Individual Health Insurance Sold by Private Insurers

When do insurers have to sell me an individual health insurance policy?

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

Generally, in Washington, insurers that sell individual health insurance can turn you down because of you health status. In most cases, you will be required to complete the Standard Health Questionnaire (SHQ). The questionnaire is used by insurers to determine your eligibility for an individual health insurance policy.

The SHQ includes more than 200 questions about your current and recent past health conditions. Your health conditions will be assigned points depending on how costly they are. If you accumulate more than 325 points on the SHQ, insurers can turn you down for individual health insurance. If you accumulate less than 325 points, the insurer cannot turn you down and must offer you all of the individual market policies that it currently sells in the individual market.

For information about the Standard Health Questionnaire, including a copy of the questionnaire, how you are scored and how to appeal your score, visit https://www.wship.org/.

If an insurer denies you health insurance based on your health status, it must provide the denial in writing promptly and notify you about other coverage options. The insurer must give you written notice that you are eligible for health coverage provided by the Washington State Health Insurance Pool (WSHIP). (See page 25.) The insurer must also provide you with an application for WSHIP. If the insurer does not provide or postmark the notice within 15 business days, then the insurer must sell to you individual health insurance.
Some residents cannot be turned down for individual health insurance based on health status. This is called guaranteed issue. There are some situations when you do not have to take the SHQ and must be offered an individual health insurance policy on a guaranteed issue basis:
o You changed residences from one part of Washington state to another part where you current health plan is not offered.
o You used up any COBRA that was available to you.
o You former employer, who provided you with health coverage, has gone out of business while you were on COBRA
o You were covered under a group plan that is exempt from COBRA and you had at least 24 months of continuous group coverage.
o Your doctor or health care provider stopped being part of the provider network on your current individual health insurance plan. (In order for this exception to apply, your doctor must be on the new plan that you are applying for and you must have received some service from that provider during the 12 months before they left your current plan.)
o You have been disenrolled in the Washington Basic Health Plan (BHP) after being continuously covered by the program for at least 24 months.

You must submit your application for individual health insurance within 90 days of the noted qualifying events. In most cases, you can submit your application in anticipation of the event.

Overall, most HIPAA eligible individuals do not have to take the SHQ. However, if you are HIPAA eligible and your prior employer-sponsored group coverage was exempt from COBRA (e.g. your employer had less than 20 employees) and you do not have 24 months of continuous group coverage, then you must take the SHQ. If, as a result, you are not offered an individual health insurance policy, you are eligible for coverage through WSHIP.

To be HIPAA eligible, you must meet certain criteria:

No matter where you live in the U.S., if you are HIPAA eligible you are guaranteed the right to buy individual coverage of some kind with no pre-existing condition exclusion periods. In Washington, you are guaranteed the same right to purchase individual health insurance as all other individuals in Washington, although most HIPAA eligible individuals are not required to take the standardized health screening. (see above)To be HIPAA eligible, you must meet all of the following:

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 (90 days if applying for group insurance coverage) of losing your prior coverage.
Under Washington law, newborns, adopted children and children placed for adoption are automatically covered under the parent’s individual health insurance policy for the first 60 days, if the plan covers dependents. The insurer may require that the parent enroll the dependent within 60 days in order to continue coverage beyond the 60 days. Children added to their parent’s policy within this time frame cannot be required to complete the SHQ.
Under Washington law, your disabled child can remain covered under your individual health insurance policy after he or she reaches the age at which dependent coverage usually terminates. To qualify, your adult son or daughter must be incapable of self-support because of developmental disability or physical handicap and must be chiefly dependent on the policyholder for support and maintenance. Proof of incapacity must be furnished within 31 days of reaching the time limit and may be required periodically thereafter
Even if you qualify to buy an individual health insurance policy, the insurer can refuse to enroll you due to limits on the insurer’s capacity to serve existing enrollees. The Commissioner of Insurance must determine that the insurer’s clinical, financial, or administrative capacity will be impaired. Contact the Washington State Office of the Insurance Commissioner for more information at (800) 562-6900.

What will my individual health insurance policy cover?

It depends on what you buy. Washington does not require health insurers in the individual market to sell standardized policies. However, insurers in the individual market must categorize the policies they offer as either comprehensive or catastrophic. All comprehensive individual health insurance policies must cover, at a minimum, the same benefits that are required by plans offered through Washington Basic Health. (see Chapter 5) Even with these requirements, insurers can cap coverage for benefits under comprehensive policies. For example, some insurers offer individual policies with a cap of $2,000 on covered pharmaceutical benefits per year.

Insurers can also sell catastrophic policies in the individual market. Typically, these policies have limited benefits and extremely high cost sharing. In addition, unlike comprehensive individual policies, catastrophic policies are not required to include coverage for any specific benefits.

Washington requires all individual policies, whether comprehensive or catastrophic, to cover certain mandated benefits, for example, diabetes treatment and mammograms. Overall, when buying individual health insurance, you will have to read and compare all your options carefully.

For more information about which benefits must be covered in your individual health insurance policy, check with the Washington State Office of the Insurance Commissioner at (800) 562-6900

What about coverage for my pre-existing condition?

Individual health insurers cannot impose elimination riders. These are amendments to an insurance policy that permanently exclude coverage for a health condition, body part, or body system.

However, individual health insurers can impose a pre-existing condition exclusion period. Pre-existing condition exclusion periods cannot exceed 9 months.

The definition of pre-existing condition is different under individual health insurance than under group health plan. Individual health insurers count as pre-existing any condition for which you received - or, in your insurer’s judgment, for which you should have sought - medical care, treatment, diagnosis or advice in the 6-month period prior to enrollment. This is called the prudent person rule. In individual policies pregnancy can count as a pre-existing condition, but not genetic information.

If you make a claim during the first year 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 at the time the policy became effective. If the insurer determines that the condition is a pre-existing condition, it can refuse to pay for expenses for that condition.
In some circumstances, you will get credit for prior continuous coverage against the imposition of a pre-existing condition exclusion period. You will get credit only if your prior coverage was under a comprehensive individual health insurance policy or a group plan, You will not be given credit for prior coverage if your prior plan was a catastrophic plan. Generally, to receive credit, your coverage must be continuous with no more than a 63-day lapse between your old coverage and your new policy. However, if you are buying a new individual health insurance policy because you are moving out of your prior plan’s service area or you are following your medical provider to a new plan, then you cannot have a break longer than 90 days.
Individual policies cannot impose a pre-existing condition exclusion if you are HIPAA eligible.

What can I be charged for an Individual Health Insurance policy?

In Washington, premiums for an individual health insurance policy cannot vary due to your health status. Premiums will vary, though, depending on your age, family size, where you live and the type of plan you seek. This is called adjusted community rating. Check directly with individual health insurer to get the most current premium rates and to see if they offer wellness activity discounts or tenure discounts.
When you renew your individual coverage, your premiums can increase as you age.

Can my individual health insurance policy be canceled?

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 guaranteed renewable. They will only cover you for a limited time, such as six months. If you want to renew coverage under a temporary policy after it expires, you will have to reapply and there is no guarantee that coverage will be re-issued at all or at the same price.

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