HIPAA stands for the Health Insurance Portability and Accountability Act of 1996. It is a federal law written with the intent to provide improved portability and continuity of health insurance coverage. (While the law applies to the health plans of most employers, certain non-federal governmental self-funded plans are allowed to opt out of most of the HIPAA provisions.)
In brief, the law:
- Places limitations on the pre-existing medical condition exclusion clauses health plans can include in their contracts;
- Guarantees enrollment to individuals if certain conditions are met, and stipulates they cannot be charged more for benefits offered by a health plan, regardless of health status;
- Under certain circumstances requires health insurance companies to offer individual insurance on a guaranteed basis once an individual exhausts their COBRA coverage;
- Provides new rights to employees, allowing them to enroll in the health coverage of their employer if they have lost other coverage, or if they acquire a new dependent; and
- Provides credit to individuals for prior health coverage and requires health plans to furnish participants with Certificates of Creditable coverage.
HIPAA preserves the right of the individual states to regulate health insurance, including their authority to provide greater protections than those that HIPAA offers.
Note: HIPAA is particularly important in your decision whether or not to elect COBRA coverage because it may affect when other coverage would become available to you and the types of other coverage available to you, including the extent to which coverage can be restricted under a “pre-existing condition exclusion.”
For more information from the federal government on HIPAA, see the federal government’s website:
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