YOUR HEALTH PLAN

AND HIPAA...

MAKING THE LAW WORK

FOR YOU
This publication has been developed by the U.S. Department of Labor,

Employee Benefits Security Administration, and is available on the Web at

www.dol.gov/ebsa. 

For a complete list of the agency's publications, call toll free:

1-866-444-EBSA (3272).

This material will be made available in alternate format upon request:

Voice phone: 202-693-8664 TTY: 202-501-3911

This booklet constitutes a small entity compliance guide for purposes of the Small Business

Regulatory Enforcement Act of 1996.

Printed July2007
YOUR HEALTH PLAN

AND HIPAA...

MAKING THE LAW WORK

FOR YOU
HIPAA is the Health Insurance Portability and

Accountability Act of 1996
TABLE OF CONTENTS

INTRODUCTION_________________________________

CHAPTER 1

PREEXISTING CONDITIONS,

JOB CHANGES, AND

GENERAL PROTECTIONS__________________________

CHAPTER 2

USING PRIOR HEALTH COVERAGE

TO REDUCE THE LENGTH OF

ANY PREEXISTING CONDITION

EXCLUSION PERIOD______________________________

CHAPTER 3

GETTING AND USING A

CERTIFICATE TO SHOW PRIOR

HEALTH PLAN COVERAGE_________________________

CHAPTER 4

TAKING ADVANTAGE

OF SPECIAL ENROLLMENT

OPPORTUNITIES_________________________________

CHAPTER 5

HIPAA’S PROTECTIONS

FROM DISCRIMINATION___________________________

CHAPTER 6

MORE COVERAGE UNDER

HIPAA’S UMBRELLA______________________________

RESOURCES___________________________________

GLOSSARY____________________________________

2

4

7

10

13

16

20

24

26
Perhaps you have heard of HIPAA – the Health Insurance Portability

and Accountability Act – during a visit to your doctor's office. The

doctor's staff may have handed you a "HIPAA privacy notice" advising

you of protections for your personal health information. But HIPAA

covers a lot more than privacy.

For many people, health coverage is an important benefit of

their jobs. At the time HIPAA was passed, a lot of people were afraid

to switch jobs because they might lose the insurance coverage they

needed for their families. This publication will explain how HIPAA’s

protections make it easier to change employers without losing health

coverage for your (and your family’s) medical conditions.

HIPAA's umbrella of protection:

—Limits the ability of a new employer plan to exclude coverage

for preexisting conditions;

—Provides additional opportunities to enroll in a group health plan

if you lose other coverage or experience certain life events;

—Prohibits discrimination against employees and their dependent

family members based on any health factors they may have,

including prior medical conditions, previous claims experience,

and genetic information; and 

—Guarantees that certain individuals will have access to, and

can renew, individual health insurance policies.

2

INTRODUCTION

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU
U.S. Department of Labor Employee Benefits Security Administration 3

HIPAA is complemented by state laws that, while similar to HIPAA,

may offer more generous protections. You may want to contact your state

insurance commissioner's office to ask about the law where you live. A good

place to start is the Web site of the National Association of Insurance

Commissioners at www.naic.org . 

Before you read on, note that this booklet focuses on HIPAA’s coverage

as it applies to private-sector group health plans only. State and local

government employees should contact the Centers for Medicare and

Medicaid Services at the U.S. Department of Health and Human Services

(www.cms.hhs.gov) about whether they have comparable protections.

Any terms that are highlighted like this in the text are explained

in the Glossary. 

YOUR HEALTH PLAN AND HIPAA ... MAKING THE LAW WORK

FOR YOU does not cover HIPAA in its entirety; it is an informal explanation of

the law and Federal regulations, not a legal interpretation. If you have

additional questions, refer to the Resources section or contact the EBSA

regional office nearest you. For a list of offices, visit the agency's Web site at

www.dol.gov/ebsa or call 1-866-444-EBSA (3272) to be connected to a

regional office. 
YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

CHAPTER 1

PREEXISTING CONDITIONS,

JOB CHANGES, AND

GENERAL PROTECTIONS

4

One of the most important protections under HIPAA is that it helps those with preexisting conditions

get health coverage. In the past, some employers' group health plans limited, or even denied,

coverage if a new employee had such a condition before enrolling in the plan. Under HIPAA, that is

not allowed. If the plan generally provides coverage but denies benefits to you because you had a

condition before your coverage began, then HIPAA applies.

Under HIPAA, a plan is allowed to look back only 6 months for a condition that was present

before the start of coverage in a group health plan. Specifically, the law says that a preexisting

condition exclusion can be imposed on a condition only if medical advice, diagnosis, care, or

treatment was recommended or received during the 6 months prior to your enrollment date in the

plan. As an example, you may have had arthritis for many years before you came to your current job.

If you did not have medical advice, diagnosis, care, or treatment – recommended or received -- in the

6 months before you enrolled in the plan, then the prior condition cannot be subject to a preexisting

condition exclusion. If you did receive medical advice, diagnosis, care, or treatment within the past 6

months, then the plan may impose a preexisting condition exclusion for that condition (arthritis).

In addition, HIPAA prohibits plans from applying a preexisting condition exclusion to

pregnancy, genetic information, and certain children (see page 5).

