The Health Insurance Portability and Accountability Act of 1996 (HIPAA) was enacted on August 21, 1996, to provide for, among other things, improved portability and continuity of health insurance in group and individual insurance markets, and group health plan coverage provided in connection with employment. These changes affect practically all group health plans providing coverage for employees. These changes help protect individuals from gaps in health insurance coverage, and include some additional administrative requirements that employers must satisfy. HIPAA is generally effective for plan years beginning after June 30, 1997.
Two additional pieces of legislation were also passed in 1996 affecting group health plans. The Mental Health Parity Act of 1996 (MHPA) and the Newborns and Mothers Health Protection Act of 1996 (NMHPA) were both enacted on September 26, 1996. MHPA was enacted to provide for parity in the application of lifetime and annual limits on mental health benefits with those applied to medical and surgical benefits. The NMHPA was enacted to provide protection for mothers and their newborn children regarding the length of hospital stays following the birth of a child. MHPA and NMHPA are effective for plan years beginning on or after January 1, 1998.
This presentation describes the primary requirements imposed under each Act. Since the new rules apply to both group plans and insurance companies, references to the "plan" or "group health plan" include self-funded plans and fully insured plans, unless otherwise noted.
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A. GENERAL RULES1. Prior Law -- Prior to the enactment of HIPAA, there were no requirements, other than the COBRA rules, which applied to group health plans or insurers regarding the portability of health insurance. Since the passage of COBRA in 1985, employers have been required to offer continuation coverage upon the occurrence of certain "qualifying events," but there have been no limits on pre-existing condition exclusions or prohibitions on excluding individuals from coverage based on their health status.2. Effective Date
a. HIPAA Rules -- The HIPAA rules are effective for plan years beginning after June 30, 1997. In the case of a group health plan maintained pursuant to one or more collective bargaining agreements ratified before August 21, 1996, the effective date is delayed until the first plan year after expiration of the last of such agreement, determined without regard to any extension of the agreement after August 21, 1996.b. Certificates of Creditable Coverage -- The requirements for providing certificates of creditable coverage were effective on June 1, 1997.
3. Group Health Plans
HIPAA applies to group health plans. These are defined very broadly as a plan of, or contributed by, an employer or an employer organization, to provide health care to employees, former employees, the employer, or others associated or formerly associated with the employer in a business relationship or their families, whether the benefits are provided directly or through insurance, reimbursement or otherwise. This definition includes self-insured plans. As a result of this broad definition, the HIPAA rules will apply to the majority of employers in the private sector, as well as charitable organizations, state and local governments and school corporations.4. Excluded Benefits
The following benefits are excepted from the HIPAA requirements in all circumstances:
- Coverage only for accident, including accidental death and dismemberment;
- Disability insurance;
- Liability insurance;
- Worker's compensation or similar insurance; and
- Automobile insurance.
Additionally, the following benefits are excepted from the HIPAA requirements if they are provided under a separate policy, or a participant has the right to not elect coverage for these benefits and must pay an additional premium or contribution to receive these benefits:
- Limited scope dental or vision benefits (i.e., dental or vision benefits sold under a separate policy or rider and that are limited in scope to a narrow range or type of benefits generally excluded from hospital/medical/surgical benefit packages);
- Long-term care; and
- Medicare Supplemental Health Coverage (must be provided under a separate policy).
5. Misconceptions
HIPAA does not mandate that an employer either provide health insurance, or that any health insurance plan include coverage for specific illnesses.
