Learn More about HIPAA

Many are not aware that the Health Insurance Portability and Accountability Act (HIPAA) is actually a 1996 amendment to the Employee Retirement Income Security Act (ERISA).

HIPAA was added to help protect more workers and their families by limiting new employers from excluding coverage for preexisting conditions, banning discrimination against employees and their dependent family members based on any preexisting conditions, and providing new rights to individuals who lose their coverage to enroll in a group health plan.

HIPAA also protects patients’ electronically stored medical information through the Privacy Rule, which was implemented by the U.S. Department of Health and Human Services.

HIPAA’s effect on Preexisting Conditions

Prior to HIPAA, many employers’ group health plans denied new employees coverage of preexisting conditions that endured at the time of enrollment. Now under HIPAA, the preexisting condition exclusion can only be applied if the employee received any medical advice, diagnosis, treatment or care pertaining to the condition during the 6 months prior to enrollment. But, if the employee did receive any medical advice, diagnosis, treatment or care regarding his or her condition in the previous 6 months, the plan may still impose a preexisting condition exclusion. If your preexisting condition is excluded from the plan, the good news is that this exclusion period cannot exceed 12 months for most people. Some people may be able to reduce this 12 month exclusion period by receiving “creditable coverage” for the time they held health coverage prior to their new job.

Because of these changes, employees no longer have to worry about losing coverage on preexisting conditions when switching jobs.

Discrimination Protections

HIPAA prohibits individuals from being excluded from coverage or denied benefits based on health-status related factors. This means that a health plan cannot deny an employee medical coverage based on his or her medical history, genetic information, disability, or claims experience.

Special Enrollment Rights

Individuals who previously held coverage now have an opportunity to enroll outside of the enrollment period if they lost coverage based on certain situations. These situations include but are not limited to:

  • Spouse’s employment ending

  • Spouse’s death

  • Divorce or separation

  • Reduction in work hours

It is important to remember that although HIPAA provides a wide array of new rights, it does not require that employers provide health coverage. HIPAA is only a set of guidelines for employers who do choose provide health coverage.