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 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.

  • Generally, 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.

However, a special rule applies to fully-insured large group plans. These types of group health plans can only look back 3 months from the time that you joined the plan to determine whether a pre-existing condition existed.

  • 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.
  • Group health plans are not prohibited from applying a universal waiting period for specific benefits. Universal waiting periods are most often used for expensive conditions like pregnancy or organ transplantation. If they are used, however, they must apply to everyone and cannot be related to pre-existing conditions. Check with your employer to see if your group health plan has this type of universal waiting period.
  • Group health plans can exclude coverage for pre-existing conditions only for a limited time. The maximum period varies for different kinds of group health plans (see chart below). Also, if you enroll late in a self-insured group health plan (after you were hired and not during a regular or special enrollment period), you may have a longer pre-existing condition exclusion period. Ask your prospective employer if you are not sure what limits apply to you.

The maximum pre-existing condition exclusion period varies

Type of Group                                          Maximum 
 Health Plan                                              Exclusion Period                                           

Fully insured small group plan                  9 months (all enrollees)
Fully insured large group plan                 3 months (all enrollees)
Self-insured group plan                        12 months (regular and special enrollees)
                                                       18 months (late enrollees)

  • Group health plans that impose pre-existing condition exclusions periods must give you credit for any previous continuous creditable coverage that you have had. Most types insurance considered creditable coverage.

What is creditable coverage?
Most health insurance counts as creditable coverage, including:

Children’s Health Insurance Program
Federal Employees Health Benefits (FEHBP)                
Foreign National Coverage
Group health insurance (including COBRA)
Indian Health Service       
Indvidual 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, such as old health plan ID cards or statements from your doctor showing bills paid by your health insurance plan.

  • For self-insured plans, coverage counts as continuous if it is not interrupted by a break of 63 days or more in a row. However, for fully-insured group health plans, the break in coverage can be no longer than 90 days in a row.

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 towards it.  If your employer requires a waiting period, the pre-existing condition exclusion period begins on the first day of the waiting period. HMOs that require an affiliation period cannot exclude coverage for pre-existing conditions.  

What is continuous coverage?

The rules defining continuous coverage depend on the type of employer-sponsored group health plan you are joining.

Art, who has diabetes, worked for Ajax Company and was covered under its group health plan for 18 months.  He lost his job and was without coverage for 75 days.  Fortunately, on the 76th day after leaving Ajax, Art found a new job at Beta Corporation.  He enrolled immediately in Beta’s fully insured group health plan, which covers diabetes but imposes pre-existing condition exclusion periods.  In Washington, fully insured group health plans count as continuous all creditable coverage that is not interrupted by a lapse of more than 90 consecutive days. Therefore, because Art’s lapse in coverage was less than 90 consecutive days, Beta’s fully insured plan will credit his coverage at Ajax against any exclusion period.  Beta’s plan will begin paying for Art’s diabetes care immediately.

Now consider a slightly different situation.  Assume Beta Corporation’s group health plan is self-insured.  Self-insured plans must count as continuous all creditable coverage that is not interrupted by a break of 63 or more consecutive days.  Therefore, in this case, Art’s prior coverage at Ajax will not be credited toward any exclusion period because it was followed by a break greater than 63 days.  Beta’s plan will begin paying for Art’s diabetes care at the end of his pre-existing condition exclusion period.

  • Your protections may differ if you move to a group health plan that offers more benefits than your old one did. Under federal law, group 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 self-insured group health plan may impose a pre-existing condition exclusion period for that category. Self-insured plans that use this method of crediting prior coverage must use it for everyone and must disclose this to you when you enroll. In Washington, fully-insured group health plans do not do this.

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 health plan does cover prescription drugs.  However, because her prior policy did not, the new plan refuses to cover her blood pressure medicine for a year.

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 required 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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