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B. PRE-EXISTING CONDITION EXCLUSION LIMITATIONS1. Pre-Existing Condition Exclusion Permitted
Group health plans and health insurers offering group health insurance may still impose a pre-existing condition exclusion as long as it satisfies the following requirements:a. Six-Month Look-Back Rule -- A pre-existing condition exclusion must relate to a condition (whether physical or mental), regardless of the cause of the condition, for which medical advice, diagnosis, care or treatment was recommended or received within the six-month period ending on the enrollment date. Medical advice, diagnosis, care or treatment is taken into account only if it is recommended by, or received from, an individual licensed or similarly authorized to provide such services under state law and operating within the scope of practice authorized by state law. The six-month period ending on the enrollment date begins on the six-month anniversary date preceding the enrollment date. For example, for an enrollment date of August 1, 1998, the six-month period preceding the enrollment date is the period commencing on February 1, 1998 and continuing through July 31, 1998.EXAMPLE: 6-MONTH LOOK-BACK
Example: Joe is treated for a medical condition seven months before the enrollment date in Employer A's group health plan. As part of such treatment, Joe's physician recommends that a follow-up examination be given two months later. Despite this recommendation, Joe does not receive a follow-up examination and no other medical advice, diagnosis, care or treatment for that condition is recommended to Joe or received by Joe during the six-month period ending on Joe's enrollment date in Employer A's plan.Discussion: Employer A's plan may not impose a pre-existing condition exclusion period with respect to the condition for which Joe received treatment seven months prior to the enrollment date.
EXAMPLE: 6-MONTH LOOK-BACK
Example: Jack, who is subject to a preexisting exclusion imposed by Employer A's plan, has diabetes, as well as a foot condition caused by poor circulation, and retinal degeneration (both of which are conditions that may be directly attributed to diabetes). After enrolling in the plan, Jack stumbles and breaks a leg.Discussion: The leg's fracture is not a condition related to Jack's diabetes, even though poor circulation in Jack's extremities and poor vision may have contributed toward the accident. However, any additional medical services that may be needed because of Jack's pre-existing diabetic condition that would not be needed by another patient with a broken leg who does not have diabetes may be subject to the pre-existing condition exclusion imposed under Employer A's plan.
b. 12-Month Look-Forward Rule -- The pre-existing condition exclusion period may not extend for more than 12 months (18 months in the case of a late enrollee) after the enrollment date.
c. Reducing a Pre-Existing Condition Exclusion Period by Creditable Coverage -- The period of any pre-existing exclusion that would otherwise apply is reduced by the number of days of creditable coverage the individual has as of the enrollment date.
2. Important Definitions
a. Enrollment Date -- HIPAA has introduced a new term by which the applicable pre-existing exclusion period and creditable coverage is measured. The term "enrollment date" means the first day of coverage, or if there is a waiting period, the first day of the waiting period.b. Late Enrollee -- The term "late enrollee" means an individual who is enrolled under the plan other than on:
The earliest date on which coverage can become effective under the terms of the plan; or
A special enrollment date for the individual.
3. Exceptions Pertaining to Pre-Existing Condition Exclusions
a. Newborns -- As long as there has not been a significant break in coverage for the child, plans may not impose any pre-existing condition exclusion on a newborn enrolled in a group health plan (or other creditable coverage) within 30 days after birth.b. Adopted Children -- Provided there has not been a significant break in coverage for the child, a plan may not impose a pre-existing condition exclusion on a child who is adopted or placed for adoption before attaining age 18 and who, within 30 days after the date of adoption or placement of adoption, is covered under the plan (or other creditable coverage).
c. Pregnancy -- Plans may not impose a pre-existing condition exclusion relating to pregnancy.
4. Notice of a Pre-Existing Condition Exclusion
A plan may not impose a pre-existing condition exclusion with respect to a participant or dependent of the participant before notifying the participant, in writing, of the existence and terms of any pre-existing condition exclusion and their rights to demonstrate creditable coverage.5. Determination of Pre-Existing Condition
The plan will generally determine whether an individual has a pre-existing condition exclusion through medical records. The "prudent person" standard used under some state laws may no longer be used to determine a pre-existing condition.
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C. CREDITABLE COVERAGE1. Creditable Coverage Defined
Most health coverage is considered creditable coverage. The term "creditable coverage" means coverage of an individual under any of the following:
- Group Health Plan;
- Health Insurance Coverage;
- Medicare;
- Medicaid;
- State Health Benefits Risk Pool;
- Medical Care Program of the Indian Health Service or of a Tribal Organization;
- The Federal Employees' Health Benefits Program; and
- A Public Health Program Maintained by State, County or Other Political Subdivision.
