Certificates of Creditable Coverage - PowerPoint

							Final HIPAA Portability Rules
What is HIPAA Portability?
• Interim rules initially issued by the Internal Revenue Service
  (IRS), Center for Medicare and Medicaid Services (CMS), and
  Department of Labor (DOL) in 1997

• The HIPAA portability rules allow workers to change jobs and
  group health plans more easily without being denied benefits
  under the new health plan because they had a pre-existing
  health condition.

• More specifically, the HIPAA portability rules place limits on the
  ability of group health plans or health insurance issuers (such as
  an insurance company or HMO) to include a pre-existing
  condition exclusion in their plans, and then, based on the
  exclusion, deny benefits because the person has a pre-existing
  condition.
Specifications
• Effective for plan years beginning on or after
  July 1, 2005

• The Final Rules do not significantly modify the
  HIPAA Portability interim rules issued in 1997
Overview
• Changes and clarifications to the 1997 interim
  rules include:
  –   Clarification on definition of Dependent
  –   General Notice of Pre-existing condition exclusion
  –   Limitations on Pre-existing condition exclusions
  –   Creditable coverage including certificates
  –   Special enrollment periods
  –   Excepted benefits
Definitions
• The final rules add a clarification definition of
  “dependent.” A dependent is “any individual who is
  or may become eligible for coverage under the terms
  of a group health plan because of a relationship to a
  participant.”

• In other words, for the purposes of HIPAA, the
  definition of dependent in a group health plan
  document determine who is or is not a dependent.
  For example, plan terms control the age at which a
  child of a participant ceases to be eligible for
  coverage as a dependent.
General Notice of Pre-existing
Condition Exclusion
• Provides clarification of the requirement of a general
  notice explaining the pre-existing condition exclusion
  of a plan
   – Must be provided at the same time as written application
     materials are distributed for enrollment by the Employer.
   – Must be provided prior to imposing the exclusion
   – The information provided in the SPD is not sufficient to
     satisfy this requirement
   – Must contain a contact title and phone number

• Sample language is provided that an Employer can use
  as a basis for their own notice – there is no
  requirement to use the sample language.
Limitations on Pre-existing Condition
Exclusions
• Retains the general definition of a pre-existing
  condition as in the interim rule

• Clarifies that an exclusion is any limitation or
  exclusion of benefits relating to a pre-existing
  condition

• Clarifies that the required notice informing an
  individual that a pre-existing condition exclusion
  period will apply to him/her must identify the last
  day on which the pre-existing condition exclusion
  applies to the individual.
Creditable Coverage
• Specifies the following count as creditable coverage
   –   Foreign country public health coverage
   –   The State Children’s Health Insurance Program (CHIP)
   –   Coverage from a state or federal penitentiary
   –   Plans maintained by the U.S. Government

• Clarifies a Plan may not impose any limit on amount of
  time an individual has to present a certificate or other
  evidence of creditable coverage
   – This does not prevent a plan from denying a claim under a pre-
     existing condition exclusion to comply with applicable claims
     regulations.
   – Once a claim has been denied, other laws (such as §503 of ERISA)
     may set forth timing rules for an individual to appeal a denied
     claim.
Creditable Coverage (Continued)
• Requires a change to certificates of creditable
  coverage to include information notifying individuals
  of their rights under HIPAA. A model statement is
  included in the final rules.
• Requires an automatic certificate be issued when an
  individual reaches the maximum lifetime limit on all
  benefits
• Deleted the term “insurance” so that ANY coverage
  provided by a governmental entity is creditable
  coverage without regard to whether it has risk-
  shifting or risk-distributing characteristics of
  insurance.
Creditable Coverage (Continued)
• Requires that procedures for requesting
  certificates be in writing
• Certificate of Coverage must be in writing,
  however, the final rules:
  – Allow creditable coverage information to be
    provided by other means (such as by telephone) –
    when requested by the plan participant to supply
    information to another plan (and the other plan
    agrees)
Creditable Coverage (Continued)
• Includes two examples on counting a
  significant break in creditable coverage
  – Tolling a significant break under Trade Act of 2002
     • This amended COBRA to allow a second opportunity to
       elect COBRA for those individuals who qualify for trade
       adjustment assistance but did not initially elect COBRA
     • The days between the date coverage was lost and the
       first day of the 2nd COBRA election period are not counted
       as a significant break in coverage
  – Tolling a significant break in the individual market
     • Refers to the case of individuals seeking coverage in the
       individual market
     • This does not apply to a group health plan
Special Enrollment
• Clarifies what constitutes a loss of eligibility
  for special enrollment rights to arise
   – Conditions for special enrollment
      • Loss of eligibility for coverage as a result of:
          – legal separation, divorce, loss of dependent status, death of
            employee, termination of employment
          – an individual no longer resides, lives, or works in the
            service area and no other benefit package is available
          – an individual incurring a claim that would meet or exceed a
            lifetime limit on all benefits
          – a plan no longer offers benefits to certain classes of
            individuals (e.g. part-time employees)
Special Enrollment (Continued)
  – Conditions for special enrollment (continued)

     • Termination of Employer contributions
     • Exhaustion of COBRA Continuation Coverage


  – Loss of Medicaid does not create a special
    enrollment period
Special Enrollment (Continued)
• Provided model notice of Special Enrollment period
  that must be provided on or before the time an
  employee is offered the opportunity to enroll

• Restates that if an employee/dependent enrolls as a
  late enrollee or special enrollee, any period before
  such late or special enrollment is not a waiting period
   – In other words, the date of enrollment for late/special
     enrollees is used in determining the beginning and ending of
     a look-back period and the beginning of a pre-existing
     condition exclusion period
Excepted Benefit Plans
• Retains rule that the following benefits are
  excepted from compliance with portability
  requirements:
  –   Accident only or accidental death and dismemberment
  –   Disability income coverage
  –   Liability insurance (including auto and general liability)
  –   Supplemental coverage
  –   Workers’ compensation
  –   Automobile medical payment insurance
  –   Credit-only insurance (e.g., mortgage insurance)
  –   Coverage for on-site medical clinics
Excepted Benefit Plans (Continued)
• Retains rule that limited-scope dental
  benefits, limited-scope vision benefits, or
  long-term care benefits, if not an integral
  part of a group health plan, are excepted
  – Clarifies the definition of “integral” with two
    requirements
     • Participants have right to elect not to receive coverage
       for the benefit, and
     • If coverage is elected, participant pays an additional
       premium or contribution for that coverage
Partnerships Clarified
• Health plans sponsored by partnerships
  are subject to the HIPAA portability
  rules, even if the plans only cover
  business partners and are considered
  exempt from ERISA. Business partners
  are considered employees for HIPAA
  portability purposes.
Available Resources
• Final Rule (available in PDF format)
  – Federal Register, December 30, 2004
     • http://a257.g.akamaitech.net/7/257/2422/06jun20
       041800/edocket.access.gpo.gov/2004/pdf/04-
       28112.pdf
Questions?
 If you have any questions or need any
 assistance, please contact:
     JI Specialty Services, Inc.