Effective for plan years beginning on or after Jan. 1, 2014, the Affordable Care Act (ACA) prohibits group health plans and issuers from imposing pre-existing condition exclusions (PCEs) on any enrollees. Currently, ACA prohibits PCEs for enrollees who are under 19 years of age. ACA’s restrictions on PCEs apply to both grandfathered and non-grandfathered plans.
HIPAA PCE Restrictions Apply Until 2014
Until ACA’s full prohibition on PCEs takes effect in 2014, the HIPAA rules regarding PCEs will continue to apply. HIPAA allows plans and issuers to exclude pre-existing conditions from coverage, but places significant limitations on those exclusions. For example, under HIPAA, PCEs may be imposed only for a maximum period of 12 months for regular and special enrollees and 18 months for late enrollees. HIPAA requires that the plan or issuer reduce any PCE by the amount of creditable coverage the individual had prior to his or her enrollment in the plan.
To allow an individual to establish prior creditable coverage for purposes of reducing or eliminating any PCE imposed by a group health plan, HIPAA’s rules require plans and issuers to provide Certificates of Creditable Coverage(HIPAA Certificates). Plans and issuers must provide HIPAA Certificates to individuals:
- Automatically when they lose coverage under the plan; and
- Upon request for a period of 24 months following termination of coverage.
Effect on HIPAA Certificates
ACA’s prohibition on PCEs for plan years beginning on or after Jan. 1, 2014, will make HIPAA Certificates unnecessary.
On March 21, 2013, the Departments of Health and Human Services, Labor and the Treasury issued a proposed rule under ACA. The proposed rule includes several changes to make existing HIPAA rules consistent with health care reform provisions.
Most notably, the proposed rule would eliminate the requirement to provide HIPAA certificates, effective Dec. 31, 2014. The proposed effective date recognizes that participants still may need HIPAA Certificates during 2014 to avoid PCEs under non-calendar year plans.
Although the proposed rule is not yet in final form, plans and issuers should plan on providing HIPAA Certificates during 2014.