Private Health Insurance Protections:
The Health Insurance Portability
and Accountability Act
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Training Sections
1. Private Health Coverage Basics
2. HIPAA and Private Health Coverage
Protections
3. HIPAA and the Affordable Care Act of
2010
4. Resources on HIPAA and the ACA
Training Section 1
Private Health Coverage Basics
3 Main Types of
Health Coverage Benefits
 Means-tested Programs
Medicaid
Children's Health Insurance Program
 Social Insurance Programs
Medicare
 Private Health Insurance
Employer-sponsored group health coverage,
Private Individual Health Insurance
Workers can have all three types at the same time.
Private Health Coverage Basics
 Private health coverage can be accessed though
employment, by being on a family member’s health
plan, or though membership in some type of
association or union.
 Initial and ongoing eligibility rules and what medical
services are covered vary by plan.
 Some plans are insurance, some are defined benefits;
for example, members pre-pay monthly into a pool in
a Health Maintenance Organization, HMO.
HMOs are not classic insurance.
Working and Private Health Care
Beneficiaries will access private health coverage
when they go to work. This is employersponsored group health coverage.
Beneficiaries may have Medicaid and/or Medicare,
along with health coverage from
an employer
Private health coverage and public health
coverage can work together
Private Sector Health Coverage
 States regulate private health coverage plans, not the
federal government; wide state-by-state variance in
private plan rules, protections and how public and
private health coverage plans interact
 Private plans are available in group coverage plans and
individual private health coverage plans
 Eligibility rules and health coverage protections in
group vs. individual health plan policies are very
different.
Group vs. Individual
Private Health Coverage
Group Health Coverage:
Group health coverage is offered in a range of health
plans as an employee benefit, or offered by a union or
a professional association, for groups of eligible
people, to provide medical services to employees and
their dependents. The employee may pay a monthly
premium or other costs out of pocket as a portion of
the health plan’s cost (called cost sharing).
Example:
Employer-sponsored Group Health Coverage
Group vs. Individual
Private Health Coverage
Private Individual Health Coverage:
An insurance or health coverage plan purchased on
the private market for an individual by that individual,
that can also provide coverage for the individual’s
family. There are monthly premiums, which can be
expensive, in addition to co-payments, coinsurance
and deductibles. The insurer or health plan can refuse
to sell a policy to someone over 19 because of their
current health status or their medical history over the
recent past (this will change in 2014).
Medical Underwriting
 Medical underwriting
A review of someone’s past medical services
received or prescribed, to assess eligibility for
a health coverage policy or plan.
 State and Federal laws (such as HIPAA) exist that
can protect Social Security beneficiaries from denial
of coverage due to medical underwriting practices.
 Most adult Social Security disability beneficiaries will
be unable to purchase individual health insurance on
the private market because of their preexisting
conditions and the practice of medical underwriting.
Cost Sharing / Out of Pocket Costs
Out of Pocket Costs: what the individual has to pay for
health coverage and services out of their own pocket
 A beneficiary can share in the costs of health coverage
provided by Medicaid, Medicare and private health
coverage.
 A beneficiary’s out of pocket costs are usually much
less in Medicaid programs.
 Costs can come in different forms depending on plan
or program and the beneficiary profile.
Cost Sharing Terms
Premium: An amount regularly paid to access private
health insurance. Premiums are often paid monthly.
Deductible: An initial specified amount that an enrollee has to
pay before the health coverage plan or program begins to
contribute towards or pay for medical costs
Coinsurance: A set percentage of medical costs that an
enrollee must pay towards the cost of medical care
Co-payment: A fixed fee that an enrollee of a health coverage
plan must pay for use of or purchase of specific medical
services provided by the plan
Out of pocket maximum: the ceiling, or maximum
costs paid by a beneficiary per year after which
the plan pays 100% of costs
Training Section 2
HIPAA and Private Health
Coverage Protections
When does employer-sponsored
health coverage start?
Employees may need to wait before
employer-sponsored health coverage begins.
An employer may have a waiting period (or service wait)
for all employees, or they may have an “affiliation
period” if the insurance offered is an HMO.
Service wait:
A set period of time all employees must work at a job
before health coverage plans start
Can be between 1 and 6 months
3 months is an average service wait
When does employer-sponsored
health coverage start?
Affiliation Periods (HMOs only)
 HMOs may require an employee to work for a
certain period of time (called an affiliation period)
before health coverage under the HMO will begin.
 HMOs can have either an affiliation period or a preexisting condition exclusionary period – not both.
 Maximum affiliation period:
2 months (3 months for late enrollees)
Employer-sponsored Group
Health Coverage Protections
The Health Insurance Portability and Accountability
Act of 1996 (HIPAA)
 HIPAA limits the ability of an employer’s health plan to
exclude coverage for preexisting medical conditions
(called preexisting conditions).
 HIPAA allows individuals to enroll in health coverage –
without a waiting period – when they lose other health
coverage, or when they get married or have a child.
Private Health Coverage Protections
Starting, Ending or Changing Jobs
HIPAA provides employer-sponsored group
health coverage protections when beneficiary
starts a job, and during the job.
