Connecticut Health Insurance Laws
If you do not have access to employer-sponsored group insurance, you may want to buy an individual health insurance policy from a private health insurance company. However, in Connecticut – as in most other states – you have limited guaranteed access to individual health insurance in the private market. There also are some alternatives to individual health insurance coverage – such as COBRA coverage, conversion, and coverage through the Connecticut Health Reinsurance Association (HRA). This chapter summarizes your protections under different kinds of health plan coverage.
INDIVIDUAL HEALTH INSURANCE SOLD BY PRIVATE INSURERS
WHEN DO INDIVIDUAL HEALTH INSURERS HAVE TO SELL ME A POLICY?
In Connecticut, your ability to buy individual health insurance does not depend on your health status, though it used to. You must be allowed to buy individual health insurance policy from any insurer.
• Under the Affordable Care Act, insurers cannot turn you down or issue exclusion periods because of your health status. They cannot ask about your medical history on an application, or increase your premiums because of having health problems.
• You may be eligible to buy an individual policy through the Connecticut Health Reinsurance Association (HRA), the state’s high risk pool, if you are a resident and over the age of 19 and under the age of 65.
• In Connecticut, newborns and adopted children are automatically covered under the parents’ fully insured health policy for the first 31 days, if the policy covers dependents. The insurer may require the parent to enroll the child within the 31 days in order to continue coverage beyond the 31 days.
• If you have a disabled child, that child may remain covered under your individual health insurance policy after he or she reaches the age at which dependent coverage is usually terminated. To qualify, your son or daughter must be incapable of self-support because of mental or physical disability and must be chiefly dependent on the policy-holder for support. Proof of incapacity must be furnished within 31 days of reaching the time limit and may be required periodically thereafter.
WHAT WILL MY INDIVIDUAL HEALTH POLICY COVER?
• It depends on what you buy. Connecticut does not require individual health insurers in the individual market to sell standardized policies. Insurers can design different policies and you will have to read and compare them carefully. However, Connecticut does require all health plans to cover certain benefits — such as prostate cancer screening and diabetes testing and treatment. Check with the Connecticut Department of Insurance for more information about mandated benefits.
• The Affordable Care Act also requires certain health plans, such as those sold through Access Health CT and qualified health plans off the exchange, to feature essential health benefits (EHBs). EHBs under health reform include ten categories of covered care, such as preventive and wellness services, maternity, prescriptions, mental health, and pediatric care.
WHAT ABOUT COVERAGE FOR MY PRE-EXISTING CONDITION?
• Individual health insurers can not impose elimination riders. This is an amendment to your health insurance policy that permanently excludes coverage for a health condition or even an entire body part or system. These are illegal under health reform.
• Individual insurers can no longer impose pre-existing condition exclusion periods. In the past, pre-existing condition exclusion periods could not exceed 12 months. A pre-existing condition exclusion period was imposed for those conditions for which you actually received (or were recommended to receive) a diagnosis, treatment or medical advice within the 12 months immediately before you joined the plan. This is called the objective standard. In Connecticut, pregnancy and genetic information were not considered a pre-existing condition in individual health insurance policies. If a 12-month exclusion period is applied, you can get credit for any prior continuous creditable coverage you have had as long as you have not had a gap of 120 days or more between your old and new coverage.
• Before health reform, if you made a claim during the first two years of coverage, the insurer could look back 12 months from the time of your application to see if the claim is for a condition that would have been considered a pre-existing condition. If the insurer determines, using the objective standard, that the condition is a pre-existing condition, it could refuse to pay for expenses for that condition. This is also banned under the ACA.
WHAT CAN I BE CHARGED FOR AN INDIVIDUAL HEALTH INSURANCE POLICY?
• Individual health insurers cannot increase premiums due to expensive health conditions, gender, or occupation. This is called community rating under health reform. The law prohibits Connecticut health insurers from charging you more because of your health status and other factors, such your gender, but your rates will based on your zip code, age group, tobacco use and carrier.
CAN MY INDIVIDUAL HEALTH INSURANCE POLICY BE CANCELED?
