Can a Group Health Plan Limit My Coverage for Pre-existing Health Conditions?

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 When you first enroll in a group health plan, the employer or insurance company may ask if you have any pre-existing conditions.  Or, if you make a claim during the first year of coverage, the plan may look back to see whether it was for such a condition.  If so, it may try to exclude coverage for services related to that condition for a certain length of time.  However, federal and state laws protect you by placing limits on these pre-existing condition exclusion periods under group health plans.  In some cases your protections will vary, depending on the type of group health plan you belong to.

  • A group health plan can apply a pre-existing condition exclusion period only for those conditions for which you actually received (or were recommended to receive) a diagnosis, treatment or medical advice within the 6 months immediately before you joined that plan. This period is also called the look back period.
  • Group health plans cannot apply a pre-existing condition exclusion period for pregnancy, newborns or newly adopted children, children placed for adoption, or genetic information.
  • Under group health plans, coverage for pre-existing conditions can only be excluded for a limited time. The time limit varies depending on your type of group health plan. For fully insured group health plans in Massachusetts, the maximum pre-existing conditions exclusion period that can be imposed is 6 months. However, if you enroll in a self-insured group health plan, you may have a 12-month pre-existing condition exclusion period. Late enrollees in self-insured health plans can be subject to an 18-month pre-existing condition exclusion period.
  • Massachusetts law also allows your insurer to impose a waiting period instead of a pre-existing condition exclusion period. A waiting period can be imposed for up to 6 months from when your coverage begins during which time you will pay premiums but will not receive coverage for non-emergency services. Federal law does not provide for insurer-imposed waiting periods as allowed under Massachusetts law in the group market and there are elements of this law that appear to be inconsistent with federal law. If you have questions about how they apply to you contact the Massachusetts Division of Insurance or the federal Center for Medicare and Medicaid Services (1-410-786-3000).
  • Group health plans that impose pre-existing condition exclusion periods must give credit for any previous continuous creditable coverage. Most types of private and government sponsored health coverage are considered to be creditable coverage.

Coverage counts as continuous if it has not been interrupted by a break of 63 or more days in a row.

What is creditable coverage?

Most health insurance counts as creditable coverage, including:

Children’s Health Insurance Program
Federal Employees Health Benefits (FEHBP)
Foreign National CoverageGroup health plan (including COBRA)
Indian Health Service
Individual health insurance                                              
Military health coverage (CHAMPUS, TRICARE) 
State high-risk pools
Student health insurance
VA coverage                                                                     

In most cases, you should get a certificate of creditable coverage when you leave a health plan.  You also can request certificates at other times.  If you cannot get one, you can submit other proof of prior coverage, such as old health plan ID cards or statements from your doctor showing bills paid by your health insurance plan.

In determining continuous coverage, employer-imposed waiting periods do not count as a break in coverage.  If your new plan imposes a pre-existing condition exclusion period, you can credit time under your prior continuous coverage toward it. If your employer requires a waiting period, the pre-existing condition exclusion period begins on the first day of the waiting period.    

What is continuous coverage?

You can get continuous coverage under one plan or under several plans as long as you don’t have a lapse of 63 or more consecutive days.

Take Art, who has diabetes.  Ajax Company covered him under its group health plan for 9 months, but he lost his job and health coverage.  Then, 45 days later, Art found a new job at Beta Corporation and had health coverage for 9 more months.  Art changed jobs again.  His new company, Charter, has a health plan that covers care for diabetes but excludes preexisting conditions for 12 months. Charter must cover Art’s diabetes care immediately, because his 18 months of prior continuous coverage are credited against the 12-month exclusion.

Now consider a slightly different situation.  Assume Art was uninsured for 90 days between his jobs at Ajax and Beta.  In this case, Charter will credit coverage only under Beta’s plan toward the 12-month preexisting condition exclusion period. Charter’s plan will begin paying for Art’s diabetes care in 3 months (1 year minus 9 months).  Art does not get credit for his coverage at Ajax since he had a break of more than 63 consecutive days.

  • Your protections may differ if you move to a group health plan that offers more benefits than your old one did. Plans can look back to determine whether your previous health plan covered prescription drugs, mental health, substance abuse, dental care, or vision care. If you did not have continuous coverage for one or more of these categories of benefits, your new group health plan may impose a pre-existing condition exclusion period or waiting period for that category. Plans that use this method of crediting prior coverage must use it for everyone and must disclose this to you when you enroll.

Even if coverage is continuous, there may be a pre-existing condition exclusion for certain benefits

Sue needs prescription medication to control her blood pressure.  She had 2 years of continuous coverage under her employer’s group health plan, which did not cover prescription drugs.  Sue changes jobs, and her new employer’s fully insured plan does cover prescription drugs.  However, because her prior policy did not, the new plan refuses to cover her blood pressure medicine for 6 months.

Question: Is this permitted?
Answer: Yes.  However, the plan must pay for covered doctor visits, hospital care, and other services for Sue’s high blood pressure.  It also must pay for covered prescription drugs she needs for other conditions that were not pre-existing.      

  • No pre-existing condition exclusion period can be applied without appropriate notice. Your group health plan must inform you, in writing, if it intends to impose such a period. Also, if needed, it must help you get a certificate of creditable coverage from your old health plan.

What will my Group Health Insurance cover?

  • In depends on what your employer offers. Employers are free to design whatever health benefit they choose to offer their employees. However starting January 1, 2009, Massachusetts residents are required to have coverage that meets state minimum standards. As of that date, if your employer offers a health plan that doesn’t provide for this level of coverage, you must meet these requirements on your own. For example, you might buy a supplemental policy, switch to another policy offered by your employer, or purchase an individual health insurance policy.

What can I be charged for Group Health Insurance?

  • You cannot be charged more because of your health status. Health status means your medical condition or history, genetic information, or disability. This protection is called nondiscrimination. Check with the company for the most current premium rates.
  • Employers with 11 or more full-time employees are required to make “fair and reasonable” premium contributions for health insurance. If your employer fails to do so it will be required to pay “Fair Share Contribution” to the state.

      Employers are considered to have made a fair and reasonable premium contribution if at least 25% of full-time employees participate in the employer sponsored health plan or if the employer offers to contribute at least 33% of the premium cost for all full-time employees.

  • Employers with 11 or more employees are also required to provide a Section 125 Plan. This allows employees to pay for health insurance coverage on a pre-tax basis (both state and federal). Your employer may be exempt from this requirement if it pays the full cost of medical coverage for all employees. Most full-time employees are eligible to participate in an employer’s 125 Plan. If your employer fails to do so, it may be subject to the “Free Rider Surcharge” (a fine that is used to help fund state-funded health care).

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