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HIPAA Creditable Coverage Rules

The Health Insurance Portability and Accountability Act, or HIPAA, ensures health protection coverage for both group health plans and individual insurance policies by providing new rights and protections for participants and beneficiaries. For group health plans, HIPAA offers coverage protection that limits exclusion for preexisting conditions, prohibits employee and dependent discrimination based on health coverage and allows special enrollment opportunities into new plans for individuals in certain circumstances.

  1. Creditable Coverage

    • Most health coverage falls into creditable coverage, such as group health plans (including Consolidated Omnibus Budget Reconciliation Act continuation coverage, or COBRA), HMOs, Medicaid, individual health insurance policies and Medicare, according to the United States Department of Labor. Creditable coverage doesn't limit itself just to coverage to excepted benefits such as limited-scope vision and dental benefits. Issuers and plans must provide certificates of creditable coverage, which are written documents specifying the length of coverage. According to the United States Department of Labor, these certificates are given to those individuals whose group coverage has ended due to job loss; the certificate must be given within a reasonable time (no later than when a qualifying event under COBRA approaches, after previous coverage ceases or after the grace period for payment on COBRA premiums ends). Other individuals who receive these certificates are those not entitled to COBRA coverage, those who have lost coverage under a group health plan, and those who have elected for COBRA continuation coverage on or after the grace period expiration for COBRA premium payments as stated by the HIPAA Privacy and Security Rules.

    Employee Dependents

    • Health plans and issuers must take reasonable efforts to gather necessary information about employee dependents and to issue creditable coverage certificates. If the same information applies to the dependent as it does to the employee, health issuers provide one certificate. However, an issuer doesn't have to provide a certificate of coverage automatically until it knows about the dependent's loss of income.

    Prior Coverage

    • HIPAA creditable coverage includes most prior coverage, so long as that previous coverage happened during a 63-day period or more without a break. Any coverage happening before the 63-day period will require the issuer to not credit against a preexisting-condition exclusion period when moving from one health plan to another---in other words, those days where health plan coverage began and ended before the break will not be credited. Prior coverage applies to a group health plan, including a governmental and church plan, a military-sponsored health care program such as the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), a program of the Indian Health Service or a health benefit plan provided for Peace Corps members as stated by the HIPAA Privacy and Security Rules.

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