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Judy and her staff are available to clients by calling
1-800-238-7828 Services include: reimbursement counseling and help locating financial assistance programs, assistance identifying support groups & services, and always, an understanding ear.
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Health Insurance Portability By Judy Joyce, LSW,
In August of '96, President Clinton signed into law the Health Insurance Portability and Accountability Act of 1996 which was
sponsored by senators Edward Kennedy and Nancy Kassebaum. This is the biggest health-care measure passed in a decade.
This important legislation is not perfect; however, it does move in the right direction towards increasing portability (ability to maintain coverage when changing jobs or insurance) and access to health coverage, especially for those individuals with medical diagnoses such as end-stage
organ disease (transplant), cancer, AIDS,
diabetes, heart disease, etc.
Following are some of the important positive features of this legislation:
Exclusions for pre-existing conditions are limited. Employers and insurers offering health coverage are prohibited from limiting or denying coverage to individuals who have been insured under a group health plan for more than 12 months for a medical condition that was diagnosed or treated
during the previous six months. Once the 12-month limit expires, no new pre-existing condition limit may ever be imposed on people who maintain their
coverage, with no more than a
63-day gap, even if they change jobs or health plans.
In addition, insurers and employers who offer health
coverage must credit coverage of less than 12 months toward any pre-existing condition exclusion under a new health plan. For example, if Mary Smith has had coverage for six months when she changes jobs or health plans, she would face a maximum additional exclusion of six months, rather than the normal 12 months.
The legislation ends "job lock" - or the necessity of staying in the same job solely to maintain health insurance - by making health coverage portable. Even if you have medical problems, this bill will limit pre-existing condition exclusions and will provide credit for prior continuous coverage.
The legislation guarantees availability of health insurance
for small employers. It prohibits insurance carriers, health maintenance organizations and other
entities issuing health coverage from denying coverage to employers with two to 50 employees.
The bill prohibits employers offering health coverage to employees or dependents from: excluding an employee or dependent from coverage; dropping an employee
or dependent from coverage; or charging an employee or dependent higher premiums - based on
that individual's health status,
medical condition, claims experience, receipt of health care, medical
history, genetic information,
evidence of insurability (including domestic violence), or disability.
The legislation guarantees renewability of health coverage to employers and individuals. Except in the case of fraud or misrepresentation by an employer, the bill requires health insurers to renew coverage to all employers as long as premiums are paid.
The legislation helps individuals leaving or losing their job to maintain health coverage. The bill guarantees the availability of
individual health coverage to
"eligible individuals" who have had employment-based health coverage for at least 18 months, who are ineligible for or have exhausted their COBRA coverage, and who are ineligible for coverage under any other employment-based health plan. The bill encourages states to enact individual market reforms meeting the criteria of the bill. The bill does not set price limits on these individual policies or guarantee that the premiums are affordable. Under this law, you will also be able to extend your COBRA coverage an additional 11 months (beyond 18 months) if you or a family member become disabled during the first 60 days of COBRA coverage.
Most of the provisions of the bill
became effective as of July 1, 1997. Individuals begin
accruing credit toward pre-existing condition exclusions immediately. Group health plans must
comply with all nondiscrimination, pre-existing condition, and crediting requirements at the beginning of their first "plan year" beginning after June 30, 1997 (Since most corporate health plans operate on calendar years, most Americans will have benefited by January 1, 1998).
While the Kennedy-Kassebaum law is an important breakthrough, some critical omissions remain. Following are some of the individuals who will not be protected by the legislation: uninsured people applying for coverage in the
individual market; people who work in jobs that do not provide health insurance; people whose spouses also lack access to group insurance; people who leave their employer and the group insurance market but are unable to continue coverage under COBRA. In addition, while you do get access to coverage, nothing requires that the individual coverage be affordable.
You may not initially receive every benefit that your new health plan offers because employers can limit you to the category or class you had before. If the employer does limit by
category, this restriction is limited to a maximum of 12 months. At that time, the employee must receive all of the benefits provided to other employees.
The employer could exclude certain illnesses for all employees or put a cap on benefits. State and local government health plans can opt out of this law which would free them to exclude your
pre-existing illnesses.
This act goes a long way towards improving access to health coverage. In addition to the above provisions, the legislation also includes changes regarding the prevention of health-care fraud and abuse; duplication and coordination of Medicare benefits; and
tax-related health-care provisions such as medical savings accounts; the tax treatment of long-term care insurance and expenses; and accelerated death benefits and viatical settlements. If you have questions about this new legislation, contact your State Insurance Department.
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