• Your coverage cannot be canceled if you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in the case of managed care plans, continue to live in a managed care plan’s service area. However, your health coverage may be canceled if the insurer discontinues your health policy or withdraws from the individual market. However if you make a claim during the first two years of coverage under your policy, the insurer might re-investigate information you provided during the application process to determine whether you made a misstatement. If so, the insurer might try to take back your policy and void coverage altogether.
If you become involved in one of these “post-claims” investigations, be sure to call the Connecticut Insurance Department to learn more about your rights.
• Some insurance companies sell temporary health insurance policies. Temporary policies are not guaranteed renewable. They will only cover you for a limited time, such as six months. If you want to renew coverage under a temporary policy after it expires, you will have to apply for a new contract. There is no guarantee that coverage will be re-issued at all or at the same price.
COBRA AND STATE CONTINUATION COVERAGE
WHEN DO I HAVE TO BE OFFERED COBRA COVERAGE?
If you are leaving your job and you had group coverage, you may be able to stay in your group plan for an extended time through COBRA and/or state continuation coverage. The information presented below was taken from publications prepared by the U.S. Department of Labor. You should contact the department for more information about your rights under COBRA.
• To qualify for COBRA continuation coverage, you must meet 3 criteria: First, you must work for an employer with 20 or more employees. If you work for an employer with 2-19 employees, you may qualify for state continuation coverage.
Second, you must be covered under the employer’s group health plan as an employee or as the spouse or dependent child of an employee.
Finally, you must have a qualifying event that would cause you to lose your group health coverage.
COBRA QUALIFYING EVENTS
• Voluntary or involuntary termination of employment for reasons other than gross misconduct
• Reduction in numbers of hours worked
• Loss of coverage by the employee because of one of the qualifying events listed above
• Covered employee becomes eligible for Medicare
• Divorce or legal separation of the covered employee
• Death of the covered employee
For dependent children
• Loss of coverage because of any of the qualifying events listed for spouses
• Loss of status as a dependent child under the plan rules
• Each person eligible for COBRA continuation can make his/her own decision. If your dependents were covered under your employer plan, they may independently elect COBRA coverage as well.
• You must be notified of your COBRA rights when you join the group health plan, and again if you qualify for COBRA coverage. The notice rules are somewhat complicated and you should contact the U.S. Department of Labor for more information. In general, if the event that qualifies you for COBRA coverage involves the death, termination, reduction in hours worked, or Medicare eligibility of a covered worker, the employer has 30 days to notify the group health plan of this event. However, if the qualifying event involves divorce or legal separation or loss of dependent status, you have 60 days to notify the group health plan. Once it has been notified of the qualifying event, the group health plan has 14 days to send you a notice about how to elect COBRA coverage. Each member of your family eligible for COBRA coverage then has 60 days to make this election.
Once you elect COBRA, coverage will begin retroactive to the qualifying event. You will have to pay premiums dating back to this period.
• To qualify as HIPAA eligible, you must choose and use up any COBRA or state continuation coverage available to you. SPECIAL SECOND CHANCE TO ELECT COBRA FOR TRADE-DISLOCATED WORKERS
• A second COBRA election period may be available for TAA eligible people who did not elect cobra when it was first offered. The second election period can be exercised 60 days from the 1st day of TAA eligibility, but in no case later than 6 months following loss of coverage. Coverage elected during this second election begins retroactive to the beginning of the special election period – not back to qualifying event.
• Certain people who lost their job-based health coverage because of the impact of imports on their employers have a limited second chance to elect COBRA. People who are receiving benefits from the Trade Adjustment Assistance (TAA) Program are eligible for a federal income tax credit (the Health Coverage Tax Credit, or HCTC) that will pay 80% of their premiums.
• For some laid off workers, TAA benefits begin after their 60-day period to elect COBRA continuation coverage has expired. In this circumstance, TAA-eligible people have a second 60-day period, starting on the date of their TAA eligibility, to elect COBRA. (However, in no case can COBRA be elected more than 6-months following the original qualifying event (i.e. layoff) that caused the loss of group health plan coverage.)
• When COBRA is elected during this special, second election period, coverage starts on the first date of the special election period. Any time that has elapsed between the original qualifying event and the first date of the special election period is not counted as a lapse in coverage in determining continuous coverage history.
WHAT WILL COBRA COVER?
