Epilepsy & COBRA / HIPPA



The following article first appeared on the Epilepsy Foundation website, and is reprinted here with permission from the Epilepsy Foundation.

Two major federal laws can help people keep their health insurance coverage when leaving their jobs. The Comprehensive Omnibus Benefits Reform Act of 1986 (COBRA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) have made great strides in bridging gaps of insurance coverage for people who had/have group health plan coverage. Unfortunately, these Acts do little to help people who need individual insurance.

COBRA

If someone has group health insurance through his or her employer, that person and his/her dependents can continue that coverage for eighteen months if a "qualifying event" takes place. The most common qualifying events are when the employee is terminated (including if the employee quits), or when the employee's hours are cut to a level that makes him no longer eligible for the group insurance of the employer. However, COBRA coverage is not an option if the employee is fired for "gross misconduct."

Following Termination

The employer must notify the health plan of an employee's termination. Within two weeks, the health plan must notify the employee of his or her right to continue coverage. The employee or beneficiary must respond within sixty days if they wish to continue on the group health insurance plan.

The individual who chooses continued coverage will have to pay both the employee and employer portions of the premium, plus a 2% service charge. The individual's continuing premium cost may not exceed 102% of the premium cost for the full employee rate.

Standard COBRA Coverage

This coverage may continue for eighteen months, as long as the premiums are paid. If the individual should join a new employer's group health plan, the COBRA coverage is not automatically terminated. The individual has the option of either continuing the COBRA coverage for the full eighteen months or terminating it. Continuing COBRA coverage when joining a new plan may be helpful if plan participants are subject to exclusions or waiting period requirements under the policy. However, the individual may need to carry the premiums of both policies during this time.

Disability Extensions

If an individual was determined to be disabled under the Social Security Act within the first sixty days of COBRA coverage, the individual may choose to buy an additional eleven months of COBRA coverage extending the COBRA coverage to twenty-nine months. If the individual chooses this option, any beneficiaries also receiving the COBRA coverage will be eligible for this extended period.

Option to Convert

When the COBRA coverage ends, an offer will be made for an option to convert to an individual health plan if this option is generally available to active employees under the plan. Assuming the employee wishes to convert, he or she will want to determine if the conversion plan is affordable (it is likely to be more expensive than group coverage) and extensive enough, or if it would be better to seek coverage elsewhere.

COBRA coverage may also be terminated early if after electing COBRA, the individual joins another health plan, or Medicare, that covers all existing conditions. If the new plan does not cover a certain condition that COBRA is currently covering, or if you are still subject to a twelve-month pre-existing condition clause, you can maintain the double coverage.

HIPAA

People with long term health conditions are often reluctant to leave jobs because they are afraid pre-existing condition clauses will limit coverage of any such conditions under a new insurance plan. This is of particular concern to people with epilepsy who can not physically or financially afford any lapse in health insurance coverage. HIPAA limits the amount of time an insurer can refuse to cover pre-existing conditions to twelve months. HIPAA also ensures that in some cases there is no waiting period for new coverage. However, an insurer is still not required to cover every condition and disability. In some cases, they can still deny coverage altogether for certain conditions as long as the discrimination is based on sound actuarial data. But so long as epilepsy, or any other condition, is covered under a new plan, the pre-existing condition waiting period can be no longer than twelve months.

Impact of a "Pre-Existing" Condition

A "pre-existing condition" is considered to be any condition for which medical advice, diagnosis, care or treatment was recommended or received within the previous six–month period. The maximum amount of time a plan can refuse coverage for any such condition is twelve months. If an employee starts a new job and is subject to a waiting period before being eligible to join the health plan, the waiting period and twelve-month period for the pre-existing conditions must coincide.

Certificate of Coverage

The twelve-month period for pre-existing conditions may also be reduced if the individual provides the new insurance plan with proof of prior health coverage. When you leave a health plan, the plan must provide you with a Certificate of Coverage which details the dates you were covered under the plan. This continuous coverage can be credited toward the pre-existing condition period. Therefore, if you had at least twelve months of "credible coverage" (which can be from a group health plan, HMO, individual health insurance policy, Medicare, or Medicaid) and then left your job and you started a new job within sixty-three days thereafter, the pre-existing condition period would not apply. Your condition would be covered immediately (provided that the plan regularly covers that condition). COBRA coverage can also be credited towards continuous coverage.

Finding Individual Insurance

HIPPA can also help access to individual insurance when group coverage is not an option. HIPAA guarantees access to an individual plan if: the person had group coverage for at least eighteen months; did not have his or her group coverage terminated because of fraud or nonpayment of premiums; is ineligible for COBRA or has exhausted COBRA benefits; and is not eligible for coverage under another group health plan.

For more information regarding HIPAA and COBRA and other health programs, visit the Department of Labor.
 
IMPORTANT SAFETY INFORMATION

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