If you have a preexisting condition that can be excluded from your plan coverage, then there

is a limit to the preexisting condition exclusion period that can be applied. HIPAA limits the

preexisting condition exclusion period for most people to 12 months (18 months if you enroll late),

although some plans may have a shorter time period or none at all. In addition, some people with a

history of prior health coverage will be able to reduce the exclusion period even further using

creditable coverage. (Read Chapter 2 to learn more.) Remember, a preexisting condition exclusion

relates only to benefits for your (and your family’s) preexisting conditions. If you enroll, you will

receive coverage for the plan’s other benefits during that time.
U.S. Department of Labor Employee Benefits Security Administration 5

Although HIPAA adds protections and makes

it easier to switch jobs without fear of losing health 

coverage for a preexisting condition, the law has

limitations. For instance, HIPAA: 

—Does not require that employers offer health

coverage;

—Does not guarantee that any conditions you now

have (or have had in the past) are covered by your

new employer's health plan; and

—Does not prohibit an employer from imposing a

preexisting condition exclusion period if you have

been treated for a condition during the past 6 months.

(But see Chapter 2 on creditable coverage to reduce

or eliminate the exclusion.)

Typical Questions

about Preexisting Conditions

and HIPAA: 

Q Can a plan deny benefits for chronic illnesses or

injuries, like carpal tunnel syndrome, diabetes, heart

disease, and cancer using a preexisting condition

exclusion? 

A It depends on whether you received medical advice,

care, diagnosis, or treatment within the 6 months prior

to enrolling in a new employer’s plan. If you did, you

can be subject to a preexisting condition exclusion.

Q Are there illnesses or injuries that cannot be subject

to a preexisting condition exclusion?

A Yes, as follows: 

—Pregnancy, even if the woman had no prior

coverage before enrolling in her current employer's

plan.

—Conditions present in a newborn or a child under

18 who is adopted or placed for adoption (even if the

adoption is not yet final), as long as the child is

enrolled in health coverage within 30 days of birth,

adoption, or placement for adoption. In addition, the

child must not have a subsequent, significant break

in coverage (defined as 63 days). For instance, a

significant break might occur if a parent lost his job

and health coverage for himself and his family shortly

after a child’s birth. This break will be discussed in

the next chapter. 

—Genetic information. For example, if a woman is

found to have a gene indicating she is at a higher risk

for breast cancer, she cannot be denied coverage if

there is no diagnosis of the disease.

Q I just changed jobs. Seven months ago, I received

my last treatment for carpal tunnel syndrome. Can my

new employer’s plan apply a preexisting condition

exclusion?

A No. If your last treatment was more than 6 months

before enrollment in your new employer's health plan

and you have had no other advice or care relating to

your carpal tunnel syndrome in the last 6 months, your

condition cannot be subject to a preexisting condition

exclusion.

Q My new employer has a waiting period before any

new hire can enroll in the group health plan. How

does this relate to a preexisting condition exclusion

period?

A An employer's health plan may indeed have a

waiting period before any employee and his/her

dependent family members can enroll. If that is the

case, the plan booklet (called a summary plan

description (SPD)) will say so. 

If a plan has a general waiting period and a

preexisting condition exclusion period, both time

periods must run concurrently. For example, an

employer may impose a 3-month waiting period for all

employees to begin health coverage. Some employees
6

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

12-month maximum preexistingcondition exclusion period

3-month waiting period 9-month maximum preexisting condition exclusion period remaining

Enrollment date The date coverage begins End of maximum

preexisting condition

exclusion period

may also be subject to the maximum preexisting

condition exclusion period of 12 months. In this

example, the maximum preexisting condition

exclusion period remaining is 9 months long, as

illustrated above.

Be aware that your plan may not have a

preexisting condition exclusion period, so be sure you

know your new company's policy when you enroll.

Q What happens if I don't enroll in my employer's

health plan at the first chance? 

A If, for some reason, you did not enroll in your new

employer's health plan at the first opportunity but do

so at a later time, you are a late enrollee. For example,

assume an employee declines coverage in his

employer’s health plan when he starts his new job.

This employee decides to enroll 2 years later during an

open enrollment period. At the time the employee

wishes to enroll, there is no special enrollment

opportunity (the right to enroll regardless of regular

enrollment dates, see Chapter 4 for when this right

arises). When the employee elects coverage, he is a

late enrollee.

Being a late enrollee will not cause you to lose

HIPAA’s protections. One immediate consequence,

however, is that the maximum preexisting condition

exclusion period is 18 months, rather than the 12

months for those who enroll at the first chance. 

Q Are all family members, including a spouse, covered

by HIPAA? 

A If your group health plan permits coverage of family

members ("dependents"), and if they participate in the

plan, then they will have the same HIPAA protections as

employees, described above. 

Q Are there protections on discrimination in pricing

if I have a ppreexisting condition? 

A Yes. Protections against discrimination will be

discussed in Chapter 5.

TIPS

—Even if your plan applies a preexisting condition

exclusion, you are still covered for the plan's other

benefits – as long as you enroll. 

—If you have a baby or adopt a child, enroll the child

in health coverage within 30 days.

—Remember, a new health plan can look back 6

months when reviewing for a preexisting condition,

and the maximum amount of time of a preexisting

condition exclusion period is usually 12 months (18

months for late enrollees).

—If you have a preexisting condition, try to avoid a

63-day significant break in coverage. If you can do so,

you may be able to reduce the amount of time of a

preexisting condition exclusion in a new employer’s

plan. (Read Chapter 2 to learn more about reducing

a preexisting condition exclusion with creditable

coverage.) 
CHAPTER 2

USING PRIOR HEALTH COVERAGE

TO REDUCE THE LENGTH OF

ANY PREEXISTING CONDITION

EXCLUSION PERIOD

U.S. Department of Labor Employee Benefits Security Administration 7

If you change jobs or begin new health coverage, and you or a dependent family member have a

preexisting condition, Chapter 1 discussed how HIPAA limits the maximum preexisting condition

exclusion to 12 months (18 months if you are a late enrollee). 

