Learn about HIPAA Law

You may not be 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 as an amendment to help protect more workers and their loved ones by limiting new employers from excluding coverage for preexisting conditions, prohibiting discrimination against employees and their family members based on any preexisting conditions, and providing new rights to individuals who lose their coverage.

HIPAA also protects patients’ paper and electronically stored medical information through the Privacy Rule, while the Security Rule regulates the confidentiality of electronically stored medical information only. Both of these provisions were implemented by the U.S. Department of Health and Human Services.

HIPAA’s effect on Preexisting Conditions

Before HIPAA, many employers’ group health plans denied new employees coverage of preexisting conditions that existed at the time of enrollment. Now under HIPAA law, the cutoff date has been mandated to 6 months. This means that if the employee received any medical advice, diagnosis, treatment or care pertaining to the condition during the 6 months prior to enrolmment, the preexisting condition exclusion can only be applied then.

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 for most people, this exclusion period cannot exceed 12 months. 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.

Protection against Discrimination

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

New Special Enrollment Rights

Individuals who held coverage previously now have an opportunity to enroll outside of the enrollment period if they lost coverage based on certain situations.

Some these situations include:

  • Reduction in work hours

  • Spouse’s death

  • Spouse's employment ending

  • Separation or Divorce

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