Employment-Based Health Insurance
Individuals may be eligible for coverage through their employment or the employment of their spouse or parent. If an employer offers coverage, generally an individual cannot be turned away or charged a higher premium because of their health status or disability.1
Employers may refuse or restrict coverage for other reasons (such as part-time employment), as long as such reasons are unrelated to the health status of the individual and are applied consistently.
Your Rights and Protection under Employment-Based Health Insurance: HIPAA
If you have private sector job-based coverage,2 you are afforded certain rights and protections. The Health Insurance Portability and Accountability Act (“HIPAA”), passed in 1996, complements state laws in providing protection for employees receiving health coverage from their jobs. Some state laws may offer more generous protections than HIPAA, so be sure to check your state insurance commissioner’s office to inquire about the laws in the state in which you live. These state laws only apply if your plan provides benefits through an insurance company or HMO (an insured plan)3.
Preexisting Conditions Under HIPAA
HIPAA provides important defenses for employees with preexisting conditions like epilepsy looking to start an employment health plan or to switch employment health plans. Under HIPAA, a plan is allowed to look back only six months for a condition that was present before the start of coverage in a group health plan. If you have had epilepsy for many years prior to enrolling in the employment health plan, and you did not receive medical advice, diagnosis, care, or treatment in the six months prior to enrolling in the plan, then your previous history of epilepsy cannot be subject to a pre-existing condition exclusion.
If you have a pre-existing condition that can be excluded from your employment plan coverage (because you were treated in the past six months), then HIPAA limits the pre-existing condition exclusion period (the period during which an employer health plan can limit or exclude the benefit relating to the condition) to 12 months maximum (18 months if you enroll late4).
You can further limit the pre-existing condition exclusion period by showing creditable coverage. Creditable Coverage is a period of prior health coverage, which may be used to offset the length of a pre-existing condition exclusion period. This includes coverage under a group health plan, COBRA, Medicare and Medicaid, or an HMO or individual health insurance policy. However, if you experience a break in health coverage of 63 days or more,5 then you may lose the ability to use this creditable coverage. To avoid a 63-day break in health coverage, you may want to consider COBRA6 coverage (if your prior coverage was a group health plan), buy an individual health insurance policy, or contact your state insurance commissioner’s office to find out if your state has a high-risk pool for people who cannot otherwise get health benefits.
To prove your creditable coverage, your previous group health plan should provide you with a certificate of creditable coverage. This is often a letter from the insurer that shows your prior periods of coverage in a health plan, including dates on which your prior coverage began and ended. You can request a certificate free of charge from your health coverage provider, and you should automatically receive a certificate when you lose coverage or when COBRA coverage ends. It is very important to save this certificate to make any transition easier. If you lose your certificate of credible coverage or did not get one originally, make sure you collect and provide other documents to prove that you had coverage, such as pay stubs that reflect a deduction for health coverage premiums, copies of premium payments, explanation of benefit forms, and verification by a doctor or your former health plan.
If you have previously declined health coverage with your employer, you may be able to enroll in coverage through “Special Enrollment.” Special enrollees must be offered the same benefits that would be available if they were enrolling for the first time. There are two types of special enrollment: 1) upon loss of eligibility for other coverage, and 2) upon certain life events. For instance, if you had a job loss (for whatever reason), or an employer no longer offers you health insurance, these are “life events” that may provide access to insurance if your spouse has employer coverage; you would not need to wait for your spouse’s employer’s open enrollment period to sign up for their policy. Whether you are enrolling in your own employer’s plan or a spouse’s plan under these types of special circumstances or life events, you can request special enrollment for yourself and your dependents. You must request enrollment within 30 days of loss of coverage.
The second type of special enrollment occurs because of certain life events, such as marriage, birth, adoption, or placement for adoption. In this case, new dependents are permitted to request special enrollment within 30 days of such a life event. If one requests special enrollment due to a birth, adoption, or placement for adoption, coverage begins no later than the day of the event. For special enrollment due to marriage or loss of eligibility for other coverage, your new coverage will begin on the first day of the first month after the plan receives the enrollment request (or earlier depending upon an employer plan).
HIPAA Protections Against Discrimination
Under HIPAA, you and your family members cannot be denied eligibility or benefits based on certain "health factors" when enrolling in a group health plan. These health factors include health status, medical conditions (including physical and mental illness), claims experience, receipt of health care, medical history, genetic information, evidence of insurability such as participation in outdoor or physical activities, and disability. You do not have to pass a physical exam to be eligible for enrollment. You do not have to “pass” a health history questionnaire. A group health plan may not delay an individual's eligibility, benefits, or effective date of coverage based on confinement to a hospital or medical facility at the time the employee becomes eligible, nor can the health plan increase that person's premium because he was in a hospital or medical facility. Group health plans cannot charge an individual more for coverage than a similarly situated individual based on any health factor.
However, a group health plan may apply lifetime limits generally or for a specific disease or treatment, provided the limits are applied uniformly to similarly situated individuals and are not directed at specific employees or dependents based on any health factors they may have.
For more information on your job-based coverage and your protections under HIPAA, visit the United States Department of Labor website to find the “Your Health Plan and HIPAA…Making the Law Work For You” resource.
1This protection is called "nondiscrimination."
2For state or local government jobs, see below for the Medicaid and Medicare sections of this fact sheet.
3To determine if your plan offers insured coverage, consult your summary plan description (SPD) or contact your plan administrator.
4An employee is a late enrollee if they did not enroll in their employer's health plan at the first opportunity given, but instead enrolled at a later time. Being a late enrollee will NOT cause you to lose HIPAA's protections.
5A break in health coverage of 63 days or more is sometimes referred to as a "significant break."
6See below for the COBRA section of this fact sheet.