Help me better understand COBRA and HIPAA

October 27, 2005 11:43 PM

COBRA/HIPAA: Help me understand how these health insurance laws might apply in several employer-leaving or life-changing events.

(1) Someone I know was recently fired due to mental health issues. They did affect job performance, and weirded some coworkers out, and also led to some behavior that could be considered mild sexual harrasment. As far as I know, the weirding people out and somewhat inadequate performance were the only official reasons given for firing. Is he eligible for COBRA?

(2) Someone else I know is considering leaving their employer. My understanding is that if they leave voluntarily, they're eligible for COBRA if they apply within 30 days. Are there any pitfalls here, other than bearing the full cost of the group premium? And, in order to help control premium costs, does COBRA coverage allow for adjusting deductibles and limits?

(3) Another person has private insurance, has been diagnosed with cancer, and wants to move back with family in another state -- where their current insurer does not provide. Obviously the cancer makes her largely uninsurable. Does HIPAA do anything to help?

posted by weston to health & fitness (7 comments total)

HIPAA, to the best of my understanding, is entirely concerned with the privacy of your personal health information. It sets rules and guidelines about how it should be handled, stored, and how it can be transferred between medical staff.

In short, it has almost nothing to do with insurance coverage. COBRA is what you're going to want to focus on.
posted by Remy at 5:27 AM on October 28, 2005

1. Yes, the person would be eligible for COBRA if they worked at an employer that was COBRA-eligible (that is, an employer that had more than 20 employees for most of the previous calendar year). Even if it's a smaller employer, most states have COBRA-like extension laws to plug that gap. The only time a COBRA eligible employer can deny COBRA continuation is if the employee is fired for gross misconduct.

2. They would have 60 days after leaving (or after receiving the COBRA election notice, whichever occurs later) to elect COBRA coverage. My understanding is that they would only be allowed to continue the plan that they're on currently. However, at open enrollment, the former employee on COBRA needs to be treated exactly like an active employee. So, at that point, they could change their election -- for example, move from an expensive PPO to a cheap HMO.

3. HIPAA does help in this situation, sort of. HIPAA's main purpose is to povide protection against pre-existing condition exclusions. If the person avoids a more than 63 day gap in coverage, then the new plan will have to credit previous coverage under the old insurer against any pre-existing condition exclusion in the new plan.

So, if the person can find new coverage in that state, HIPAA would help. HIPAA, however, does not make a new insurer have to offer insurance to that person. I would be very, very careful in the situation you're describing. Make sure new insurance is lined up before moving.
posted by MarkAnd at 6:14 AM on October 28, 2005

However, at open enrollment, the former employee on COBRA needs to be treated exactly like an active employee.

Not questioning at all, just wondering if you could point to the law regarding this particular bit? I take cobra, and wasn't given any opportunity to change my elections this year during my ex-company's open enrollment.

For #3, If the person avoids a more than 63 day gap in coverage, then the new plan will have to credit previous coverage under the old insurer against any pre-existing condition exclusion in the new plan.
This only applies if the person had group coverage, and is somehow going to get group coverage. If the person had single coverage or is moving to single coverage, the protection for pre-existing conditions is out the window.

HIPAA doesn't provide much for people with single coverage. So, whenver you can, try to make sure you're part of some group coverage or other at all times.
posted by FortyT-wo at 6:38 AM on October 28, 2005

1. I would add that your friend should make sure that the 'weirding people out' isn't considered gross misconduct. He needs to keep on his former employer to get the COBRA packet; if he calls his customer service people, they'll just refer him back to his HR department. This is the place where a lot of people experience the most trouble getting set up with COBRA: delays caused by the lack of communication between an employer and an insurer about COBRA-eligibles.

3. The old health plan will issue a certificate of creditable coverage to your friend (maximum listed would be eighteen months.) If she provides that to the new insurer, it will stand against the waiting period for pre-existing conditions. Since under HIPAA a pre-existing condition is defined as one for which advice, diagnosis, care or treatment was received within six months before the enrollment date, there's not much way around that. And if your friend doesn't enroll late, the maximum waiting period is 12 months.
posted by rebirtha at 6:48 AM on October 28, 2005

Not questioning at all, just wondering if you could point to the law regarding this particular bit? I take cobra, and wasn't given any opportunity to change my elections this year during my ex-company's open enrollment.

Under COBRA, what benefits must be covered?

Qualified beneficiaries must be offered coverage identical to that available to similarly situated beneficiaries who are not receiving COBRA coverage under the plan (generally, the same coverage that the qualified beneficiary had immediately before qualifying for continuation coverage). A change in the benefits under the plan for the active employees will also apply to qualified beneficiaries. Qualified beneficiaries must be allowed to make the same choices given to non-COBRA beneficiaries under the plan, such as during periods of open enrollment by the plan.

This is very often administered incorrectly, but at open enrollment, you're supposed to receive the same options available to an active employee.

This only applies if the person had group coverage, and is somehow going to get group coverage. If the person had single coverage or is moving to single coverage, the protection for pre-existing conditions is out the window.

Oy, you're totally right. I had a brain freeze. Sorry about that.
posted by MarkAnd at 6:51 AM on October 28, 2005

Forty T-wo, you could look here : 'Under COBRA, what benefits must be covered?' It talks about COBRA beneficiaries and periods of open enrollment during which they're allowed to make choices.
posted by rebirtha at 6:52 AM on October 28, 2005

For HIPAA questions (Portability), here is the Department of Labor's webpage on HIPAA Portability.

This will give you the Official Word from the gov't.
posted by nancoix at 1:47 PM on October 28, 2005