This chapter covers how an individual can reduce or eliminate this maximum preexisting

condition exclusion period if he can show creditable coverage.

—Most health coverage can be used as creditable coverage, including participation in a

group health plan, COBRA continuation coverage, Medicare and Medicaid, as well as coverage

through an individual health insurance policy. (Read more about COBRA and HIPAA in

Chapter 6.)

—However, you should try to avoid a significant break in coverage (63 days) if you want to be

able to count your previous coverage. If you have a break shorter than 63 days, coverage you

had before that break is creditable coverage and can be used to offset a preexisting condition

exclusion period.

—Days spent in a waiting period for coverage cannot be used as credit. But, they also are

not counted toward the significant break (63 days) you are trying to avoid. 

Typical Questions about Creditable Coverage: 

Q Is there a limit to the period of time I can go without coverage between jobs if I want to reduce

the length of a preexisting condition exclusion? 

A Yes. The break in coverage between one period of health coverage and another can be no longer

than 63 days (just over 2 months). If you are between jobs and do not have health coverage for 63

days or more, then you may lose the ability to use the coverage you had before the break to offset a

preexisting condition exclusion period in a new health plan. 
8

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

Q I began working for a new employer 45 days after my

prior group health plan was terminated. I had

continuous coverage in my former employer's plan for

24 months with no other coverage between jobs. Can I

be subject to a preexisting condition exclusion period? 

A No, not if you enroll when you are first eligible. 

Those 45 days do not count as a significant break in

coverage. Also, since you have more than 12 months of

continuous coverage in a prior health plan, it can be

used to fully offset and eliminate the maximum

preexisting condition exclusion period under a new

plan. 

Q I have a preexisting condition. I began employment

at my current job 100 days after I resigned from my

previous job. I had continual coverage in my previous

employer's health plan for 36 months but none

between jobs. Can I be excluded from coverage? 

A Possibly. Remember that under HIPAA, health

coverage prior to a significant break cannot be used to

offset a preexisting condition exclusion period.

However, your state law may be more generous if you

have coverage with an insured plan. If your state

lengthened the significant break from 63 days to, for

instance, 120 days, then you can use your prior

coverage from a previous job as creditable coverage. 

Check your plan’s summary plan description (SPD) to

see if your plan is insured. If it is, check with your state

insurance commissioner’s office at www.naic.org to see

what your state law provides. 

Q How do I calculate the length of a preexisting

condition exclusion in a new employer’s health plan? 

A Suppose an employee had coverage for 2 years,

followed by a break of 70 days. The employee then

resumes coverage for 8 months before moving to a new

job, with no time off between jobs. He enrolls in the

health plan at the new job as soon as possible. 

A preexisting condition exclusion can last 12

months at most, if the person enrolls when first eligible.

This employee has 8 months of creditable coverage. His

earlier 2 years of health coverage are not creditable

because he had a break in coverage that was more than

the 63 days allowed under the law. His preexisting

condition exclusion will last 4 months after he enrolls in

the employer's health plan. 

If the same employee had a break in coverage

of only 60 days, his story would be different. This would

not be a significant break and he could use the earlier 2

years of coverage to completely offset the preexisting

condition exclusion period.

 

Q How do I avoid a 63-day significant break in health

coverage?

A There are several ways:

—If a spouse has coverage in a health plan that

allows family members to join, you may want to

enroll. (For a discussion of special enrollment, see

Chapter 4.)

—If your last coverage was in a group health plan,

you may want to sign up for COBRA continuation

coverage. While you (and your family members, if

they were also part of your prior plan) will have to pay

for this temporary coverage, COBRA can prevent or

reduce a break in coverage. (Learn more about

COBRA in Chapter 6.)

—You can buy an individual health insurance policy

if you think you would otherwise have a break of 63

days or more.

—Some states have high-risk pools for people who

cannot otherwise get health benefits. Your state

insurance commissioner's office can tell you if such a

pool exists where you live. 
U.S. Department of Labor Employee Benefits Security Administration 9

Creditable coverage can

reduce or eliminate a

preexisting condition exclusion

period.

Q Is there anything I can do if I have a preexisting

condition and the credit I received from my last health

plan does not cover my new employer's preexisting

condition exclusion period? 

A Yes. You can look into: 

—Electing COBRA coverage from your former

employer’s plan;

—Buying an individual health insurance policy; or

—Checking with another plan you’re eligible for,

such as a spouse’s plan, to see if you can enroll. 

Q How do I prove my creditable coverage?

A Usually, the information is given in a certificate of

creditable coverage. (Learn more about the certificate

in the next chapter.)

TIPS

—HIPAA allows for short breaks when you are

counting back to accumulate creditable coverage.

For example, you have a break in coverage of 30

days, followed by more coverage, and then followed

by another 30-day break. Both periods of health

coverage can be counted as you add up the time

spent in prior health plans.

As long as any break is no longer than 63

days, you will not have a significant break. You can

continue to count back coverage to accumulate 12 (or

18 for late enrollees) months of total coverage. 

—Try to avoid a significant break in coverage. Look

to a spouse’s plan, COBRA continuation coverage, or

an individual policy.
10

CHAPTER 3

GETTING AND USING A

CERTIFICATE TO SHOW PRIOR

HEALTH PLAN COVERAGE

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

Your group health plan, HMO, or health insurance company should provide you with a certificate of

creditable coverage, a document that shows your prior periods of coverage in a health plan:

—Before you lose your present coverage: If you know you will be leaving a job, you can request a

certificate, free of charge. 

