Healthcare regulations often interact and COBRA regulations are no exception. Employer requirements under COBRA regulations overlap with employer requirements under HIPAA regulations and under the Affordable Care Act (ACA) as well.
In fact, COBRA is even more relevant today as we prepare to implement the ACA's provisions in the coming years. Employers and healthcare plan sponsors will need to determine how to transition from their current practices for continuing coverage during leaves of absence and at termination of employment to new practices on the basis of law changes.
COBRA and HIPAA Regulations
"HIPAA portability also had new regulations finalized in 2004, effective for plan years beginning on or after July 1, 2005, which meant that was 2006 change." Tonie Bitseff explained in a recent BLR webinar. "These rules just clarified existing rules. We’ve had certificates of creditable coverage for quite a while. They need to be provided automatically when plan coverage ends. It requires eligibility information regarding dependents, and the plans have to have written procedures on how to obtain a certificate, including contact information." Since both laws become most relevant at the time of transition, it’s easy to see how they overlap.
Additionally, preexisting conditions come into play during this time. "The certificate of creditable coverage is important because there are preexisting condition exclusions currently that may apply and you need to provide notice of that." The preexisting condition exclusions can only be provided for a year – and if there was creditable coverage, it counts against that year.
As such, the certificate of creditable coverage and the preexisting condition exclusion work together. In fact, HIPAA prohibits plans from imposing a preexisting condition exclusion unless written general notice of such preexisting condition exclusion is provided to the participant. General notice must be provided as part of any written application materials for enrollment distributed by the plan. If there are no written application materials, then the notice must be provided by the earliest date following a request for enrollment.
Do you already comply with both COBRA and HIPAA requirements? Do you know how these will be affected when all of the provisions of the Affordable Care Act go into effect? For more information on COBRA compliance and how HIPAA regulations are affected when the Affordable Care Act is implemented, order the webinar recording of "COBRA Compliance: HR’s Obligations and Solutions." To register for a future webinar, visit http://catalog.blr.com/audio.
Attorney Tonie Bitseff is a member of Nixon Peabody LLP’s Labor & Employment practice group. She is an experienced ERISA lawyer and regarded a leading authority on HIPAA, COBRA, and health plan compliance.