• Your covered health benefits under COBRA will be the same as those you had before you qualified for COBRA. For example, if you had coverage for medical, hospitalization, dental, vision, and prescription drug benefits before COBRA, you can continue coverage for all of these benefits under COBRA. If these benefits were covered under more than one plan (for example, a separate health insurance and dental insurance plan) you can choose to continue coverage under any or all of the plans. Life insurance is not covered by COBRA. If your employer changes the health benefits package after your qualifying event, you must be offered coverage identical to that available to other active employees who are covered under the plan.
WHAT ABOUT COVERAGE FOR MY PRE-EXISTING CONDITION?
• Because your group coverage is continuing, you will not be faced with a new pre-existing condition exclusion period under COBRA. However, if you were in the middle of a pre-existing condition exclusion period when your qualifying event occurred, you will have to finish it.
WHAT CAN I BE CHARGED FOR COBRA COVERAGE?
• You must pay the entire premium (employer and employee share, plus a 2% administrative fee) for COBRA continuation coverage. The first premium must be paid within 45 days of electing COBRA coverage.
• If you elect the 11-month disability extension, the premium will increase to 150% of the total cost of coverage. See below for more information about the disability extension.
• If you lost your group health plan because of involuntary termination of employment that occurred between September 1, 2008 and December 31, 2009, you may be eligible for a federal tax credit to help pay your COBRA premiums for up to nine months. This tax credit was created as part of The American Recovery and Reinvestment Act of 2009 (ARRA) and covers 65% of your COBRA premium. For more information call the Employee Benefits Security Administration at the United State Department of Labor at (866) 444-3272 or visit the COBRA/AARA information center at http://www.dol.gov/ebsa/cobra.html. Information about the COBRA tax credit is also available from the IRS at http://www.irs.gov/newsroom/article/0,,id=204505,00.html and Department of Health And Human Services at http://www.cms.hhs.gov/COBRAContinuationofCov/.
• If you have lost your group health coverage and are receiving benefits from the Trade Adjustment Assistance (TAA) program, you may be eligible for a federal income tax credit to help you pay for new health coverage. This credit is called the Health Coverage Tax Credit (HCTC), and it is equal to 80% of the cost of qualified health coverage, including COBRA state continuation coverage or coverage through the Connecticut Health Reinsurance Association (HRA). (see Chapter 5)
• If you are a retiree aged 55-65 and are receiving pension benefits from PBGC, and are receiving benefits from the Trade Adjustment Assistance (TAA) Program, then you may be eligible for a federal income tax credit to help pay for new health coverage. This credit is called the Health Coverage Tax Credit (HCTC). (see Chapter 5)
• Call the Department of Labor at (866) 444-3272 to find out if other temporary COBRA subsidies are available to you.
HOW LONG DOES COBRA COVERAGE LAST?
• COBRA coverage generally lasts up to 18 months and cannot be renewed. However, dependents are sometimes eligible for up to 36 months of COBRA continuation coverage, depending on their qualifying event. In addition, special rules for disabled individuals may extend the maximum period of coverage to 29 months. To qualify for the disability extension, you must have been disabled at the time of your COBRA qualifying event (such as termination of employment or reduction in hours) or be determined to have become disabled within 60 days of that qualifying event. You must obtain this disability determination letter from the Social Security Administration, and you must notify your group health plan within 60 days of receiving this disability determination letter, and before your original 18 months expires. HOW LONG CAN COBRA COVERAGE LAST?
Qualifying event(s) Eligible person(s) Coverage
Termination Employee 18 months *
Reduced hours Spouse
Employee enrolls in Medicare Spouse 36 months
Divorce or legal separation Dependent child
Death of covered employee
Loss of “dependent child” status Dependent child 36 months
* Certain disabled persons and their eligible family members can extend coverage an additional 11 months, for a total of up to 29 months.
• Usually, COBRA continuation coverage ends when you join a new health plan. However, if your new plan has a waiting period or a pre-existing condition exclusion period, you can keep whatever COBRA continuation coverage you have left during that period. For specifics, ask your former employer or contact the U.S. Department of Labor.
• COBRA coverage also ends if your employer stops offering health benefits to other employees.