—After coverage ends: You should receive a certificate automatically upon loss of coverage, even if

you are also eligible for COBRA continuation coverage. If you don’t get one, or if you need a new one,

you can request a certificate, free of charge, up to 24 months after prior coverage ends.

—When COBRA coverage ends: You should also automatically receive a certificate when COBRA

continuation coverage ends. 

With your permission, another person can request a certificate of creditable coverage

on your behalf.

Typical Questions about Creditable Coverage: 

Q What information will be on the certificate?

A In addition to standard identification information, the certificate will include the dates on which

your prior health plan coverage began and ended. The certificate also should have contact

information so that old and new plans can be in touch if necessary. Finally, there should be

information about your HIPAA rights. 

Q What amount of time should a certificate cover? 

A The amount of time depends on whether you receive the certificate automatically or upon request.
11

health plan. Evidence can include: 

—Pay stubs that reflect a deduction for health

coverage premiums;

—Copies of premium payments or other documents

showing evidence of coverage;

—Explanation of benefit forms; and

—Verification by a doctor or your former health plan.

In addition to providing these documents, an

individual may be asked to attest to the period of

creditable coverage and cooperate with the new plan’s

reasonable efforts to verify creditable coverage.

You should still get in touch with the old plan’s

administrator to request a certificate for your records.

The administrator’s contact information is usually

included in the plan brochure you received when you

signed up for health coverage.

Q Are health plans required to issue certificates of

creditable coverage to dependents? 

A Yes. A plan must make every reasonable effort to

collect dependent information and then issue

certificates to dependents if they are also covered. 

However, if an employee and a dependent have the

same coverage, only one certificate reflecting both

individuals may be issued. 

U.S. Department of Labor Employee Benefits Security Administration

—The automatic certificate should reflect at least the

most recent period of continuous coverage.

—The certificate issued at your request or a

dependent’s should reflect at least each period of

creditable coverage within the prior 24 months. The

certificate does not have to reflect more than 18

months of continuous health coverage (the longest

possible preexisting condition exclusion period)

without a significant break.

Q When must my employer provide the certificate? 

A —If you’re eligible for COBRA, the certificate

must be provided no later than your COBRA

election notice (generally 44 days after a qualifying

event).

—For all other automatic certificates, generally

you should receive it within a reasonable amount

of time after coverage ends.

—The plan should provide a requested certificate

as early as possible. 

Also, be aware that health plans must

issue certificates, even if they do not exclude coverage

for preexisting conditions. While an employee may not

need a certificate in a current job, she might if a future

employer’s plan has a preexisting condition exclusion. 

Q What steps should I take if I didn't get a certificate

or I lose it? How can I show that I had prior coverage?

A If your new plan imposes a preexisting condition

exclusion, your claims processing will go smoother if

you don’t delay. There is an alternate way to show that

you had creditable coverage – you can present

evidence of your prior health coverage to your new
TIPS

—In case you lose your certificate or can't get one,

make sure you have other documents, such as pay

stubs or copies of premium payments, that show you

had coverage.

 —When you leave a job, you may receive several

documents from your previous employer or health

plan. Look for the certificate of creditable coverage (it

may be identified as a “certificate of group health plan

coverage”) and file it with other important papers. 

Q What are the next steps after I get my certificate?

A First, check it for accuracy. Does it reflect the

amount of time you had prior coverage? Does it

include the contact information of the issuer in case

your old and new plans need to communicate? Is your

personal data correct? Second, either give it to your

new employer (after you make a copy for yourself) or

file it away in a safe place.

12

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

Health plans must issue

certificates, even if they do

not exclude coverage

for preexisting conditions.
CHAPTER 4

TAKING ADVANTAGE

OF SPECIAL ENROLLMENT

OPPORTUNITIES

U.S. Department of Labor Employee Benefits Security Administration 13

Special enrollment allows individuals who previously declined health coverage to enroll for

coverage. Special enrollment rights arise regardless of a plan’s open enrollment period.

There are two types of special enrollment – upon loss of eligibility for other coverage and

upon certain life events. Under the first, employees and dependents who decline coverage due to

other health coverage and then lose eligibility or lose employer contributions have special

enrollment rights. For instance, an employee turns down health benefits for herself and her family

because the family already has coverage through her spouse’s plan. Coverage under the spouse’s

plan ceases. That employee then can request enrollment in her own company’s plan for herself

and her dependents.

Under the second, employees, spouses, and new dependents are permitted to special

enroll because of marriage, birth, adoption, or placement for adoption.

For both types, the employee must request enrollment within 30 days of the loss of

coverage or life event triggering the special enrollment.

Typical Questions about Special Enrollment: 

Q What are some examples of events that can trigger a loss of eligibility for coverage? 

A Loss of eligibility for coverage may occur when: 

—Divorce or legal separation results in you losing coverage under your spouse’s

health insurance;

—A young dependent, because of age, work, or school status, is no longer a covered

"dependent" under a parent’s plan;
—Your spouse’s death leaves you without coverage

under his or her plan;

—Your spouse’s employment ends, as does

coverage under his employer’s health plan;

—Your employer reduces your work hours to the

point where you are no longer covered by the health

plan;

—Your plan decides it will no longer offer coverage

to a certain group of individuals (for example, those

who work part time); 

—You no longer live or work in the HMO’s service

area;

—You have a health claim that would meet or exceed

the plan's lifetime limit on all benefits. 

These should give you some idea of the types

of situations that may entitle you to a special

enrollment right.