If a beneficiary had prior health coverage before
signing up for a group health plan, they can use
that previous coverage to reduce or eliminate a
preexisting condition exclusionary period.
Employer-sponsored Group
Health Coverage Protections
Nondiscrimination
HIPAA prohibits employer-sponsored group health plans
from denying coverage due to prior health status,
disability, or medical history.
 Dependents also cannot be denied coverage for
these reasons.
Preexisting condition exclusionary period:
the amount of time that a beneficiary is excluded from
coverage of benefits for a preexisting condition
Preexisting Condition Exclusionary Periods
Under HIPAA:
 Preexisting condition exclusionary periods generally
cannot last longer than 12 months; or 18 months if
employee is late enrolling in the health plan.
 “Preexisting condition” is defined by HIPAA as any
health condition for which the beneficiary received
(or was recommended) advice, care, diagnosis, or
treatment, within the six months prior to enrollment in a
new health plan.
Creditable coverage: a period of prior health coverage
which can be used to reduce the length of a preexisting
condition exclusionary period.
Creditable coverage
 The beneficiary receives credit for previous health
coverage if they have had health coverage without a
break of more than 63 days prior to enrolling in the
new employer-sponsored group coverage.
 The 63 days is called a “significant break” in coverage.
 If they have had a break of more than 63 days, they
cannot use HIPAA to reduce a preexisting condition
exclusionary period (unless State law allows for a
break in coverage longer than 63 days).
Note: Days spent in a waiting period at the start of a
job do not count towards the 63 days.
Creditable coverage
Most health coverage counts as creditable coverage.
This includes coverage under Medicaid, Medicare, a
group health plan, HMO, individual health insurance
policy, or COBRA continuation coverage.
Most SSA beneficiaries CWICS work with will have
enough creditable coverage – through Medicaid or
Medicare – to eliminate any preexisting condition
exclusionary period.
A certificate of creditable coverage can be provided by a
health plan, HMO or health insurance company.
.
Getting a Certificate of Coverage
 A certificate of creditable coverage will be
provided automatically to the employee when
health coverage ends (such as when a job ends).
 The beneficiary can request a Certificate for free
up to 24 months after coverage ends.
 Certificates contain dates of coverage, indentifying
information, contact information for the health plan,
and information about HIPAA rights.
 Beneficiaries can use alternative documentation as
proof of prior creditable health coverage (pay stubs
showing health plan premiums, for example).
HIPAA Examples
 John started a new job 45 days after his prior group
health plan ended (from a previous job). He had
health coverage in the prior health plan for 24 months.
 John will not be subject to a preexisting condition
exclusionary period on his new job.
 He did not have a break in coverage of more than 63
days. His 24 months of previous coverage will fully
offset any preexisting condition exclusionary period
(which can be up to 12 months, 0r 18 months if
enrolling in the plan late).
HIPAA Examples
 Susan has a preexisting condition. She starts a new job
100 days after her last job ended, and had no health
coverage in the period between these two jobs.
 Can Susan be subject to a preexisting condition
exclusionary period at her new job?
 Under Federal HIPAA law, she can because she had a
“significant break” in coverage that was more than
63 days.
Note: State law may increase the number of days allowed to
more than 100. The health plan would have to be
insurance or an HMO to be subject to these State laws.
HIPAA Examples
 Xavier is starting a new job and wants to reduce the
length of a preexisting condition exclusionary period.
 He had a gap in his health coverage. He had coverage
for 2 years, then no coverage for 70 days. He has had
coverage for the last 8 months up until today.
 How long can a preexisting condition exclusionary
period be in his new job? (assuming no State laws)
Answer: 4 months (12 months – 8 months).
 Xavier had a break of more than 63 days, so only the
past 8 months of coverage can be counted to reduce
the preexisting condition exclusionary period.
Special Enrollment Periods
Enrollment periods
 Initial Enrollment Period: when health coverage is first
offered by an employer at start of employment
 Annual open enrollment period: the time of the year
when employees can make changes to health coverage
 Special Enrollment Period: a 30-day period in which a
beneficiary can enroll in or change health coverage
HIPAA requires group health plans to allow beneficiaries
and family members to enroll in coverage without
having to wait until the plan's annual open enrollment
period.
Special Enrollment Periods
A special enrollment opportunity occurs if an individual
with other health insurance loses that coverage or if a
person becomes a new dependent through marriage,
birth, or adoption.
Qualifying events: events that allow a beneficiary to have
a Special Enrollment Period in which they can change
their group health coverage
Employee must request enrollment within 30 days of the
qualifying event.
Example - Special Enrollment Periods
 Mary initially declined the family health benefits from
her job because her family was covered under her
husband’s health plan. Now, her husband has lost his
job. The health coverage ended on the 1st of this month.
 Mary has a Special Enrollment Period in which she can
enroll in the health benefits provided on her job.
 She has 30 days after her husband loses his
health benefits in which to enroll in her employer’s
health coverage. She can add herself and any
family member to the health plan.
