Private Health Insurance Protections: The Health Insurance Portability and Accountability Act

1. Private Health Insurance Protections: The Health Insurance Portability and Accountability Act

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4. Training Sections • Private Health Coverage Basics • HIPAA and Private Health Coverage Protections • HIPAA and the Affordable Care Act of 2010 • Resources on HIPAA and the ACA

5. Training Section 1 Private Health Coverage Basics

6. 3 Main Types ofHealth 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.

7. 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.

8. Working and Private Health Care Beneficiaries will access private health coverage when they go to work. This is employer-sponsored 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

9. 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.

10. 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

11. 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).

12. 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.

13. 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.

14. 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

15. Training Section 2 HIPAA and Private Health Coverage Protections

16. 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

17. 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 pre-existing condition exclusionary period – not both. • Maximum affiliation period: 2 months (3 months for late enrollees)

18. Employer-sponsored GroupHealth 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.

19. Private Health Coverage ProtectionsStarting, 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.

20. Employer-sponsored GroupHealth 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

21. 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.

22. 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.

23. 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. .

24. 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).

25. 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). P 8 States naic

26. 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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

32. 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 applyin later subsequent enrollment periods.

33. 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

34. 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)

35. 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

36. Training Section 3 HIPAA and the Affordable Care Act of 2010

37. 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

38. 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.

39. 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.

40. 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.

41. 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.

42. 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.

43. Training Section 4 Resources on HIPAA and the Affordable Care Act of 2010

44. Resources on HIPAA and Private Coverage U.S. Department of Labor: HIPAA information, factsheets and FAQs: http://www.dol.gov/dol/topic/health-plans/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.

45. 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

46. Resources A Consumer Guide to Handling Disputes with Your Employer or Private Health Plan, Kaiser Family Foundationhttp://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