by Lisa Hund Lattan
Whether you practice health law or not, the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) may well affect you and your practice. In the summer of 1996, President
Clinton signed into law HIPAA, which is a modified version of the Kennedy-Kassebaum health
insurance bill. January 1, 1998, is the date the changes required by this law finally will become a
reality for many individuals and their employers.
Among the sweeping changes made by HIPAA are strict limits on the ability of health insurance
companies and self-insured health plans to apply traditional pre-existing condition restrictions to
new participants. These changes are significant for your clients who offer health insurance to
their employees. And, they may be important to you if you decide to change jobs in the near
future!
A pre-existing condition restriction is a health plan's limit on coverage for (or, in some cases,
refusal of coverage for) conditions in existence prior to an individual's eligibility for coverage
under that plan. Historically, pre-existing condition restrictions have severely limited the ability
of individuals with chronic health problems to change insurance.
What are the major components of HIPAA's changes? Although the details of the law are fairly
complicated and there are some exceptions and special rules, HIPAA's main points can be
summarized as follows:
- A health insurer or self-insured group health plan may apply a pre-existing condition
requirement only under the following circumstances: [a] the restriction can be applied only to a
condition for which the individual received medical advice, diagnosis, care, or treatment (or a
recommendation for such) during the six-month period before his or her enrollment date, and [b]
the coverage denial period for the pre-existing condition can't exceed 12 months (18 months for
certain "late enrollees").
- More importantly, the coverage denial period described above must be reduced by the
individual's "creditable coverage." In a nutshell, the creditable coverage rules under HIPAA
mean that a person's prior coverage under another group health plan, health insurance policy,
Medicare, or certain other government programs counts toward satisfaction of the coverage
denial period under a new group health plan. For many employees, the creditable coverage rules
will allow them to skip completely any coverage denial period for pre-existing conditions applied
by a new employer's health plan. (Note: Creditable coverage can be lost if there is more than
roughly a two-month break between coverages.)
- HIPAA requires employers to provide employees who lose coverage under their health
plans with certificates detailing their creditable coverage. These certificates will be used to prove
creditable coverage when an individual changes from one health plan to another.
In addition to the rules outlined above, HIPAA includes tough limits on health plans' ability to
impose pre-existing condition restrictions on newborns and pregnant women.
Lisa Hund Lattan is Chair of YLD's Tax Law Committee and an attorney with American
Century Investments
in Kansas City, Missouri.
FOR MORE INFORMATION on HIPAA, see The Health Lawyer, Vol. 9, Number 3, the newsletter of the Health
Law Section, the ABA's newest Section. In addition to the bimonthly newsletter, Section
members receive an annual directory and monographs based on recent educational programs.
Topics of the monographs, which are full-length books distributed free to Section members,
include Health Care Mergers and Acquisitions, Health Care Facility Records: Confidentiality,
Computerization and Security, and Antitrust Developments for Health Providers.
Section members also have access to numerous programs and CLE opportunities throughout the
year that are sponsored or cosponsored by the Section. For example, the Section cosponsored
with the ABA Journal, the first ABA Connection, (the teleconference and related article in the
ABA Journal that offers state-approved CLE).
Recognizing that young lawyers make up nearly a third of its 8,600 members, the Section is
committed to providing programs, services, and networking opportunities for those new to this
hot area of the law. Health Law Fundamentals was a successful 1997 ABA Annual Meeting
program that the Section will repeat at the 1998 Annual Meeting in Toronto.
For more info on Section membership, call (312) 988-5660, or visit the Section's Web site at
[http://www.abanet.org/health].