Q How long do I have to request special enrollment?

A The employee or dependent must request

enrollment within 30 days after losing eligibility for

coverage or after a marriage, birth, adoption, or

placement for adoption. 

Q After I request special enrollment, how long will I

wait for coverage? 

A It depends on what triggers your right to special

enrollment. Those taking advantage of special

enrollment as a result of a birth, adoption, or

placement for adoption begin coverage no later than

the day of the event.

14

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

For special enrollment due to marriage or loss

of eligibility for other coverage, your new coverage will

begin on the first day of the first month after the plan

receives the enrollment request. If the plan receives

the request on January 3, for example, coverage would

begin on February 1. 

Q What happens if a special enrollee has a preexisting

condition?

A A preexisting condition exclusion cannot apply to a

special enrollee for longer than 12 months. As with

those who signed up with the plan at the first

opportunity, a special enrollee can show creditable

coverage and reduce or eliminate the maximum

preexisting condition exclusion period. 

A newborn, an adopted child, or a child placed

for adoption cannot have a preexisting condition

exclusion, as long as the child is enrolled in health

coverage within 30 days of the event, without a

subsequent significant break in coverage.

Q Where do I find out more about special enrollment in

my plan? 

A A description of special enrollment rights should be

included in the plan materials you received when

initially offered the opportunity to enroll. 

Q What coverage will I get when I take advantage of a

special enrollment opportunity?

A Special enrollees must be offered the same benefits

that would be available if you are enrolling for the first

time. Special enrollees cannot be required to pay more

for the same coverage and cannot have longer

preexisting condition exclusion periods. 

 
U.S. Department of Labor Employee Benefits Security Administration

The employee or dependent

must request special enrollment

within 30 days after losing eligibility

for coverage or after a marriage, birth,

adoption, or placement for adoption.

15

TIPS

—Become familiar with the events that can trigger a

special enrollment right; you must request coverage

and you need to act promptly. 

—Be sure you request enrollment within 30 days of a

marriage, a birth, an adoption, the placement of a

child for adoption, or any event that results in a loss of

eligibility for health coverage.

The employee or dependent

must request special enrollment

within 30 days after losing eligibility

for coverage or after a marriage, birth,

adoption, or placement for adoption.
CHAPTER 5

HIPAA’S PROTECTIONS

FROM DISCRIMINATION

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

16

The previous chapters explain how to use HIPAA’s preexisting condition and special enrollment

protections by being aware of their timelines and requirements. The more you know, the better

equipped you will be. The same is true for HIPAA and discrimination in health coverage: The more

you know about the ways HIPAA prohibits discrimination, the better.

Under HIPAA, you and your family members cannot be denied eligibility or benefits based on

certain "health factors" when enrolling in a health plan. In addition, you may not be charged more

than similarly situated individuals (see page 17) based on any health factors. The questions and

answers below define the health factors and offer some examples of what is and is not permitted

under the law.

Typical Questions about Discrimination in Health Care: 

Q What are the health factors under HIPAA?

A The health factors are: 

—Health status;

—Medical conditions, including physical and mental illnesses;

—Claims experience;

—Receipt of health care;

—Medical history;

—Genetic information;

—Evidence of insurability (see below); and

—Disability.

Conditions arising from acts of domestic violence as well as participation in activities like

motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, and skiing are considered

“evidence of insurability.” Therefore, a plan cannot use them to deny you enrollment or charge you

more for coverage. (However, benefit exclusions known as “source of injury exclusions” could affect

your benefits. These exclusions are discussed in more detail later in this chapter.)
17

Q Can a group health plan require me to pass a

physical examination before I am eligible to enroll? 

A No. You do not have to pass a physical exam to be

eligible for enrollment. This is true for individuals who

enroll when first eligible, as well as for late and special

enrollees. 

Q Can my plan require me to take a physical exam or

fill out a health care questionnaire in order to enroll?

A Yes, as long as it does not use individual health

information to restrict enrollment or charge you more.

Q My group health plan required me to complete a

detailed health history questionnaire and then

subtracted “health points” for prior or current health

conditions. To enroll in the plan, an employee had to

score 70 out of 100 total points. I scored only 50 and

was denied a chance to enroll. Can the plan do this?

A No. In this case the plan used health information to

exclude you from enrolling in the plan. This practice is

discriminatory, and it is prohibited. 

Q My group health plan booklet states that if a

dependent is confined to a hospital or other medical

facility at the time he is eligible to enroll in the plan,

that person's eligibility is postponed until he is

discharged. Is this permitted? 

A No. A group health plan may not delay an

individual's eligibility, benefits, or effective date of

coverage based on confinement to a hospital or

medical facility at the time he becomes eligible. 

Additionally, a health plan may not increase that

person's premium because he was in a hospital or

medical facility. 

U.S. Department of Labor Employee Benefits Security Administration

Q My group health plan has a 90-day waiting period

before allowing employees to enroll. If an individual is

in the office on the 91st day, health coverage begins

then. However, if an individual is not "actively at work"

on that day, the plan states that coverage is delayed

until the first day that person is actually at

work. I missed work on the 91st day due to illness. 

Can I be excluded from coverage? 

A No. A group health plan generally may not deny

benefits because someone is not "actively at work" on

the day he would otherwise become eligible. 

However, a plan may require employees to

begin work before health plan coverage is effective. A

plan may also require an individual to work full time

(say, 250 hours per quarter or 30 hours per week) in

order to be eligible for coverage. 

