Can a Group Health Plan Limit My Coverage for Pre-Existing 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.

· HMOs may not exclude coverage for pre-existing conditions. Instead, HMOs may impose an affiliation period before the health coverage begins.

· Other group health plans can count as pre-existing conditions only those 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, children placed for adoption, or genetic information.

· Group health plans can only exclude coverage for pre-existing conditions for a limited time. The maximum period allowed for exclusion is 12 months. However, if you enroll late in a group health plan (after you were hired and not during a regular or special enrollment period), the rules are different depending on the type of plan you join.

If you seek to enroll late in a self-insured group health plan, your pre-existing condition exclusion cannot exceed 18 months.

If you seek to enroll late in a fully insured group health plan in Texas, the plan must either admit you immediately or admit you at the next open enrollment period. Fully insured group health plans must have at least one 31-day open enrollment period each year. If the plan admits you immediately, you may have a pre-existing condition exclusion period for up to 18 months. If the plan requires you to wait until the next open enrollment period, you may have a pre-existing condition exclusion period of up to 12 months.

· Group plans that impose pre-existing condition exclusion periods must give you credit for any previous continuous creditable coverage that you’ve had. Most types of private and government-sponsored health insurance are considered creditable coverage.

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

In addition, in Texas, if you had a break in health coverage of more than 63 days in a row, and then enroll in a fully insured group health plan, that plan must give you credit for previous creditable coverage you had in effect at any time during the 12-month period preceding enrollment.

What is creditable coverage?

Most health insurance counts as creditable coverage, including:

Children’s Health Insurance Program               Medicare

Federal Employees Health Benefits(FEHBP)       Military health coverage
Foreign National Coverage                                  (CHAMPUS, TRICARE)

Group health plan (including COBRA)               State high-risk pools

Indian Health Service                                   Student health insurance
Individual health insurance                            VA coverage
Medicaid

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 and HMO affiliation 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?

Self-insured and fully insured group health plans credit continuous coverage differently

Take Art, who has diabetes. He had had health insurance every day of his life, since birth, until recently, when he was laid off for 3 months. Fortunately, Art then found a new job with health coverage at Ajax Company. Ajax has a self-insured group health plan that covers diabetes but excludes pre-existing conditions for 12 months. Because Art had a lapse in health coverage longer than 63 days in a row, Ajax’s plan is not required to give him credit for his prior health coverage. Ajax’s group health plan will pay for Art’s diabetes care in 12 months.

Now consider a slightly different situation. Assume Ajax has a fully insured group health plan. In Texas, even if you have a break in health coverage longer than 63 days, fully insured group health plans must give you credit for any creditable coverage you had in force during the 12-month period preceding enrollment. Therefore, Ajax will give Art credit for 9 months of prior creditable coverage (12 months minus the 3-month lapse in health coverage). Art’s pre-existing condition exclusion period will only be 3 months, at the end of which Ajax will begin paying for Art’s diabetes care.

· Your protections may differ if you move to a self-insured group health plan that offers more benefits than your old one did. Self-insured group health plans can look back to determine whether your previous 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 self-insured group health plan may impose a pre-existing condition exclusion 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. Fully insured group plans in Texas cannot use this method of crediting coverage.

Even if coverage is continuous, there may be an 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 self-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.


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