2. Methods of Counting Creditable Coverage
There are two methods of counting creditable coverage:a. Standard Method -- This is the method that will be used by the majority of all plans. For purposes of reducing the pre-existing condition exclusion period, under the standard method, the plan determines the amount of creditable coverage by counting all of the days the individual has under one or more types of creditable coverage. If, on a particular day, an individual has creditable coverage from more than one source, all of the creditable coverage on that day is counted as one day. Any days in a waiting period for a plan or policy are not creditable coverage under the terms of the plan.b. Alternative Method -- Under the alternative method, the plan determines the amount of creditable coverage for specific benefits. The plan may use the alternative method for any or all categories of benefits. Categories of benefits for which the alternative method may be used are as follows:
- Mental health;
- Substance abuse treatment;
- Prescription drugs;
- Dental care; or
- Vision care.
If a plan is going to use the alternative method, that fact must be contained in the plan and prominently disclosed in writing and stated to each enrollee at the time of enrollment.
3. Significant Break in Coverage
When the standard method of counting creditable coverage is used, days of creditable coverage that occur before a significant break in coverage are not required to be counted. A "significant break in coverage" means a period of 63 consecutive days during all of which the individual does not have any creditable coverage, except that neither a waiting period, nor an affiliation period under an HMO, is taken into account in determining a significant break in coverage.EXAMPLE: SIGNIFICANT BREAK IN COVERAGE
Example: Joe works for Employer A and has creditable coverage under Employer A's plan for 200 days before Joe's employment is terminated and coverage ceases. Joe is then unemployed for 51 days before being hired by Employer B. Employer B's plan has a three-month waiting period. Joe works for Employer B for two months and then terminates employment. Eleven days after terminating employment with Employer B, Joe begins working for Employer C. Employer C's plan has no waiting period, but has a six-month pre-existing condition exclusion period.Discussion: Joe does not have a significant break in coverage because, after disregarding the waiting period under Employer B's plan, Joe had only a 62-day break in coverage (51 days plus 11 days). Accordingly, Joe has 200 days of creditable coverage and Employer C's plan may not apply its six-month pre-existing condition exclusion period to Joe.
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D. CERTIFICATION AND DISCLOSURE OF CREDITABLE COVERAGE1. Effective Date for Certification Requirements
Beginning June 1, 1997, certificates of creditable coverage must be provided automatically or upon request under the circumstances described below. The certification requirements apply to events occurring on or after July 1, 1996. No certificate if required to reflect coverage before July 1, 1996.For events occurring on or after July 1, 1996, but before October 1, 1996, a certificate must be provided only upon request by or on behalf of the individual to whom the certificate applies. For events occurring on or after October 1, 1996, and before June 1, 1997, a certificate was required to be furnished by June 1, 1997. However, for that time period, plans are permitted to satisfy the certification requirement by providing a model form of notice, a sample of which follows as Appendix A.
2. Entities Required to Provide Certificate
Each group health plan and insurance company offering coverage under group health plan is required to furnish certificates of creditable coverage. Duplicate certificates are not required as long as the individual receives the certificate containing all required information. Responsibility for issuing the certificate of creditable coverage should be set forth in writing between the plan sponsor and any insurance company or third party administrator.3. Automatic Certificates
A certificate must be provided automatically, without charge, when a participant or dependent:
- loses coverage under the plan (within a reasonable period of time);
- becomes entitled to elect COBRA continuation coverage (within 14 days of the qualifying event); and
- when an individual's COBRA continuation coverage ceases (within a reasonable period of time).
The period that must be included on the automatic certificate is the last period of continuous coverage ending on the date coverage ceased.
