The Department of Health and Human Services has issued a final regulation under
the provisions of the 1996 law on health insurance portability that give workers
greater access to group health plan coverage.
For a Limited Time receive a
FREE HR Report "Top 10 Best Practices in HR Management." This comprehensive special report will give you the information you need to know about these current HR challenges and how to most effectively manage them in your workplace.
Download Now"In an era when American workers often change jobs, and even careers,
several times in the course of their lives, it is important that they are able
to respond to the modern workplace without having to fear for their health insurance,"
says HHS Secretary Tommy G. Thompson. "This regulation implements an important
law that will help them do that."
The final regulation implements provisions of the Health Insurance Portability
and Accountability Act of 1996 (HIPAA) that provide greater portability and
availability of group health coverage when workers and family members change
or lose a job.
The provisions set limits on preexisting condition exclusions that could be
imposed and require group health plans and group health insurance issuers to
offer "special enrollment" upon certain life events.
Identical regulations are being issued simultaneously by the Departments of
Labor and Treasury with a joint explanatory preamble.
The regulation
finalizes portions of an interim final regulation published on April 8, 1997,
that limits the use and duration of preexisting condition exclusions imposed
by group health plans and group health insurance issuers. It requires these
entities to offer an immediate "special enrollment" opportunity to
certain individuals who lose eligibility for other group health coverage or
other health insurance, and to otherwise eligible new dependents.
The final regulation, which becomes effective for plan years starting on or
after July 1, 2005, does not significantly modify the framework of the 1997
interim final regulation. However, the in response to comments received during
the public comment period, the final regulation contains features that officials
say are intended to bolster HIPAA's consumer protections while minimizing the
burdens imposed on group health plans and group health insurance issuers. For
example, the final regulation:
- Requires group health plans and group health insurance issuers to include,
concurrently with the certificate of creditable coverage provided to individuals
when they lose coverage under the plan, an educational statement on their
HIPAA rights.
- Includes model language that group health plans and group health insurance
issuers can use for the new educational statement.
- Recognizes health plans maintained by foreign governments, and by the U.S.
government (such as Veterans Administration coverage) as creditable coverage
that can be used to reduce the length of or eliminate a preexisting condition
exclusion.
- Offers sample language that plans and issuers can use to satisfy their obligations
to provide participants notices of preexisting condition exclusions.
- Clarifies that certain plan benefit restrictions are in fact preexisting
condition exclusions that must comply with HIPAA's limitations on such exclusions.
The departments of HHS, Labor, and Treasury also are publishing a proposed
regulation that solicits comments on some potential additional aspects of
HIPAA group health plan requirements. For example, the proposed regulation:
- Would provide an extension of time for individuals to exercise certain HIPAA
portability rights, in situations where the individual must exercise those
rights within a certain number of days after losing coverage, but the individual
is not promptly notified through a certificate of creditable coverage that
he or she has lost coverage.
- Would specify that group health plans and group health insurance issuers
must provide a certificate of creditable coverage when an individual leaves
a group health plan while taking leave under the Family and Medical Leave
Act, and that any period of time during which a person does not have coverage
while under such leave does not count against him with regard to HIPAA's protections.
- Would set forth a mathematical formula for counting the average number of
employees employed by an employer during a year (various HIPAA health insurance
reform provisions require the determination of such an average number).