• COBRA coverage might end if you are in a managed care plan that is available only to people living in a limited geographic area and you move out of that area. However, if you are eligible for COBRA and are moving out of your current health plan’s service area, your employer must provide you with the opportunity to switch to a different plan, but only if the employer already offers other plans to its employees. Some examples of the other plans your employer may offer you are a managed care plan whose service area includes the area you are moving to, or another plan that does not have a limited service area.
• In Connecticut, you can buy coverage through the Connecticut Health Reinsurance Association regardless of whether you used up your COBRA continuation coverage. Compare the options to see which is best for you. However, if you are planning to move to another state, you may need to be HIPAA eligible to buy individual coverage. If so, you may want to consider COBRA.
WHAT ABOUT CONNECTICUT CONTINUATION COVERAGE?
• If your employer offers fully insured health benefits, including employer groups of less than 20, you may be eligible for continuation coverage under a Connecticut law that is similar to COBRA. If you are eligible, you must apply in writing and pay within a 60 days period following the termination of your group policy.
In addition, if you are eligible for Social Security benefits at the time your qualify for state continuation coverage, you and your dependents may be able to continue coverage until the time you become eligible for Medicare.
Ask your former employer or the Connecticut Department of Insurance about state continuation coverage if you think it applies to you.
• If you lost your group health plan because of involuntary termination of employment that occurred between September 1, 2008 and December 31, 2009, you may be eligible for a federal tax credit that can help you pay for your state continuation coverage premiums for up to nine months. This tax credit is part of The American Recovery and Reinvestment Act of 2009 (ARRA), and covers 65% of your state continuation premium. For more information call the Employee Benefits Security Administration at the United State Department of Labor at (866) 444-3272 or visit them online at http://www.dol.gov/ebsa/cobra.html. In addition, see “Health Information About State Continuation Coverage And ARRA” available the website of the Department of Health And Human Services at http://www.cms.hhs.gov/COBRAContinuationofCov/.
WHEN AM I ELIGIBLE FOR A CONVERSION POLICY?
• In Connecticut, if you were covered under a fully insured group health plan and you leave that plan, you may be able to buy a conversion policy. This is an individual health policy sold through the Connecticut Health Reinsurance Association (HRA). In addition, besides the one offered through the HRA, your former group insurer may offer a non-HRA conversion policy.
• To qualify for a conversion policy, you must have lost group health insurance that you had been covered under for at least 12 months. In addition, you must not be covered under another comparable group health plan or individual health insurance policy.
• You must elect conversion within 120 days, in the case of voluntary termination of employment, or 150 days, in the case of involuntary termination of employment.
• You do not have to elect COBRA continuation coverage or state continuation coverage before you are allowed to buy a conversion policy. However, if you decide to purchase a conversion policy, you will no longer be considered HIPAA eligible.
WHAT WILL MY CONVERSION POLICY COVER?
• HRA offers a choice of three plans comparable to plans offered to small employers: HMO coverage, PPO coverage (in-network and out-of-network options) and a Special Health Care Plan. The benefits covered are generally the same under each plan, but the Special Health Care Plan does not cover outpatient prescription drugs. Plans also differ with respect to deductibles and other coinsurance requirements. All eligible family members must be covered.
• Non-HRA conversion policies must meet certain minimum benefit requirements, which may not be the same as those under your former plan. In addition, these conversion policies may not include important state mandated benefits that are otherwise required in HRA conversion policies.
WHAT ABOUT COVERAGE FOR MY PRE-EXISTING CONDITION?
• Conversion policies cannot impose a new pre-existing condition exclusion period. No insurance plans can discriminate against health conditions according to the ACA.
HOW MUCH CAN I BE CHARGED FOR A CONVERSION POLICY?
• There are limits on what you can be charged for HRA conversion policy. Generally, the premium rates are 25% to 50% higher than the average rate of certain employer group premiums in Connecticut. For a male below the age of 30, for example, the HRA HMO plan monthly premium would be $311.97. For a 60 year-old male, on the other hand, the rate would be $1,355.01. There might be different rates for the Special Health Care Plan depending on your income. Contact the Connecticut Health Reinsurance Association for more information about premiums.
• There is no limit on what your insurer can charge for a non-HRA conversion policy. Premiums are determined based on the age and classification of risk of each person applying for a converted policy. These policies are often more expensive than your prior group coverage.