4. Upon Request
Requests for certificates are permitted to be made by, or on behalf of, the individual before that individual loses coverage or within 24 months of losing coverage. The certificate must be provided in a reasonable and prompt fashion. If an individual requests a certificate, the certificate must be provided for each period of continuous coverage ending within the 24-month period ending on the date of the request (or continuing on the date of the request). A separate certificate may be provided for each such period of continued coverage.5. Form of Certificate
The certificate must be provided in writing and a model certificate has been published for use by plans, a copy of which follows as Appendix B. A written certificate is not required if an individual entitled to receive a certificate requests that a certificate be sent to another plan or health insurance company instead of the individual and the plan or insurance company that would otherwise receive the certificate agrees to accept the information through means other than by a written certificate, such as over the telephone.6. Special Rules Concerning Dependent Coverage
a. Reasonable Efforts to Determine Information -- A plan must use reasonable efforts to determine any information needed for a certificate relating to dependent coverage. A plan will satisfy this requirement if it annually requests all employees to provide updated information regarding dependents, including the specific date on which an employee has a new dependent, or on which a person ceases to be a dependent of the employee.b. Transition Rules -- Dependents are entitled to a written certificate of creditable coverage. Several concerns were raised because plans often do not know the existence of dependents or their coverage periods until claims are filed. To address these concerns, a transitional rule applies through June 30, 1998, to give plans the opportunity to obtain the required dependent information. Until June 30, 1998, a plan may satisfy its obligation to provide a written certificate regarding coverage of a dependent by providing the name of the participant covered by the plan and specifying the type of coverage provided in the certificate (such as family or employee + spouse coverage). However, if asked to provide a certificate relating to a dependent, the plan must make reasonable efforts to obtain and provide the name of the dependent.
7. Ability of an Individual to Demonstrate Creditable Coverage
If the accuracy of a certificate is contested or a certificate is unavailable when needed, the individual has the right to demonstrate creditable coverage (and waiting or affiliation periods) through the presentation of documents or other means. A plan is required to take into account all information that it obtains or that is presented on behalf of an individual to make a determination, based on the relevant facts and circumstances, whether an individual has creditable coverage and is entitled to offset all or a portion of any pre-existing condition exclusion period. A plan must treat the individual as having furnished a certificate if the individual:
- attests to the period of coverage;
- presents relevant corroborating evidence of some creditable coverage during the period; and
- cooperates with the plan's efforts to verify the individual's coverage.
Documents that an individual may use to establish creditable coverage in the absence of a certificate include:
- Explanation of Benefit Claims (EOBs) or other correspondence from a plan indicating coverage;
- Pay stubs showing a payroll deduction for health coverage;
- Health coverage I.D. card;
- Certificate of Coverage; and
- Records from medical care providers indicating health coverage.
8. Determination and Notification of Creditable Coverage
Upon receipt of a certificate or other evidence of creditable coverage, the plan must, within a reasonable time period following receipt of the information, make a determination regarding the individual's period of creditable coverage and notify the individual of that determination. Any plan seeking to impose a pre-existing condition exclusion must disclose to the individual, in writing:
- its determination of any pre-existing condition exclusion period that applies to the individual;
- the basis for that determination;
- include a written explanation of any appeal procedures; and
- a statement that the individual has an opportunity to submit additional evidence of creditable coverage.
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E. SPECIAL ENROLLMENT PERIODS1. Eligibility for a Special Enrollment Period
Both employees and dependents are eligible to enroll during a special enrollment period. If an individual enrolls during a special enrollment period, he or she will not be treated as a late enrollee. The employee and spouse may also enroll, if not already enrolled, when a birth or adoption occurs. A special enrollment period is provided if an employee is eligible, but not enrolled, for coverage under the plan and declined coverage because the employee had coverage under COBRA or another health plan, and that coverage is lost because:
- the other coverage terminated as a result of loss of eligibility for coverage as a result of legal separation, divorce, death, termination of employment, and reduction in the number of hours of employment;
- COBRA continuation coverage was exhausted; or
- coverage was lost because employer contributions terminated.
Loss of eligibility does not include a loss due to failure of the individual to pay premiums on a timely basis, or termination coverage for cause (such as making a fraudulent claim or an intentional misrepresentation of a material fact in connection with the plan).
