HIPAA Portability Rules Finalized
While many have already been dealing with the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), regarding either portability or privacy,
before the dust can settle the Centers of Medicare and Medicaid Services (CMS),
the Internal Revenue Service and the Employee Benefits Security Administration
jointly posted final rules and proposed regulations. The effective date for the
rules was February 28, 2005.They
become applicable for plan years beginning on or after July 1, 2005.
The 81 pages of final regulations and 26 pages of proposed
regulations contain a lot of important information and clarifies issues
regarding preexisting condition limitations, creditable coverage, special
enrollment periods and related areas that have arisen since the interim rules
were published.
Special Enrollment
Individuals have a HIPAA special enrollment right under
their employer's group health plan if they initially refused to enroll because
they had other health coverage and later lose that other coverage.The final regulations clarify the special
enrollment rights in several areas.
o Lifetime
Limit. If an individual exceeds lifetime limits on all benefits
under the plan, this constitutes a loss of coverage. A plan must allow 30 days
after a claim is denied due to lifetime limits for the individual to apply for
special enrollment rights.
o HMO
Service Area. A loss of HMO coverage because of a change in residence or
worksite and there is no other coverage available.
o Individual
becomes an employee's dependent.This
would occur through marriage, birth, adoption or placement for adoption and
also when an employee's dependent loses other coverage.
o Termination
of Employer Contributions.This
constitutes a loss of coverage under the new rules allowing an individual to
obtain other health coverage. This provision does not apply towards COBRA, only
for current employees or dependents of current employees.The regulations clearly state that loss of
coverage for special enrollment rights does not constitute failure to pay
premiums; therefore if an individual fails to pay their portion of their
premiums, it would not allow special enrollment rights.
Notice of Special Enrollment
The notice regarding Special Enrollment must be offered at
or before the time enrollment is offered under the plan. Special Enrollment
information is required to include information advising employee what office or
title to contact at employer.
Definition of Dependent
"Dependent" is now defined as any individual who is, or may
become, eligible for coverage under terms of a group health plan because of a
relationship to a participant.This is
intended to clarify, for purposes of HIPAA, that the terms of the group health
plan determine which individuals are eligible for coverage as a dependent under
the plan.
Proposed Rules, Special Enrollment
A portion of the Proposed Rules
reviews tolling of special enrollment rights, which applies to individuals
whose coverage ceased yet were not provided a certificate on or before the date
coverage ended. The tolling rules apply in determining the break in
coverage.The 30-day period begins on
the first day after the date the certificate is provided or 44 days after
coverage ends, whichever is earlier.
In addition, the plan may require completion of additional
enrollment materials within a reasonable period of time after the end of
the special enrollment period. However, the deadline for information the
individual is obtaining does not give the plan the option to deny special enrollment
rights, i.e. obtaining a Social Security Number for a newborn.
Pre-Existing Condition Exclusion Rules
º
Look Back Period. The exclusion/limitation relates to a pre-existing condition for
which medical advice, diagnosis, care or treatment was received or recommended
within the 6-month period ending on the enrollment date.
º
Does Not Exceed 12 Months. The exclusion or limitation period does not
exceed 12 months (18 months for a late enrollee) beginning on the enrollment
date.
º
Creditable Coverage. The exclusion/limitation period is reduced by the number of days
an individual had creditable coverage without a significant break in
coverage on the enrollment date.
If a plan imposes a pre-existing condition, it must provide
a written "General Notice of Pre-existing Condition" before it can
impose apre-existing condition
exclusion.The notice must be provided
as part of any written application distributed by the plan for enrollment.If not provided then, it must be provided
the earliest date following a request for enrollment, in a reasonable and
prompt fashion.The notice must provide
a description of the look back period, the exclusion/limitation period, how the
plan reduces the exclusion/limitation period, rights of individuals to
demonstrate creditable coverage and any applicable waiting period as well as a
contact name for assistance.
Also, if the plan imposes a pre-existing condition, an "Individual
Notice of Period of Pre-existing Condition" must be provided once the
determination has been made.The plan
must provide the individual written notice of the length of pre-existing
condition that remains after offsetting for prior creditable coverage.This notice is not required if the plan does
not impose any pre-existing conditions.
If the plan requires an employee declining coverage to put
into writing the reason for declining is for other coverage, the plan or issuer
is required to provide a statement, in writing, of the consequences of failure
to provide the written reason of declining coverage.If the employee fails to provide the written statement, the
employer is not required to allow the special enrollment rights.
º
FMLA If an employee has taken a leave under the
Family and Medical Leave Act (FMLA) and does not continue coverage under the
group health plan for any part of the leave, the 63-day break-in-coverage
period would not begin until the end of the FMLA leave.
Model Certificate.
The Certificate of Group Health Plan Coverage (Model
Certificate) has additional required information; therefore, employers should
no longer use the previous Model Certificate. The regulations include a sample
certificate that could be used which illustrates the additional required
information.
Infinisource clients who add HIPAA Certificate
Administration to their COBRA administration solution quickly appreciate the
result-effortless and cost-efficient compliance. HIPAA has forced employers,
carriers and health care professionals to add more administrative tasks to
their workload. Make sure you are providing HIPAA Certificates of Creditable
Coverage properly and remove even more from your to-do list with Infinisource
HIPAA Certificate Administration. For more information on adding this service
please call 800-779-6384, email solutions@infinisource.net
or visit our website at www.benefitsolved.com.
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