Q My group health plan imposes a 12-month

preexisting condition exclusion period. After the first 6

months, however, it is waived for individuals who have

not had any claims since enrollment. Is this practice

allowed?

A No. A group health plan may impose a preexisting

condition exclusion period, but it must be applied

uniformly. In this case, the plan is not applying its

provisions uniformly, since it is treating differently

those who had medical claims during the first 6

months of coverage. 

Q How do you determine "similarly situated

individuals"? 

A HIPAA states that plans may distinguish among

employees only on “bona fide employment-based

classifications” consistent with the employer’s usual
18

business practice. For example, part-time and fulltime employees, employees working in different

geographic locations, and employees with different

dates of hire or lengths of service can be treated as

different groups of similarly situated individuals. 

A plan may draw a distinction between

employees and their dependents. Plans can also make

distinctions between beneficiaries themselves if the

distinction is not based on a health factor. For

example, a plan can distinguish between spouses and

dependent children, or between dependent children

based on their age or student status.

Q My health plan has a $500,000 lifetime limit on all of

the benefits covered in the plan. In addition, there is a

$2,000 lifetime limit on all benefits provided for one of

my health conditions. Can a plan set these kinds

of restrictions? 

A Yes. A group health plan may apply lifetime limits

generally or for a specific disease or treatment –

provided the limits are applied uniformly to similarly

situated individuals and are not directed at specific

employees or dependents based on any health factors

they may have.

Q I have a history of high claims. Can I be charged

more than others in the plan based on my claims

experience? 

A No. Group health plans cannot charge an individual

more for coverage than a similarly situated individual

based on any health factor. 

However, be aware that HIPAA does allow an

insurer to charge one group health plan (or employer)

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

a higher rate than it does another. When an

insurance company establishes its rates, it may

underwrite all covered individuals in a specific plan

based on their collective health status. The result can

be that one employer health plan whose enrollees have

more adverse health factors can be charged a higher

premium than another for the same amount of

coverage.

Think of it this way: HIPAA’s protections from

discrimination apply within a group of similarly situated

individuals, not across different groups of similarly

situated individuals. For example, an employer

distinguishes between full-time and part-time

employees. It can charge part-time employees more for

coverage, but all full-time employees must pay the same

rate, regardless of health status.

Also, take note that, for insured plans, state law

may require the use of other methods for setting rates

for health coverage. More information is available at

www.naic.org.

Q I am an avid skier. Can my employer's plan exclude

me from enrollment because I ski?

A No. Participation in activities such as skiing would be

"evidence of insurability," which is a health factor.

Therefore, it cannot be used to deny eligibility. 

Q Can my health plan deny benefits for an injury based

on how I got it?

A Maybe. A plan can deny benefits based on an injury's

source, unless an injury is the result of a medical

condition or an act of domestic violence. 

Therefore, a plan cannot exclude coverage for

self-inflicted wounds, including those resulting from

attempted suicide, if they are otherwise covered by the

plan and result from a medical condition (such as

depression). 
U.S. Department of Labor Employee Benefits Security Administration 19

Q I belong to a group health plan that rewards individuals

who volunteer to be tested for early detection of health

problems, such as high cholesterol. Can a plan do this? 

A Yes, as long as the health plan offers the reward based

on participation in the program and not on test results. 

For instance, a health plan might offer a premium

discount for those who voluntarily test for cholesterol. 

The discount would be available to everyone who takes

the test, not just those who get a certain result. 

Q Can a plan charge a lower premium for nonsmokers

than it does for smokers? 

A For wellness programs where the plan offers a reward

based on an individual’s ability to meet a standard related

to a health factor (such as a standard related to

smoking/nicotine addiction), the rules require that: 

—The reward, such as a premium differential, must

generally not exceed 20 percent of the cost of employeeonly coverage under the plan. If the program allows an

employee’s dependents (such as spouses or children) to

participate, then the reward must not exceed 20 percent

of the cost of the coverage in which the employee and

any dependents are enrolled;

—The program must be designed to promote good

health or prevent disease;

—Individuals must have a chance to qualify for the

nonsmoker’s premium discount at least once a year;

—The program must accommodate those for whom it

is unreasonably difficult to quit using tobacco (for

example, due to nicotine addiction) by providing a

reasonable alternative standard (such as a discount in

return for attending educational classes or for trying a

nicotine patch); and

—Plan materials describing the wellness program must

disclose the availability of a reasonable alternative

standard to qualify for the lower premium.

(The wellness program rules are generally effective for plan years

starting on or after July 1, 2007. Contact EBSA at 1-866-444-EBSA

(3272) or electronically at http://askebsa.dol.gov for more information.)

However, a plan may exclude coverage for

injuries that do not result from a medical condition or

from domestic violence. For example, a plan generally

can exclude coverage for injuries in connection with

an activity like bungee jumping. While the bungee

jumper may have to pay for treatment for those

injuries, her plan cannot exclude her from coverage for

the plan’s other benefits. 

Q My group health plan says that dependents are

generally eligible for coverage only until they reach age

25. However, this age restriction does not apply to

disabled dependents, who seem to be covered past age

25. Does HIPAA permit a policy favoring disabled

dependents? 

A Yes. A plan can treat an individual with an adverse

health factor (such as a disability) more favorably by

offering extended coverage. 

TIP

—Call EBSA toll free at 1-866-444-EBSA (3272) or

contact us electronically at http://askebsa.dol.gov if

you believe you are the subject of discrimination due

to a health factor. 

HIPAA and Wellness Programs

More and more employers are establishing wellness

programs that encourage employees to work out, stop

smoking, and generally adopt healthier lifestyles.

