Individual Health Plans and HIPAA Rights

When shopping for individual health plans it is important to know about HIPAA rights. HIPAA refers to the Health Insurance Portability and Accountability Act that was passed to protect an individual's right to coverage. If coverage is terminated as a result of a job loss, the insurance company must issue a Certificate of Creditable Coverage. The certificate states the length of time you were covered and will help get coverage through another insurer without a waiting period.

If the policy being terminated also covered dependents, the dependents are also covered and protected by these HIPAA regulations. Once HIPAA individual health plans are secured, the only way they can be canceled is through nonpayment of policy premium or the plan no longer being offered in the insured's geographic area.

Are you Eligible for HIPAA?

  • The Certificate of Creditable Coverage must show at least 18 months of continuous coverage. Creditable coverage applies to group plans, Medicaid, Medicare, COBRA, and other individual health plans. Essentially, if any form of health insurance coverage has been maintained, this requirement is satisfied.
  • All COBRA benefits must have been exhausted. COBRA refers to the Consolidated Omnibus Budget Reconciliation Act which allows people and their families to continue to participate in their employee group health plan for a designated period of time if they: switch jobs, lose the job or are going through life events such as divorce. The coverage is provided at a higher premium.
  • Ineligibility for any other group plan.
  • Must not be insured or must be on the brink of losing coverage.
  • New insurance must be applied for within 63 days of losing original overage.

HIPAA Conversion Policies

Anyone losing coverage will be eligible for a conversion policy that provides the same coverage as the previous policy, including any pre-existing condition coverage. The premium will be higher though, and as a result, some people choose to shop for their own individual health plans.

Pre-Existing Conditions

A pre-existing condition is a condition which someone has sought treatment or advice for within the last 12 months. Pregnancy is considered a pre-existing condition, as well. Those who are eligible for HIPAA coverage cannot be denied a policy as result of a pre-existing condition, though they may be charged a higher premium.

Coverage Options

Individuals also have the right to look for plans on the market rather than electing for a conversion plan. When shopping for these plans however, it is important to recognize that these policies will be underwritten based on the current health of the individual. As a result, denial of coverage for a pre-existing condition is completely possible and legal.

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