2. Length of Special Enrollment
The employee is required to request enrollment within 30 days after the exhaustion or termination of the employee's other coverage. Dependents eligible to enroll during a special enrollment period must have at least 30 days to enroll, beginning on the date of the marriage, birth or adoption or placement for adoption.3. Effective Date of Enrollment
In the case of marriage, the effective date of enrollment must be not later than the first day of the first calendar month beginning after the date the completed request for enrollment is received by the plan. In the case of a dependent's birth, the date of such birth; and in the case of a dependent's adoption or placement for adoption, the date of such adoption or placement for adoption.4. Effect on Pre-Existing Condition Limitations
Pre-existing condition limitations up to 12 months (not 18 because they are not considered late enrollees) may be imposed on the employee or spouse who enrolls during the special enrollment period. No pre-existing condition limitation may be applied to a newborn or adopted child added within 30 days of the birth or adoption or placement for adoption.5. Notice of Enrollment Rights
On or before the time the employee is offered to enroll in the plan, the plan must provide the employee with a description of the plan's special enrollment rules. A model notice has been provided for this purpose and follows as Appendix C.
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F. NON-DISCRIMINATION RULES1. Eligibility to Enroll
Group health plans may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the plan based on any of the following health status-related factors:
- Health status;
- Medical condition (including both physical and mental illnesses);
- Claims experience;
- Receipt of health care;
- Medical history;
- Genetic information;
- Evidence of insurability; or
- Disability.
Example: An employer sponsors a group health plan that is available to all employees who enroll within the first 30 days of their employment. However, individuals who do not enroll in the first 30 days cannot enroll later unless they pass a physical examination. This plan discriminates on the basis of one or more health status-related factors and is not permitted.
2. No Particular Benefits or Exclusions Required
The prohibition against discrimination against eligibility to enroll does not require a plan to provide particular benefits other than those provided under the terms of the plan, nor does it prevent a plan from establishing limitations or restrictions on the amount, level or nature of benefits or coverage for "similarly situated individuals" enrolled in the plan. "Similarly situated individuals" include full-time versus part-time employees, employees in the same geographic location, and employees in a particular collective bargaining unit. These categories may be expanded in the future.3. Unresolved Issues
The current regulations have left the following issues unresolved:
- Can a plan exclude or limit coverage based on the source of the injury? (Such as injuries while riding a motorcycle, injuries while riding a motorcycle without a helmet, or injuries incurred during the commission of a felony); and
- Can a wellness program provide greater benefits or lower premiums for non-smokers?
4. In Premiums or Contributions
A plan may not require an individual (as a condition of enrollment or continued enrollment under the plan) to pay a premium or contribution that is greater than the premium or contribution for similarly situated individuals enrolled in the plan based on any health status-related factor. Again, this rule does not restrict the amount an employer may be charged by an insurance company for coverage, nor does it prevent a plan from establishing premium discounts or rebates or modifying otherwise applicable co-payments or deductibles in return for adherence to a bona fide wellness program. At this point, the only guidance available in defining a bona fide wellness program states that such a program is of "health promotion" and "disease prevention." Several questions have been raised as to whether it will be permissible to offer a discount to non-smokers and additional guidance on that issue is expected from the Department of Labor.
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G. "OPT-OUT" ELECTION AVAILABLE FOR NON-FEDERAL GOVERNMENTAL PLANS1. "Opt-Out" Election
The plan sponsor of a non-federal governmental plan may elect to be exempted from certain HIPAA requirements with respect to the self-funded portion of its plan. The five requirements non-federal governmental employers may opt-out of are the following:
- Limitations on pre-existing condition exclusion periods;
- Special enrollment periods for individuals and dependents losing other coverage;
- Prohibitions against discriminating against individual participants and beneficiaries based on health status;
- Standards relating to benefits for mothers and newborns; and
- Parity in the application of certain limits to mental health benefits.
This opt-out option is available to such non-federal governmental entities such as school corporations and municipal corporations.
2. Timing of Annual Election
Election must be in writing, contain specific information, and be filed with the Health Care Financing Administration before the beginning date of the new plan year. The election must be made each year.3. Participant Notice
Plans electing to opt-out must provide each participant a notice of the decision to opt-out. The notice must contain specific information as provided in the regulations.
