When do individual health insurers have to sell me coverage?

In Tennessee, your ability to buy individual health coverage depends on your health status.  There are certain circumstances, however, when you must be allowed to buy an individual health insurance policy.

• In general, insurers that sell individual health insurance in Tennessee are free to turn you down because of your health status and other factors. When applying for individual coverage, you may be asked questions about health conditions you have now or had in the past. Depending on your health status, insurers might refuse to sell you coverage or offer to sell you a policy that has special limitations on what it covers.
• If you are HIPAA eligible, however, individual insurers cannot turn you down. All insurers that sell individual insurance must offer you coverage. Insurers can offer you all of their individual health plans, their two most popular individual health policies, or two policies specially designed for HIPAA eligible individuals - a “high” and a “low” option policy, whose benefits must be similar to those sold to everyone else. Companies that do not designate two policies must offer you a choice of all their individual insurance policies. Policies sold to HIPAA eligible individuals cannot impose pre-existing condition exclusion periods.

To be HIPAA eligible, you must meet certain criteria

If you are HIPAA eligible in Tennessee you are guaranteed the right to buy an individual health plan and are exempted from pre-existing condition exclusion periods.  To be HIPAA eligible, you must meet all of the following:

• You must have had 18 months of continuous creditable coverage, at least the last day of which was under a group health plan.
• You also must have used up any COBRA or state continuation coverage for which you were eligible.
• You must not be eligible for Medicare, Medicaid or a group health plan.
• You must not have health insurance. (Note, however, if you know your group coverage is about to end, you can apply for coverage for which you will be HIPAA eligible.)
• You must apply for health insurance for which you are HIPAA eligible within 63 days of losing your prior coverage.

HIPAA eligibility ends when you enroll in an individual plan, because the last day of your continuous health coverage must have been in a group plan.  You can become HIPAA eligible again by maintaining continuous coverage and rejoining a group health plan.

• Even if you are HIPAA eligible, insurance companies in Tennessee are not required to offer you family coverage when you buy individual health insurance. They must, hover, offer separate individual policies to each person in your family who is HIPAA eligible. Nonetheless, most insurance companies will voluntarily offer you family coverage if you request it.
• Under Tennessee law, newborns and newly adopted children must be covered under your individual health plan for the first 31 days, if the plan covers dependents. The insurer may require that the parent enroll the child within the 31 days in order to continue coverage beyond the 31 days.
• If you have a disabled child, that child may remain covered under your fully insured group health plan after he or she reaches the age at which dependent coverage is usually terminated. To qualify, your adult son or daughter must be incapable of self-support because of mental retardation or physical disability and must be chiefly dependent on the policy holder for support. Proof of incapacity must be furnished within 31 days of reaching the time limit and may be required periodically thereafter, but not more frequently than once every year.

What will my individual health plan cover?

• It depends on what you buy. Tennessee does not require health insurers in the individual market to sell standardized policies. Health plans can design different policies and you will have to read and compare them carefully. However, Tennessee does require all health plans to cover certain benefits - such as mammograms and prostate cancer screening. Check with the Tennessee Department of Commerce and Insurance for more information about mandated benefits.

What about coverage for my pre-existing condition?

• No pre-existing condition exclusion periods or elimination riders can be imposed on your individual health insurance policy if you are HIPAA eligible.

• For people who are not HIPAA eligible, individual health insurance policies can impose elimination riders. This is an amendment to your health insurance policy that permanently excludes coverage for a health condition or even an entire body part of system. Elimination riders can be applied even if you have prior creditable coverage.
• For people who are not HIPAA eligible, individual health insurance policies can also impose pre-existing condition exclusion periods. Pre-existing condition exclusion periods cannot exceed 2 years.

The definition of pre-existing condition is different under individual health insurance than under group health plans.  Individual health insurers can count as pre-existing any condition for which you received, or - in your insurer’s judgment, for which you should have sought - a diagnosis or medical advice or treatment prior to obtaining the individual health policy This is called the prudent person standard. There is no limit on how far back a health plan can look to see if you had any pre-existing conditions. 

• If you make a claim during the first 2 years of coverage, the insurer can look back to see if the claim is for a condition that would have been considered a pre-existing condition. If the insurer determines, using the prudent person standard, that the condition is a pre-existing condition, it can refuse to pay for expenses for that condition.
• Pregnancy can be considered a pre-existing condition by individual health insurers. However, genetic information, provided that it is not favorable and provided voluntarily by the individual, cannot be used as the basis of a pre-existing condition.
• Unlike group health plans, individual health insurers do not have to give you credit for prior coverage.

What can I be charged for individual health coverage?

• If you have an expensive health condition, your individual health insurance premiums may be very high. The law does not prohibit Tennessee health insurers from charging you more because of your health status.

• When you renew your individual health insurance policy, your premiums can also increase. Age and other factors will increase your premiums at renewal. In addition, if you have a health condition and the rates for your individual policy have increased, you may not be able to switch to a cheaper policy.

Can my individual health insurance policy be cancelled?

• Your coverage cannot be canceled because you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in the case of managed care plans, continue to live in the plan service area.
• Some insurance companies sell temporary health insurance policies. Temporary policies are not renewable. They will only cover you for a limited time, such as 6 months. If you want coverage under a temporary policy after it expires, you will have to apply for a new contract and there is no guarantee that coverage will be re-issued at all or at the same price.