HIPAA (Health Insurance Portability and Accountability act)

 The Health Insurance Portability and Accountability act( HIPAA) first came into the scene on August 21, 1996. HIPAA was the result after the following laws were amended:

-        Internal Revenue Code of 1986(IRC),

-        Employee Retirement Income Security Act of 1974(ERISA), and

-        Public Health Service Act (PHSA).

The main intent of HIPAA is to improve the portability and security of healthcare coverage in the group and individual insurance markets and group health plan coverage provided in connection with employment. The HIPAA provisions limit the use of preexisting condition exclusions, guarantee access to health care coverage and renewability of coverage, establish special enrollment periods, and prohibit discrimination on the basis of health status. All group health plans are covered by HIPAA, except plans covering fewer than two employees, and nonfederal governmental plans that elect to be excluded. If a plan administrator does not comply with HIPAA requirements regarding providing certificates of coverage, limiting preexisting condition exclusion periods, crediting prior coverage toward the satisfaction of a preexisting condition exclusion periods, the plan administrator may be subject to a penalty.

HIPAA limits pre-existing condition exclusion periods to 12 months, and plans must reduce that period by the length of the period during which an individual had prior creditable coverage. HIPAA prohibits pre-existing condition limits for pregnancy, newborns, and children who are newly adopted or placed for adoption. The HIPAA provisions relating to preexisting condition exclusion periods become effective for plan years beginning on or after July 1, 1997. For collectively bargained plans, the effective date is the later of July 1, 1997, or the ending date of the last agreements pertaining to the plan. Starting on June l, 1997, a certificate of creditable coverage must automatically be issued when an individual will lose coverage under the plan. Therefore, a certificate must be issued when COBRA (Consolidated Omnibus Budget Reconciliation Act) qualifying events occur, COBRA continuation coverage ends, or continuation of coverage offered as an alternative to COBRA or in compliance with a state law ceases. The certificate will state the period during which the individual and his or her dependents had coverage including continuation coverage under COBRA or coverage provided as an alternative to COBRA or in compliance with a state law. The certificate provides the documentation of "creditable coverage" that a new plan needs in order to give the individual credit for the prior coverage. The plan administrator will be required to issue the certificates unless an agreement has been reached between the plan administrator and issuer/insurer for the issuer/insurer to provide the certificates. The dependents are entitled to a written certificate of creditable coverage. Loss of eligibility for coverage includes a loss of coverage due to any of the following events: legal separation; divorce; death; termination of employment; reduction in the number of hours of employment; and any loss of eligibility after a period that is measured by reference to any of the foregoing.  Under HIPAA, a group health plan may not establish rules for eligibility to enroll or require any individual to pay a premium or contribution that is greater than the premium or contribution for a similarly situated individual enrolled in the plan based on an individual's health status.