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III. ADDITIONAL RULES APPLICABLE ONLY TO HEALTH INSURANCE ISSUERS
A. GUARANTEED AVAILABILITY OF COVERAGE FOR EMPLOYERS IN THE SMALL GROUP MARKET1. Coverage in the Small Group Market
In a further effort to ensure the broad availability of health insurance coverage, small employers are guaranteed that coverage offered by insurance companies to other small employers in their state will be available to them. For purposes of this rule, a "small employer" is an employer who has at least two employees on the first day of the plan year, and employed an average of at least two but not more than 50 employees on business days during the preceding calendar year. These rules require health insurance issuers offering health insurance coverage to small employers to:
- Offer to any small employer in the state all products that are approved for sale in the small group market that the issuer is actively marketing and must accept any employer that applies for any of those products; and
- Accept for enrollment every eligible individual who applies when first eligible to enroll or during a special enrollment period. For purposes of this rule, the term "eligible individual" generally means an individual who is eligible to enroll under the terms of the plan.
2. Special Rules for Network Plans
Special rules apply when coverage is offered through a network plan that may allow the insurer to limit coverage to certain employers as long as certain requirements are met. If the insurer denies coverage to an employer under these circumstances, the insurer may not offer coverage in the small group market within the service area of the network plan for a period of 180 days after the date coverage is denied.
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B. GUARANTEED RENEWABILITY OF COVERAGE FOR EMPLOYERS IN THE GROUP MARKET1. General Rule
Health insurance issuers offering health insurance coverage in small (2-50 employees) or large (51 or more employees) group markets are required to renew or continue in force coverage at the option of the plan sponsor.2. Exceptions
This rule does not apply if the non-renewal or discontinuance is based on one of the following reasons:
- non-payment of premiums; or
- fraud.
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IV. INDIVIDUAL HEALTH INSURANCE CHANGES
A. GUARANTEED ACCESSIBILITY1. General Rule
Certain "eligible individuals" who lose group health insurance coverage are assured availability of coverage in the individual market, without pre-existing condition exclusions.2. Eligible Individual
For purposes of this rule, an eligible individual must meet all of the following criteria:
- The individual must have at least 18 months of creditable coverage without a significant break in coverage;
- The individual's most recent coverage must have been under a group health plan;
- The individual cannot currently be covered under any other health insurance, or be eligible for Medicare or Medicaid; and
- The individual has both elected and exhausted any continuation coverage available under COBRA or similar state continuation coverage program.
3. Broad Preclusion of Pre-Existing Condition Exclusion
Under this rule, definition of a pre-existing condition is very broad and includes any limitation relating to a condition based on the fact that the condition was present before the date of enrollment, whether or not any medical advice, diagnosis, care or treatment was recommended or received before that date.4. State Flexibility
States may implement acceptable alternative mechanisms to the federal requirements for guaranteed availability of insurance coverage. Certain requirements must be satisfied to allow the state to adopt such alternative. Both Indiana and Michigan intend to adopt an alternative mechanism.
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B. GUARANTEED RENEWABILITY1. General Rule
Health insurance issuers providing individual health insurance coverage must renew or continue in force that coverage at the option of the individual. The term "continue in force" means that the issuer maintains the same policy form that the individual purchased.2. Exceptions
Health insurance issuers may refuse to renew or continue health insurance coverage for the following reasons:
- non-payment of premiums;
- fraud;
- termination plan;
- movement outside of service area; and
- cessation of association membership.
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V. RULES AMENDING ERISA DISCLOSURE REQUIREMENTS FOR GROUP HEALTH PLANS
A. CONTENT OF SUMMARY PLAN DESCRIPTIONS1. Information About Health Insurance Issuer
Summary Plan Descriptions (SPDs) of group health plans must include information indicating whether a health insurance issuer is responsible for financing or administration of the plan. This rule is effective for plan years beginning after June 30, 1997.2. Information About Department of Labor
SPDs must also include the office at the U.S. Department of Labor through which participants and beneficiaries may seek assistance or information regarding their rights under ERISA or HIPAA with respect to health benefits. The Department of Labor amended the existing model ERISA Rights Statement to replace the last sentence for group health plans with an updated statement that should be incorporated into the ERISA Rights Statement of the SPD.