Examples - Enrollment Periods
 Jane gets married. She can now make changes to her
health coverage from work, including adding new
coverage for herself and her spouse.
 The Johnsons have a new baby. This is a qualifying
event. They have 30 days to make changes to their
health coverage.
 Beth is working but declined the health insurance from
her job. When her Medicaid ends, she has 30 days to
choose to enroll in her employer’s health insurance.
All of these examples involve special enrollment periods
Special Enrollment Periods
Employees and dependents who lose coverage under
the Children’s Health Insurance Program (CHIP) or
Medicaid are given 60 days to request enrollment in
an employer’s health insurance.
HIPAA protections related to pre-existing conditions
apply in the Initial Enrollment Period and
Special Enrollment Periods but may not apply
in later subsequent enrollment periods.
Examples of Qualifying Events
A qualifying event occurs when you lose coverage due to
any of these events:
 Medicaid or Medicare ends
 Divorce or legal separation
 A spouse’s employment and health coverage end
 A spouse’s death causes loss of coverage
 A young person can no longer be covered under a
parents plan
 Work hours are reduced below the minimum needed
to be eligible for health coverage
States Laws and HIPAA
State law can complement HIPAA by offering more
protections than the Federal law.
– but these State laws only apply if the health plan is
provided by an HMO or an insurance company.
State law related to HIPAA can:
 increase the number of days that constitute a
“significant break” in coverage to more than 63 days
 decrease the maximum number of months of a
preexisting condition exclusionary period
(below 12 months)
States Laws and HIPAA
State law can:
 reduce the number of months of the “look back
period” for preexisting conditions
 increase the time permitted to enroll in coverage
over the 30 days limit for Special Enrollment Periods
 add to the list of conditions (such as pregnancy) that
are exempt from preexisting condition exclusionary
periods. Example: adding cancer to this list.
State laws related to HIPAA can be found:
www.naic.org
Training Section 3
HIPAA and the Affordable Care Act of 2010
The Affordable Care Act of 2010
Congress passed health care reform legislation in 2010.
In March 2010, President Obama signed 2 bills into
law, creating:
 Patient Protection and Affordable Care Act
(Public Law 111-148)

Health Care and Education Reconciliation Act of 2010
(Public Law 111-152 )

Together, they are commonly known as
the Affordable Care Act (ACA) of 2010
The Affordable Care Act of 2010




The ACA contains many provisions that will over
time implement health care reforms.
The provisions come into effect gradually
between now and 2020.
In 2014, the ACA will introduce some major
changes to health care in the US, including
the State Health Exchanges.
Two of the ACA provisions ban health plans from
discriminating based on preexisting conditions;
these provisions will impact HIPAA regulations.
Ban on Discrimination against
Children with pre-existing conditions
Currently under the ACA, it is illegal for insurance
companies to deny or restrict insurance to children
because of pre-existing conditions.
 Includes all children under 19 who have pre-existing
conditions
Before the ACA, insurance companies could legally deny
insurance to children because they had a pre-existing
condition.
Ban on Discrimination against
Children with pre-existing conditions
This ACA provision applies to health plan years starting
after September 23, 2010.
Insurance companies may decide to restrict enrollment
to specific enrollment periods, such as annual open
enrollment periods.
U.S. Department of Health and Human Services is
responsible for regulation and enforcement details.
2014 Ban on Discrimination against
Adults with pre-existing conditions
Starting January 1, 2014, the ban on discrimination against
children with pre-existing conditions is expanded to
adults (anyone with a pre-existing condition).
In 2014, it will be illegal for insurance companies to deny or
limit insurance to anyone because of a pre-existing
condition
This includes employer-sponsored group health coverage
and health plans purchased on the private individual
health insurance market.
Ban on Discrimination against
Adults with pre-existing conditions
Some of the HIPAA provisions related to
employment will no longer be needed starting
in January, 2014.
Employers and health plans will no longer be able to
have pre-existing condition exclusionary periods.
Training Section 4
Resources on HIPAA and the
Affordable Care Act of 2010
Resources on HIPAA and Private Coverage
U.S. Department of Labor:
HIPAA information, factsheets and FAQs:
http://www.dol.gov/dol/topic/healthplans/portability.htm
Your Health Plan And HIPAA ...
Making The Law Work For You
http://www.dol.gov/ebsa/publications/yhphipaa.html
A complete guide to the HIPAA provisions related to
employment and private health coverage.
Resources
HealthCare.gov
A comprehensive website with information about the
provisions of the Affordable Care Act of 2010.
U.S. Department of Health & Human Services
Health Insurance Consumer Guides for the Fifty States
Federal and state-specific information on HIPAA, COBRA
and private health insurance rights and protections.
http://www.healthinsuranceinfo.net/guides_map.htm#
altList
Resources
A Consumer Guide to Handling Disputes with Your
Employer or Private Health Plan,
Kaiser Family Foundation
http://www.kff.org/consumerguide/7350.cfm
State Departments of Managed Health Care (HMOs)
http://www.kff.org/consumerguide/7350.cfm
State Departments of Insurance
http://www.naic.org/state_web_map.htm