When Does a Group Plan Have to Let Me In?

• · In general, you have to be eligible for the group health plan. For example, your employer may not give health benefits to all employees. Or, your employer may offer an HMO plan that you cannot join because you live outside the plan’s service area.
• · You cannot be turned away or charged more because of your health status. Health status means your medical condition or history, genetic information, or disability. This protection is called nondiscrimination. Large employers may refuse or restrict coverage for other reasons (such as part-time employment), as long as these are unrelated to health status and applied consistently.

Discrimination due to health status is not permitted

The Acme Company has 200 employees and offers two different health plans. Full time employees are offered a high option plan that covers prescription drugs; part time employees are offered a low option plan that does not. This is permitted under the law. By contrast, in a cost-cutting move, Acme restricts its high option plan to those employees who can pass a physical examination. This is not permitted under the law.

• · When you begin a new job, your employer may require a waiting period before you can sign up for health coverage. These waiting periods, however, must be applied consistently and cannot vary due to your health status. You will not have health insurance coverage during this time.
• · When you begin a new job with health insurance through an HMO, the HMO may require an affiliation period before coverage begins. During this affiliation period, you will not have health insurance overage. The HMO cannot impose any pre-existing condition exclusions if it imposes an affiliation period. An HMO affiliation period cannot exceed 2 months (3 months for late enrollees), and you cannot be charged a premium during this time.
• · You must be given a special opportunity to sign up for your group health plan if certain changes happen to your family. In addition to any regular enrollment period your employer or group health plan offers, you must be offered a special opportunity to enroll in your group health plan after certain events. Depending on the event, these special enrollment periods can last either 30 or 60 days. You can elect coverage at this time. If your group plan offers family coverage, your dependents can elect coverage as well. Enrollment during a special enrollment period is not considered late enrollment.

Certain changes can trigger a 30-day special enrollment opportunity

• · The birth, adoption, or placement for adoption of a child
  · Marriage
  · Involuntary loss of other coverage (for example, that you or your dependents had through yourself or another family member and lost because of death, divorce, legal separation, termination, retirement, or reduction in hours worked)

Certain changes can trigger a 60-day special enrollment opportunity

• · Loss of eligibility under Medicaid or SCHIP
  · Eligibility for a state Medicaid or SCHIP premium assistance subsidy applicable to premiums a group plan
• · In Texas, if you work for a small employer and receive health coverage through your employer’s fully insured plan, the plan must also offer coverage for your spouse and dependents. A fully insured large employer plan is not required to provide spousal and dependent coverage, but if it does, it must offer to cover each eligible spouse and dependent.
• · Under Texas law, newborns and adopted children are automatically covered under the parents’ fully insured group health plan for the first 31 days, if the plan covers dependents. The insurer may require that the parent enroll the child (and pay the premium) within the 31 days in order to continue coverage beyond the 31 day period.
• · Under Texas law, your grandchild may be covered under your fully insured group health plan. In order for your grandchild to qualify for coverage, your plan must cover dependents and your grandchild must be under 25 years old, unmarried, and dependent on you.
• · Under Texas law, disabled adult children can remain on their parent’s fully insured group health plan after reaching the age at which dependent coverage is usually terminated, if they meet certain requirements. To qualify, your adult son or daughter must be incapable of self-sustaining employment because of mental retardation or physical disability and must be chiefly dependent on the policyholder for support and maintenance. Proof of incapacity and must be furnished to the insurer with 31 days of reaching the limiting age and may be required subsequently in the future.
• · If your group health plan covers dependents, you may be able to keep your son or daughter covered under the plan after the age of majority. Most group health plans will allow your son or daughter to remain covered under your family plan past the age of 19 if they are a full time student.

In addition, in Texas, fully insured group health plans must cover as a dependent your unmarried child up to the age of 25. This law does not apply to self-insured group health plans. Check with your employer to find out the kind of group health plan you have.

If your son or daughter is in college and covered as a dependent under your group, but cannot maintain student status due to illness, he or she may still be able to remain covered as your dependent for up to one year. Federal and state law allow dependent children who take a medical necessary leave of absence due to a serious illness or injury to remain covered as dependents under their parents’ group plan for up to one year or until the coverage would otherwise end, whichever comes first. This law will apply to plan years beginning on or after October 9, 2009.

Read you plan documents carefully to determine when your child will “age off” your group health plan.

