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HIPAA Portability Requirements

The Health Insurance Portability and Accountability Act, also known as HIPPA, is a 1996 law dealing with several aspects of medical coverage in the United States. It protects the principle of portability, meaning customers can change medical insurers--for example, after losing employer-sponsored coverage--without necessarily having to restart an exclusion period for pre-existing conditions.

  1. Pre-Existing Conditions

    • Normally when a customer takes out a new insurance policy, the insurer can impose an exclusion period for pre-existing medical conditions. During this period, the insurer does not cover the customer for any condition that was present at or before the start of the policy. HIPAA limits this exclusion period to 12 months after the policy begins. It also limits the restriction so it can only be applied where the customer was treated for the condition in the 6 months leading up to the start of the new policy.

    Creditable Coverage

    • HIPAA is designed to avoid pre-existing coverage exclusions penalizing people who change policy providers. The law means that a period of continuous coverage in a previous policy can be applied towards the new exclusion period. For example, if the customer had been covered continuously under a previous policy for 5 months, the exclusion period can be no longer than 12 months. If the customer had been covered continuously under a previous policy for 12 months or more, there can be no exclusion period.

      Continuous coverage is defined as having run with no break of more than 63 days. For example, a customer who had a previous policy run for 10 months with a 50-day break in the middle would be credited with the full 10 months. A customer who had a policy run for 5 months, then had a 3-month break, then run for another 4 months, would only be credited with the final 4 months. If more than 63 days has passed between the old policy ending and the new policy starting, the customer gets no credit.

    Benefits

    • HIPAA does not mean customers are able to take existing benefits with them when they change insurer or health plan. The new insurer is not required to offer the same level of coverage or match particular benefits offered by the previous insurer. Aside from the pre-existing conditions regulations, the customer is treated as having taken out a completely new policy when they switch provider or plan.

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