HIPAA - Preexisting Conditions
Revised February 2009
Note: This information was developed to provide consumers with general information and guidance about insurance coverages and laws. It is not intended to provide a formal, definitive description or interpretation of Department policy. For specific Department policy on any issue, regulated entities (insurance industry) and interested parties should contact the Department.
The Health Insurance Portability and Accountability Act (HIPAA) provides protections for people who have preexisting conditions. A preexisting condition is any medical condition that a person has before being enrolled in an insurance plan.
This HIPAA law helps protect your health insurance benefits by:
- limiting exclusion periods for preexisting conditions;
- lowering your chances of losing your existing coverage or of being discriminated against because of your health;
- providing protections for you when you change jobs;
- allowing you and your dependents special enrollment rights under your employer's health plan under certain circumstances;
- providing you guaranteed access to individual coverage through the Illinois Comprehensive Health Insurance Plan (ICHIP) if you lose your employer's plan and have no other coverage available;
- guaranteeing renewability of individual health insurance coverage.
NOTE: Beginning June 1, 2009, a new Illinois law (Public Act 95-0958) will significantly change pre-existing condition coverage requirements for dependents. To determine if your dependent might benefit from this law, see the Department's fact sheet on Dependent Coverage.
HIPAA limits the time you can be denied coverage for a preexisting condition under your employer's health insurance plan. Under HIPAA, an employer health insurance plan can deny coverage for a preexisting condition only if the employee or dependent is diagnosed, receives care or treatment, or has care or treatment recommended in the 6 months before the enrollment date.
Note: Pregnancy cannot be denied as a preexisting condition by an employer's insurer. In addition, preexisting conditions cannot be applied to newborns, adopted children under age 18 or a child under age 18 placed for adoption as long as the child become covered under the health plan within 30 days of birth, adoption or placement for adoption, and provided the child does not incur a subsequent 63-day or longer break in coverage.
The length of time coverage can be denied for a preexisting condition under HIPAA is limited to no longer than 12 months (18 months if you are a late enrollee). This time can be reduced or eliminated if you were covered by previous health insurance (which qualifies under HIPAA as creditable coverage) and if there was not a break in coverage between the plans of 63 days or more.
You must enroll in the employer's health plan when first eligible; you may not be allowed to do so at a later date. If you are allowed to enroll at a later date, you will be considered a late enrollee and you may be subject to the 18 month preexisting waiting period.
Note: There are special enrollment provisions which allow you to enroll later under certain circumstances which will be discussed later in this Fact Sheet.
Whenever you obtain health insurance coverage through an employer group, you should submit a "Certificate of Creditable Coverage" for each plan under which you were previously covered. Creditable coverage includes most health coverages, including COBRA, a health insurance policy or an HMO, Medicaid, Medicare, the Indian Health Service, TRICARE, the Peace Corps, a state high-risk pool (ICHIP) or a state or local governmental public health plan. You should receive a "Certificate of Creditable Coverage" whenever you lose health coverage for any reason. If you do not receive one, you may request it from the insurer. If you are unable to obtain a "Certificate of Creditable Coverage," the new employer sponsored health insurance plan should accept other proof of coverage such as pay stubs showing payroll deductions or canceled premium checks.
The new plan will give you credit for the time you were covered under previous health plans so that if you had at least 12 months of creditable coverage without a significant break (63 days or more in a row), no preexisting condition exclusion can be applied to your new coverage.
Note: CREDITABLE COVERAGE DOES NOT APPLY when you buy INDIVIDUAL HEALTH INSURANCE, with the EXCEPTION of HIPAA CHIP. If you buy individual health insurance, you will be required to meet specified time requirements (up to 24 months) prior to benefits being paid for preexisting conditions.
Example 1: You were covered by an employer group plan for two years before leaving your job. You acquired coverage under your new employer's group plan; however, there was a break between the two plans of 45 days during which you had no health insurance. Since the break in coverage did not exceed 63 days, the new insurer must credit you for two years of coverage and cannot apply a preexisting condition limitation.