HIPAA encourages group health plans to adopt

wellness programs but also includes protections for

employees and dependents from impermissible

discrimination based on a health factor. The questions

and answers below provide some guidance regarding

wellness programs. 
20

CHAPTER 6

MORE COVERAGE UNDER

HIPAA’S UMBRELLA

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

Flexibility in State Laws

State laws may complement HIPAA by allowing more protections than the Federal law. However,

these state laws only apply if your plan provides benefits through an insurance company or HMO (an

insured plan). To determine if your plan offers insured coverage, consult your summary plan

description (SPD) or contact your plan administrator. 

The list below summarizes those areas where state laws can complement HIPAA’s

preexisting condition and special enrollment provisions:

—States may reduce the number of months a plan can look back to determine a preexisting

condition. For instance, a state's law may have a look-back period of 3 months instead of the 6 in

the Federal law. The look-back period begins on the day you enroll in a plan.

—States may decrease the number of months a new employee or dependent may be subject to

preexisting condition exclusion period. For example, state laws may limit the exclusion period to

6 months rather than 12. They may also reduce the maximum 18-month exclusion period for late

enrollees.

—States may increase the number of days that constitute a significant break in coverage. For

instance, instead of 63 days, a state may allow someone to have a break of 120 days between

periods of health coverage.
U.S. Department of Labor Employee Benefits Security Administration 21

—States may increase the number of days (30 under

Federal law) parents have to enroll newborns,

adopted children, and children placed for adoption

without a preexisting condition being excluded. 

—Under Federal law, certain preexisting conditions

cannot be excluded from coverage (pregnancy;

newborns, adopted children, and children placed for

adoption within 30 days; and genetic information in

the absence of a diagnosis). States may add to this

list. For example, a state may add cancer, so that

plans cannot exclude it from coverage, even if you

received treatment during the 6 months before

enrolling in a new plan. 

—States may require additional circumstances that

entitle you to special enrollment periods beyond

those in the Federal law. 

—States may reduce an HMO's affiliation period

prior to enrollment (similar to a group health plan’s

waiting period) to fewer than 2 months (3 months for

late enrollees). 

In other areas of HIPAA, such as protections

from discrimination, state laws may also supplement

HIPAA’s protections if the coverage is through an

insured plan. Check your SPD to see if your plan is

insured and visit your state insurance commissioner's

office or the National Association of Insurance

Commissioners’ Web site at www.naic.org (click on

your state) for more information. 

Using COBRA to Extend Your

Health Coverage

COBRAis a law that can help if you lose your job or if

your hours are reduced to the point where the

employer no longer provides you with health

coverage. COBRA can provide a temporary

extension of your health coverage – as

long as you and your family members,

if eligible, belonged to the previous

employer's health plan and

generally the employer had 20

or more employees. Usually,

you pay the entire cost of

coverage (both your share

State laws may allow more

protections than the

Federal law under HIPAA. 
22

TIPS

—Your COBRA plan and other available health

coverage may be different in terms of their cost,

scope of benefits, or level of coverage.

—COBRA can be used instead of, or in addition to,

your new health coverage, if you are subject to a

preexisting condition exclusion period. When

deciding whether to choose COBRA, consider the

length of your preexisting condition exclusion

period, whether you are likely to need treatment for

your preexisting condition during this time, and the

costs and benefits of COBRA coverage.

—Whether you elect COBRA coverage is an

individual decision. Taking into account this

information, you can make a decision that is best

for the health of you and your family.

Changing from Group

Health Coverage to an Individual

Insurance Policy

HIPAA also protects those who are otherwise unable to

get group health insurance. 

The law guarantees access to individual

insurance policies and state high-risk pools for eligible

individuals. They must meet all of the following criteria:

—Had coverage for at least 18 months, most recently

in a group health plan, without a significant break; 

—Lost group coverage but not because of fraud or

nonpayment of premiums;

—Are not eligible for COBRA coverage; or if COBRA

coverage was offered under Federal or state law,

elected and exhausted it; and

—Are not eligible for coverage under another group

health plan, Medicare, or Medicaid; or have any other

health insurance coverage.

The opportunity to buy an individual policy is

the same whether a person quits a job, was fired, or was

laid off. 

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

and the employer's, plus a 2 percent administrative

fee). As long as the prior plan exists, COBRA coverage

lasts up to 18 months for most people, although it can

continue as long as 36 months in some cases. 

There are several ways to use COBRA in

conjunction with HIPAA:

—COBRA coverage can help you avoid a significant

break between periods of health plan coverage. For

example, if you expect to have a 6-month interruption

between jobs and health plans, you can purchase

COBRA coverage during that time. 

—COBRA coverage can be counted as creditable

coverage – as long as there is no significant break

after your COBRA coverage ends. Creditable

coverage can be used to offset any preexisting

condition exclusion period you or a family member

might have.

—COBRA continuation coverage can be used as a

bridge to ensure that you remain covered during a

waiting period or a preexisting condition exclusion

period.

—If you have COBRA and become covered under

other group health plan coverage that is not subject to

a preexisting condition exclusion period, your COBRA

coverage can be cut off.

—Once you are no longer eligible for COBRA

coverage, you will get a special enrollment

opportunity for any other coverage for which you are

eligible. However, if you voluntarily stop COBRA

coverage or stop paying your COBRA premiums, that

will not trigger a special enrollment right based on

loss of eligibility for coverage.
23

TIP

—Ask your state insurance commissioner's office

about high-risk pools and individual insurance

policies. Look up the office at the NAIC Web site

(www.naic.org) or in your phone directory. 

