents.
Q. Must an insurance company or health maintenance organization offer me individual (non-group) health coverage?
A. No. There is no federal or state law that requires a health plan company to offer an individual health plan to any person. Under Minnesota law, if you are already covered under a group health plan issued by an insurer or health maintenance organization (HMO), the insurer or HMO must issue you an individual policy if you lose group coverage. You must have maintained continuous qualifying coverage and continuation/COBRA coverage must not be available.
Q. What is "guaranteed renewal"?
A. Guaranteed Renewal means:
- In the Group Market - that a health carrier must renew its contract with the employer (subject to certain exceptions).
- In the Individual Market - that a health carrier must renew its contract with the individual (subject to certain exceptions).
Q. Where can I find out if I am eligible for portability?
- Your employer's human resource office
- Your health carrier or your certificate of coverage
- Minnesota Comprehensive Health Association
1-866-894-8053 (TTY 1-800-841-6753)
- Minnesota Department of Commerce
651-296-2488 OR 1-800-657-3602
- U.S. Department of Labor
Employee Benefits Security Administration
Kansas City Regional Office
816-426-5131 OR 1-866-444-3272
- U.S. Department of Health and Human Services
HIPAA Hotline: 1-866-627-7748 (voice menu only)
For more information, or to file a complaint, contact the MCS at 651-201-5100 or 1 800-657-3916.