Example 2: You were covered by an employer group for 7 months before leaving your job. You acquired new coverage under your new employer within ten days of losing your old plan. The new plan must credit 7 months to the preexisting condition limitation, leaving you a maximum of 5 months during which those conditions may be limited or denied.
Example 3: You were covered by an employer group for three years, at which time you lost your job and insurance coverage. You did not get a new job or insurance until 6 months later. Since you had a break in coverage which exceeded 63 days, preexisting condition limitations may be applied under the new plan.
Protection Against Losing Existing Coverage
HIPAA defines a "group" as an employer group of two or more employees. Under the law, all employer groups must have the option of renewing coverage with the insurer and coverage can only be canceled in certain instances.
HIPAA defines a "small employer group" as a group of 2-50 employees. An insurer cannot refuse to sell to small employers (if the insurer sells small group coverage) and must cover all employees and dependents, regardless of health conditions, who are eligible under a small employer's plan.
Protections Provided When Changing Jobs
As stated earlier, preexisting condition exclusion periods are now limited under the new law. This allows workers to change jobs without being penalized for existing health conditions by their new employer sponsored health insurance plan. When you change jobs, you must be allowed to enroll in the employer sponsored health plan, regardless of your health conditions, if you enroll when first eligible.
It is important to note that HIPAA does not require employers to offer health insurance to employees. Your new employer may not provide health insurance coverage at all, or the benefits may differ from your previous employer's plan.
Your new employer may have a waiting period before benefits begin; however, this waiting period is not considered a break in coverage when determining continuous coverage.
The cost of health insurance may also vary from employer to employer. HIPAA does not set any cost guidelines for premiums. However, you cannot be charged more than other members of your group because of health conditions.
Insurers are required to provide for special enrollment periods during which certain individuals are allowed to enroll in the plan even if they did not enroll when first eligible.
If you did not enroll in your employer's health plan when you were first eligible because you were covered under other insurance, you may enroll under a special enrollment period if you lose the other coverage. You and your eligible dependents must be allowed to enroll if you apply within thirty days after loss of the other coverage.
You may also enroll under a special enrollment period if you get married, have a baby, adopt a child or have a child placed with you for adoption. You, your spouse, and your dependent (through birth, adoption or placement for adoption) may be added to coverage under special enrollment if you apply within thirty days of the marriage, birth, adoption or placement for adoption.
Guarantee Access to Coverage When You Lose Group Coverage (HIPAA CHIP)
If you lose your group coverage, including expiration of your COBRA or Illinois Continuation Coverage, and you have no other coverage available, you may apply to the Illinois Comprehensive Health Insurance Plan (ICHIP). ICHIP offers the HIPAA CHIP plan for individuals who have lost their group coverage and cannot obtain other health insurance coverage through a group or individual policy. HIPAA CHIP has no preexisting condition exclusions.
To be eligible for HIPAA CHIP, you must:
- be a resident of Illinois;
- have at least 18 months of creditable coverage;
- have most recent creditable coverage provided under a group plan, governmental employee plan or church plan;
- not have a lapse in coverage of more than 90 days since you lost your group plan, governmental employee plan or church plan;
- not be eligible for coverage under a group plan, Medicare Part A or B, or Medicaid;
- not have committed or attempted to commit fraud in obtaining insurance or benefits;
- have exhausted continuation coverage under COBRA or Illinois continuation, if such coverage was available.
For more information about ICHIP, call (866) 851-2751.
Renewability Of Individual Health Insurance
For individuals covered by an individual health insurance policy, HIPAA prohibits an insurer from canceling or nonrenewing the coverage. An insurer may only nonrenew or discontinue an individual health policy for (1) nonpayment of premiums; (2) fraud; (3) termination of all its individual coverage in the market; or (4) loss of membership by the individual in an association under which the coverage was purchased.
For More Information
Call our Consumer Services Section at (312) 814-2427 or our Office of Consumer Health Toll Free at (877) 527-9431 or visit us on our website at Department of Insurance.A copy of the Illinois Health Insurance Portability and Accountability Act, 215 ILCS 97 is available.