U.S. Department of Labor Employee Benefits Security Administration

COBRA coverage can help

you avoid a significant

break between periods of

health plan coverage.
Find out more about HIPAA, COBRA, and other laws that pertain to health care. The publications

and Web sites below will help.

The following publications are available from the Employee Benefits Security

Administration's toll-free publications request line–1-866-444-EBSA (3272)–or on the Web at

www.dol.gov/ebsa (click on "Publications/Reports"): 

An Employee's Guide to Health Benefits under COBRA: The Consolidated Omnibus Budget

Reconciliation Act of 1986

Retirement and Health Care Coverage ... Questions and Answers for Dislocated Workers

Your Rights after a Mastectomy ... Women's Health and Cancer Rights Act of 1998

Protections for Newborns, Adopted Children, and New Parents: The Newborns' and Mothers' Health

Protection Act of 1996

Top Ten Ways to Make Your Health Benefits Work for You

Life Changes Require Health Choices: Know Your Benefit Options

Work Changes Require Health Choices: Protect Your Rights

Other Web Sites and Publications on HIPAA

Protecting Your Health Insurance Coverage – View this publication, from the Centers for Medicare

and Medicaid Services, at www.medicare.gov (enter the name of the publication in the blank space

provided for searches). 

Your Health Information Privacy Rights – View this fact sheet at the Department of Health and

Human Services’ HIPAA Web site (www.hhs.gov/ocr/hipaa), or receive a copy by calling toll free

1-866-627-7748.

National Association of Insurance Commissioners – Visit the Web site at www.naic.gov and then

click on "NAIC States and Jurisdictions" to find your state insurance commissioner's office. 

HIPAA: Protecting Your Right to Health Insurance – You can view this AARP-sponsored publication

at www.aarp.org/health/insurance. 

A Consumer's Guide for Getting and Keeping Health Insurance – Visit the Georgetown University

Health Policy Institute’s Web site at www.healthinsuranceinfo.net , then select your state for

information on its HIPAA law.

24

RESOURCES

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU
25

Healthfinder (Office of Disease Prevention and Health

Promotion)

www.healthfinder.gov

The National Women’s Health Information Center

www.4women.gov

The Leapfrog Group

www.leapfroggroup.org

Other Consumer Health Web Sites:

The following Web sites offer information on healthrelated topics, quality assurance in health care, and

women's health. Click on each site, then choose a

topic of interest to you. 

U.S. Department of Health and Human Services

www.hhs.gov

Agency for Healthcare Research and Quality

www.ahrq.gov/consumer

U.S. Department of Labor Employee Benefits Security Administration

From these publications and

Web sites, you will learn

more about HIPAA, COBRA,

quality assurance in health

care and women’s health. 

From these publications and

Web sites, you will learn

more about HIPAA, COBRA,

quality assurance in health

care and women’s health. 
26

GLOSSARY

YOUR HEALTH PLAN AND HIPAA...MAKING THE LAW WORK FOR YOU

Certificate of creditable coverage:

A document prepared by a group health plan, HMO, or insurance company that shows prior

periods of creditable coverage, used to reduce or eliminate the length of a preexisting condition

exclusion period.

COBRA:

An abbreviation for the Consolidated Omnibus Budget Reconciliation Act of 1986, a law that provides

for a temporary extension of health plan coverage from a prior group health plan.

Creditable coverage:

A period of prior health coverage, which may be used to offset the length of a preexisting condition

exclusion period. This includes coverage under a group health plan, COBRA, Medicare and

Medicaid, or an HMO or individual health insurance policy.

Enrollment date:

The first day of coverage or the first day of the waiting period (if applicable).

Insured plan:

A plan which provides benefits through an insurance company or HMO. Check your summary plan

description (SPD) to see if your plan is insured.

Late enrollee:

An individual who enrolls in the plan at some time other than when first eligible or a special

enrollment opportunity.

Preexisting condition exclusion:

A limitation or exclusion of benefits relating to a condition because that condition was present before

the effective date of your health coverage.

Preexisting condition exclusion period:

The amount of time that you are excluded from coverage of benefits for a preexisting condition (the

maximum is 12 months, or 18 months for late enrollees).

Self-insured plan:

A group health plan where the employer assumes the risk of paying the benefits itself. An insurance

company may provide administration services to a self-insured plan, such as claims administration,

but does not assume any risk to pay claims for benefits.
27

between employees and their dependents. Plans can

also make distinctions between dependents themselves

if the distinction is not based on a health factor. For

example, a plan can distinguish between spouses and

dependent children, or between dependent children

based on their age or student status. 

Special enrollment:

An opportunity for certain individuals to enroll in a

group health plan, regardless of the plan’s regular

enrollment dates. These opportunities occur when you

lose eligibility for other coverage or experience certain

life events (marriage, birth, adoption, or placement for

adoption).

Summary plan description (SPD):

A document outlining your plan, usually

provided when you enroll in the plan.

Waiting period:

The time that must pass before

coverage can become

effective under the terms of

a group health plan.

Significant break:

A break in health coverage for 63 days or more.

Similarly situated individuals:

Permitted distinctions plans may make among

individuals, such as groups of employees, if based on

"bona fide employment-based classifications”

consistent with the employer’s usual business practice. 

For example, part-time and full-time employees can be

treated as different groups of similarly situated

individuals. In addition, a plan may draw a distinction

U.S. Department of Labor Employee Benefits Security Administration

HIPAA’s protections make

it easier to change employers

without losing coverage

for your medical conditions.
U.S. Department of Labor

Employee Benefits Security Administration