Health Insurance 4

I haven't had any health problems so I don't think any insurance company would turn me down. Why do I need to be concerned with the eligibility requirements in a policy?

Eligibility requirements govern more than just your initial eligibility to get the insurance. They also govern whether you can keep the insurance. For instance, if your policy pegs eligibility to employment or self-employment and you become disabled and unable to work, you would become ineligible for the insurance and could lose it at the very time you need it most. Finding new insurance at a reasonable price would be impossible because of your disability.

What is the Health Insurance Portability and Accountability Act and who does it help?

The Health Insurance Portability and Accountability Act (HIPAA), which went into effect in 1997, was put in place to improve the "portability" of health insurance when workers change jobs or convert from a group plan to an individual policy. Before the law was enacted, a change of jobs or a shift from COBRA coverage to an individual policy could result in being denied coverage, asked to pay a higher premium, or accept a policy that excluded coverage for a preexisting condition as defined by the policy.

HIPAA provides guaranteed continuity of coverage for those who are eligible. A terminated employee must first exhaust all of his/her group continuation coverage (COBRA, etc.) before HIPAA eligible coverage is available, and there can be no more than a 63-day gap between coverages.

What that all means to you if you're leaving an employer to start a business is that if you were covered under an employer-sponsored plan, you cannot be turned down for individual coverage once you have exhausted your group "continuation" options (that is, COBRA, etc.) if your new coverage takes effect within 63 days. You may be asked to pay a higher premium, however, due to a health condition.

HIPAA also mandates that small group plans (2 to 50 employees) be required to issue coverage without regard to the health status of the employees; however, rates may be higher than standard. Zoller advises that "renewal" is a legal term found in the policy that describes the conditions under which the insurer may cancel, or non-renew coverage. All policies are guaranteed renewable under HIPAA. But that doesn't mean you are protected from losing your coverage. Your present plan may not continue if you lose eligibility due to a change in your circumstances such as unemployment or disability. (If you lose your job, you are no longer part of the group, and therefore no longer eligible for the group plan, even though it would have been renewed if you hadn't left the company.)

You can find some additional information about HIPAA on the web at http://www.cms.hhs.gov/hipaa/. The rules are complicated so if you or a spouse has a medical condition that might be considered uninsurable, be sure to seek advice from an insurance broker who is familiar with the HIPAA rules for your state.

I let my insurance coverage lapse and now an insurance agent tells me I might be uninsurable due to a medical condition I have. What can I do?

First, find out if the agent you are using deals only with one or two companies. If so, find an insurance broker who is experienced in handling health insurance and who is familiar with insurance offered by many companies. Since each company has its own underwriting requirements it is possible that what makes you uninsurable to one company might not make you uninsurable to another. If you do have a condition that would make you uninsurable to all companies, ask about health insurance risk pools and open enrollment options in your state. Risk pools, which accept people who have been rejected by other insurance companies, are available in many states. Open enrollment periods are another option for insurance offered in many states by Blue Cross/Blue Shield. During open enrollment, everyone who applies for insurance and can pay the premium is accepted. Policies obtained through one of these options are likely to be expensive but at least should provide some coverage. Be sure to read the policies carefully to see what they say about coverage for preexisting conditions.

1 | 2 | 3 | 4 | 5 | 6 | 7 |