A preexisting condition is a condition that exists before the employee is covered by the health insurance. For example, suppose you were diagnosed with a disease in May. You get hired for a new job and go on the company's health plan in July. The disease is a preexisting condition because it was diagnosed before you got health coverage.
Many insurers refuse to pay for preexisting conditions.
The Health Insurance Portability Act, which became law in 1997, limits employers' ability to refuse coverage to preexisting conditions. Insurers can refuse to cover you on the basis of a preexisting condition for up to 12 months after you enroll in the plan. If you had coverage through another insurance program, the exclusion period is reduced by the amount of time you were covered. When he changed jobs, his health insurance coverage began two months after he started. When his coverage started, Steve's new employer must use his three months of coverage from his old company and the two months he has already been subjected to the preexisting condition exclusion to reduce his remaining preexisting condition exclusion period.