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B. MATERIAL REDUCTIONS IN COVERED SERVICES OR BENEFITS1. New Disclosure Rule
Prior to HIPAA, participants and beneficiaries were required to receive a Summary of Material Modifications describing the changes to the material provisions of the plan not later than 210 days after the end of the plan year in which the change was adopted. HIPAA has significantly accelerated the timing of that disclosure and requires that, when there is modification or change that is a material reduction in covered services or benefits provided under the plan, participants and beneficiaries must be furnished a summary of such modification or change not later than 60 days after the adoption of the modification or change, unless the plan sponsor provides summaries of modifications or changes at regular intervals of not more than 90 days. A "material reduction in covered services or benefits" generally includes any modification or change that:
- eliminates or reduces benefits payable under the terms of the plan;
- increases deductibles, co-payments, or other amounts to be paid by a participant or beneficiary;
- reduces the service area covered by an HMO; or
- establishes new conditions or requirements (such as pre-authorization requirements) to obtaining services or benefits under the plan.
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VI. THE MENTAL HEALTH PARITY ACT OF 1996
A. OUTLINE OF THE NEW REQUIREMENTS1. General Rule
Under the Mental Health Parity Act (MHPA), group health plans, insurance companies, and HMOs offering mental health benefits may not set annual or lifetime limits on mental health benefits that are lower than any such limits for medical and surgical benefits. A plan that does not impose an annual or lifetime limit on medical and surgical benefits may not impose such a limit on mental health benefits.2. Plans Affected
These requirements apply only to group health plans, insurance companies, and HMOs that choose to provide mental health benefits. MHPA does not require any plan to include mental health coverage as part of a benefit package. These requirements do not apply to small employers (2-50 employees) or to any group health plan whose costs increase 1% or more due to the application of these requirements.3. Benefits Excluded
MHPA's provisions do not apply to benefits for substance abuse or chemical dependency.4. Plan May Impose Other Restrictions on Mental Health Benefits
Plans may continue to set the terms and conditions (such as cost-sharing and limits on the number of visits or days of coverage) for the amount, duration and scope of mental health benefits.5. Effective Date
These requirements apply for plan years beginning on or after January 1, 1988. There is a so-called "sunset" provision in the law providing that these requirements will cease to apply to benefits for services furnished on or after September 31, 2001. The MHPA does not have a separate effective date for collectively bargained plans.6. Regulations Expected
It is anticipated that regulations providing further guidance on these requirements will be issued before the end of 1998.
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VII. THE NEWBORNS AND MOTHERS HEALTH PROTECTION ACT OF 1996
A. OUTLINE OF THE NEW REQUIREMENTS1. General Rule
Under the Newborns and Mothers Protection Act (NMHPA) group health plans, insurance companies and HMOs offering health coverage for hospital stays in connection with the birth of a child must provide health coverage for a minimum period of time. Specifically, coverage for a hospital stay following a normal vaginal delivery may generally not be limited to less than 48 hours for both the mother and the newborn child. Health coverage for a hospital stay in connection with a child birth following a caesarean section may generally not be limited to less than 96 hours for both the mother and newborn child.2. Plans Affected
These requirements apply only to group health plans, insurance companies and HMOs that choose to provide insurance coverage for a hospital stay in connection with the childbirth. The NMHPA does not require such plans to provide coverage for hospital stays in connection with the birth of a child. Additionally, NMHPA does not prevent a group health plan, insurance company or HMO from imposing deductibles, co-insurance or other cost-sharing measures for health benefits relating to hospital stays in connection with the childbirth, as long as such cost-sharing measures are not greater than those imposed on any preceding portion of the hospital stay. For example, if a participant is required to pay $50 co-payment for each day spent in the hospital preceding childbirth, the plan may not charge a higher co-payment or offer fewer benefits for the time NMHPA allows the employee to spend in the hospital following childbirth.3. Effective Date
These requirements are effective for plans years beginning on or after January 1, 1998. There is not a separate effective date for collectively bargained plans.4. Regulations Expected
Regulations are expected to be issued before the end of 1998 to provide additional guidance on NMHPA's rules.
