HIPAA Portability Regulations Require Changes

Just when employers thought they had the process completed for the Health Insurance Portability and Accountability Act of 1996 (HIPAA), more changes emerge requiring a review of existing processes and notices.

HIPAA contains various portability requirements including limits to pre-existing conditions and special enrollment rights.  Three federal agencies that are responsible for enforcing HIPAA's portability requirements--Internal Revenue Service (IRS), Department of Labor (DOL) and the Department of Health and Human Services (HHS) issued new and proposed regulations on December 30, 2004. These new regulations necessitate changes to participant notices and communication, and may involve changes to plan documents beginning with plan years on and after July 1, 2005. 

Infinisource, Inc. has researched the HIPAA regulations and developed a solution to ensure that HIPAA clients will remain compliant with the new requirements.  HIPAA clients will be provided with updated information, including direct contact from a HIPAA representative to personally assist with the changes prior to the compliance date of their plan year.

Infinisource recommends any employers handling HIPAA Portability on their own should thoroughly review their HIPAA notices to make sure it adheres to all the new requirements. Employers that have their carrier providing the HIPAA notices, on their behalf, should verify that all changes, based upon the final and proposed regulations, are being addressed. 

For those unfamiliar with the recent changes, below is a brief overview of what actions the regulations are requiring.

Two of the most significant issues plan administrators must be aware of are checking for pre-existing condition exclusions or limitations under their group health plan, and then including them in their plan documents and summary plan description (SPD). It is important to have consistent information in both documents. In addition, the Certificate of Group Health Plan Coverage (Model Certificate) has additional required information, and employers should no longer use the previous Department of Labor Model Certificate.

Notice of Special Enrollment

Anyone eligible for the group health plan is required to be sent a notice regarding Special Enrollment.  This is to be provided before, or at the time, enrollment is offered under the plan. Special Enrollment information provided in the Summary Plan Description (SPD) alone, is not considered sufficient--a written notification is necessary.

Creditable Coverage Certificate

A creditable coverage certificate is required to be provided when a participant has lost coverage for any reason. A plan must have written procedures for individuals to request and receive creditable coverage certificates.

Pre-Existing Condition Exclusion Rules

If a plan imposes a pre-existing condition, it must provide a written "General Notice of Pre-existing Condition" before it can impose any pre-existing condition exclusion.  The notice must be provided as part of any written application distributed by the plan for enrollment.

Once creditable coverage periods have been determined, an Individual Notice of Pre-Existing Condition Exclusion Period is required to be generated if the participant has time remaining to satisfy their pre-existing condition exclusion.    This notice must include the number of days of creditable coverage that has been accumulated, the number of days remaining to satisfy the pre-existing condition exclusion, and the exact date the exclusion period will be satisfied. 

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 of creditable coverage on or before the date coverage ended. The Special Enrollment period does not begin until the certificate of creditable coverage is received or 44 days after coverage ends, whichever is earlier.

Employers can also receive detailed information about HIPAA by visiting http://www.cms.hhs.gov/hipaa/hipaa1/default.asp.

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In this Issue:

• HIPAA Portability Regulations Require Changes
• Certification in Flexible Compensation awarded to Infinisource employees following a rigorous examination
• COLDWATER -- Infinisource, Inc. has named Rich Glass as its Chief Compliance Officer.

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