CAN A CONVERSION POLICY BE CANCELED?
• You can remain enrolled as long as you pay your premium and continue to meet eligibility requirements.
CONNECTICUT HEALTH REINSURANCE ASSOCIATION (HRA)
Connecticut maintains a high risk pool, called the Connecticut Health Reinsurance Association or HRA. HRA provides insurance coverage for all residents of Connecticut who meet certain requirements.
WHEN CAN I GET COVERAGE FROM HRA?
• If you are a resident of Connecticut and over the age of 19 and under the age of 65 you can buy a policy) from HRA. HRA does offer dependent coverage to spouses and children, up to the age of 19, or up to the age of 23 if a full time student.
• If you are HIPAA eligible, you are eligible for coverage from HRA. If you move out of Connecticut, this information may be important to you.
To be HIPAA eligible, you must meet certain criteria:
You must have had 18 months of continuous creditable coverage, at least the last day of which was under a group health plan.
You also must have used up any COBRA or state continuation coverage for which you were eligible.
You must not be eligible for Medicare, Medicaid or a group health plan.
You must not have health insurance.
You must apply for health insurance for which you are HIPAA eligible within 63 days of losing your prior coverage.
HIPAA eligibility ends when you enroll in an individual plan, because the last day of your continuous health coverage must have been in a group plan. You can become HIPAA eligible again by maintaining continuous coverage and rejoining a group health plan.
• If you are not HIPAA eligible but losing group coverage, you may be eligible for a group conversion policy from HRA.
• If you are eligible for the Federal Health Coverage Tax Credit, then you are eligible for coverage from HRA.
WHAT WILL HRA COVER?
• All eligible individuals are eligible for a PPO policy. The individual PPO and the portability PPO policies both have an annual deductible of $1,500 for an individual in-network and $3,000 for a family in-network. After the deductible is met, HRA pays 80% of the claims until your out-of-pocket limit for the policy is met. The out-of-pocket if $7,500 for an individual in-network and $15,000 for a family in-network. HRA pays 100% for most covered services once the out-of-pocket maximum has been met.
• Individuals who are HIPAA eligible, TAA eligible or eligible for a HRA-conversion policy can also choose an HMO policy. These policies do not have an annual deductible. Most services are subject to a $25 co-pay. In-patient hospital services are subject to a $250 per day co-pay. There is a $5,000 individual out-of-pocket limit and a $10,000 family out-of pocket limit.
• The Special Health Care Plan is available for people who meet certain financial requirements. If you are eligible for this policy, you will be responsible for a deductible and may be responsible for some out-of-pocket expenses.
• HRA plans are comprehensive. They cover hospital and physician care, well-child care, maternity care, and other services. Outpatient prescription drugs are covered under the PPO and HMO policies, but not under the Special Health Care Plan. All covered benefits are subject to a lifetime maximum of $1,000,000.
WHAT ABOUT COVERAGE FOR MY PRE-EXISTING CONDITION
• If you are eligible for a HRA plan because you are HIPAA eligible, TAA eligible or eligible for an HRA-conversion policy, you will not be subject to a pre-existing condition exclusion when you enroll in a HRA plan. Otherwise, all other eligible individuals will have a 12-month pre-existing condition exclusion period when you first enroll in HRA. When you enroll, HRA will look back to see if you had a condition during the 6 months immediately before the date of enrollment. Pregnancy can be considered a pre-existing condition, but not genetic information.
WHAT CAN I BE CHARGED FOR HRA COVERAGE?
• Premiums will vary based on the plan you choose. In addition, HRA charges enrollees different rates based on their age and gender. The premium rates are 25% to 50% higher than the average rate of certain group premiums in Connecticut. The monthly HRA premium for a 24-year old man ranges from $250 to $322, depending on which plan option is selected; and the monthly premium for a 64-year old many ranges from $1087 and $1402, depending on which plan is selected.
Reduced premiums are available to low-income persons who choose the Special Health Care Plan. (see Chapter 5)
HOW LONG DOES HRA COVERAGE LAST?
• HRA plans are renewable as long as you pay your premiums, continue to be a resident of Connecticut, and meet other eligibility requirements.