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IMPORTANT NOTICE OF YOUR RIGHT TO DOCUMENTATION OF HEALTH COVERAGE
Recent changes in federal law may affect your health coverage if you are enrolled or become eligible to enroll in health coverage that excludes coverage for pre-existing medical conditions.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) limits the circumstances under which coverage may be excluded for medical conditions present before you enroll. Under the law, a pre-existing condition exclusion generally may not be imposed for more than 12 months (18 months for a late enrollee). The 12-month or (18-month) exclusion period is reduced by your prior health coverage. You are entitled to a certificate that will show evidence of your prior health coverage. If you buy health insurance other than through an employer group health plan, a certificate of prior coverage may help you obtain coverage without a pre-existing condition exclusion. Contact your state insurance department for further information.
For employer group health plans, these changes generally take effect at the beginning of the first plan year starting after June 30, 1997. For example, if your employer's plan year begins on January 1, 1998, the plan is not required to give you credit for your prior coverage until January 1, 1998.
You have the right to receive a certificate of prior health coverage since July 1, 1996. You may need to provide other documentation for earlier periods of health care coverage. Check with your new plan administrator to see if your new plan excludes coverage for pre-existing conditions and if you need to provide a certificate or other documentation of your previous coverage.
To get a certificate, complete the attached form and return it to:
[Insert Name of Entity]:[Insert Address]:
For additional information contact: [Insert Telephone Number]
The certificate must be provided to you promptly. Keep a copy of this completed form. You may also request certificates for any of your dependents (including your spouse) who were enrolled under your health coverage.
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REQUEST FOR CERTIFICATE OF HEALTH COVERAGE
Name of Participant: ________________________________ Date: ______________
Address: _______________________________________________
Telephone Number: (____)_________________________
Name and relationship of any dependents for whom certificates are requested (and their address if different from above): __________________________________________________________________________
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CERTIFICATE OF GROUP HEALTH PLAN COVERAGE
IMPORTANT -- This certificate provides evidence of your prior health coverage. You may need to furnish this certificate if you become eligible under a group health plan that excludes coverage for certain medical conditions that you have before you enroll. This certificate may need to be provided if medical advice, diagnosis, care or treatment was recommended or received for the condition within the six-month period prior to your enrollment in the new plan. If you become covered under another group health plan, check with the plan administrator to see if you need to provide this certificate. You may also need this certificate to buy, for yourself or your family, an insurance policy that does not exclude coverage for medical conditions that are present before you enroll.
a. Date of this certificate: _________________________________________
b. Name of group health plan: __________________________________________
b. Name of participant: ________________________________________________
d. Identification number of participant: ___________________________________
e. Name of any dependents to whom this certificate applies: __________________
_________________________________________________________________
f. Name, address, and telephone number of plan administrator or issuer responsible for providing this certificate: ______________________________________________________
______________________________________________________________________________
g. For further information, call: (____)____________________________________
h. If the individual(s) identified in line 3 and line 5 has at least 18 months of creditable coverage (disregarding periods of coverage before a 63-day break ), check here ____ and skip lines 9 and 10.
i. Date waiting period or affiliation period (if any) began: ___________________
j. Date coverage began: ________________________________________
k. Date coverage ended: ___________ (or check if coverage is continuing as of the date of this certificate: ___________).
Note: Separate certificates will be furnished if information is not identical for the participant and each beneficiary.
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MODEL DESCRIPTION: Special Enrollment Rights
If you are declining enrollment for yourself or your dependents (including your spouse) because of other health insurance coverage, you may in the future be able to enroll yourself or your dependents in this plan, provided that you request enrollment within 30 days after your other coverage ends. In addition, if you have a new dependent as a result of marriage, birth, adoption or placement for adoption, you may be able to enroll yourself and your dependents, provided that you request enrollment within 30 days after the marriage, birth, adoption or placement for adoption.
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Elkhart, Ind. 46516-3278
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