Pre-Existing Conditions
For plan years beginning on or after September 23, 2010, plans may not impose any pre-existing condition exclusions for enrollees under age 19. For plan years beginning on or after January 1, 2014, plans may not impose any pre-existing condition exclusions for any enrollees.
Note: The limit on pre-existing conditions only applies to certain types of health plans, such as major medical insurance. It does not apply to HIPAA excepted benefits, such as disability, cancer, hospital indemnity, or accident insurance. Click here for more information about the types of benefits that are exempt from the Health Care Reform plan design mandates.
Pre-Existing Condition Limit Hot Topics & FAQs
- What is a pre-existing condition?
Answer: A pre-existing condition is a health condition, disease, illness, or injury for which medical advice, diagnosis, care, or treatment was received or recommended within a specified time period prior to enrolling in a health plan.
- What’s a pre-existing condition limit?
Answer: A pre-existing condition limit is when a plan will not provide coverage to treat a pre-existing condition until the end of the specified period, not longer than 12 months. HIPAA requires the plan to offset the period with “creditable coverage” (i.e., prior health plan coverage) that the individual had prior to joining the plan (after not more than a 63-day break in coverage).
Example: A plan imposes a 12 month pre-existing condition period. A newly-hired employee who enrolls in the plan has a pre-existing condition but also had creditable health plan coverage for the 7 months immediately prior to enrollment. That 7-month period of creditable coverage would reduce the 12-month limitation period to 5 months. The plan could deny coverage to treat the pre-existing condition for the first 5 months, but after that would have to provide coverage for the pre-existing condition.
- Are plans still required to provide HIPAA certificates of creditable coverage?
Answer: Yes, the requirement to provide HIPAA certificates of creditable coverage has not been amended. If an individual enrolls in a health plan that imposes a pre-existing condition limit, the individual may provide a HIPAA certificate of creditable coverage to reduce the length of time the coverage exclusion may be imposed for the pre-existing condition.
Group health plans are required to provide such certificates when an individual drops coverage under the plan. Many plan sponsors have voluntarily eliminated all pre-existing condition exclusions from their plans (even though the requirement only currently extends to children). However, the rule requiring plans to provide HIPAA certificates has not been revised and some individuals may still need the benefit of the certificate to help reduce the limitation period for a pre-existing condition exclusion prior to 2014, at which time plans are no longer allowed to impose pre-existing condition limits.
American Fidelity Assurance Company does not provide tax or legal advice.