• · If you have to take leave from your job due to illness, the birth or adoption of a child, or to care for a seriously ill family member, you may be able to keep your group health plan for a limited time. A federal law known as the Family and Medical Leave Act (FMLA) guarantees you up to 12 weeks of job-protected leave in these circumstances.

The FMLA applies to you if you work for a company with 50 or more employees.

If you qualify for leave under FMLA, your employer must continue your health benefits. You will have to continue paying your share of the premium.

If you decide not to return to work at the end of the leave period, your employer may require you to pay back the employer’s share of the premium. However, if you don’t return to work because of factors outside your control (such as a need to continue caring for a sick family member, or because your spouse is transferred to a job in a distant city), you will not have to repay the premium.

For more information on your rights under the FMLA, contact the U.S. Department of Labor.

Can a Group Health Plan Limit My Coverage for Pre-Existing Conditions?

When you first enroll in a group health plan, the employer or insurance company may ask if you have any pre-existing conditions. Or, if you make a claim during the first year of coverage, the plan may look back to see whether it was for such a condition. If so, it may try to exclude coverage for services related to that condition for a certain length of time. However, federal and state laws protect you by placing limits on these pre-existing condition exclusion periods under group health plans. In some cases your protections will vary, depending on the type of group health plan you belong to.

• · HMOs may not exclude coverage for pre-existing conditions. Instead, HMOs may impose an affiliation period before the health coverage begins.
• · Other group health plans can count as pre-existing conditions only those for which you actually received (or were recommended to receive) a diagnosis, treatment or medical advice within the 6 months immediately before you joined that plan. This period is also called the look back period.
• · Group health plans cannot apply a pre-existing condition exclusion period for pregnancy, newborns, children placed for adoption, or genetic information.
• · Group health plans can only exclude coverage for pre-existing conditions for a limited time. The maximum period allowed for exclusion is 12 months. However, if you enroll late in a group health plan (after you were hired and not during a regular or special enrollment period), the rules are different depending on the type of plan you join.

If you seek to enroll late in a self-insured group health plan, your pre-existing condition exclusion cannot exceed 18 months.

If you seek to enroll late in a fully insured group health plan in Texas, the plan must either admit you immediately or admit you at the next open enrollment period. Fully insured group health plans must have at least one 31-day open enrollment period each year. If the plan admits you immediately, you may have a pre-existing condition exclusion period for up to 18 months. If the plan requires you to wait until the next open enrollment period, you may have a pre-existing condition exclusion period of up to 12 months.

• · Group plans that impose pre-existing condition exclusion periods must give you credit for any previous continuous creditable coverage that you’ve had. Most types of private and government-sponsored health insurance are considered creditable coverage.
• · Coverage counts as continuous if it is not interrupted by a break of 63 or more days in a row.

In addition, in Texas, if you had a break in health coverage of more than 63 days in a row, and then enroll in a fully insured group health plan, that plan must give you credit for previous creditable coverage you had in effect at any time during the 12-month period preceding enrollment.

What is creditable coverage?

Most health insurance counts as creditable coverage, including:

Children’s Health Insurance Program               Medicare
Federal Employees Health Benefits(FEHBP)       Military health coverage Foreign National Coverage                                  (CHAMPUS, TRICARE)
Group health plan (including COBRA)               State high-risk pools
Indian Health Service                                   Student health insurance
Individual health insurance                            VA coverage
Medicaid

In most cases, you should get a certificate of creditable coverage when you leave a health plan. You also can request certificates at other times. If you cannot get one, you can submit other proof of prior coverage, such as old health plan ID cards or statements from your doctor showing bills paid by your health insurance plan.

In determining continuous coverage, employer-imposed waiting periods and HMO affiliation periods do not count as a break in coverage. If your new plan imposes a pre-existing condition exclusion period, you can credit time under your prior continuous coverage toward it. If your employer requires a waiting period, the pre-existing condition exclusion period begins on the first day of the waiting period.

What is continuous coverage?

Self-insured and fully insured group health plans credit continuous coverage differently

Take Art, who has diabetes. He had had health insurance every day of his life, since birth, until recently, when he was laid off for 3 months. Fortunately, Art then found a new job with health coverage at Ajax Company. Ajax has a self-insured group health plan that covers diabetes but excludes pre-existing conditions for 12 months. Because Art had a lapse in health coverage longer than 63 days in a row, Ajax’s plan is not required to give him credit for his prior health coverage. Ajax’s group health plan will pay for Art’s diabetes care in 12 months.

Now consider a slightly different situation. Assume Ajax has a fully insured group health plan. In Texas, even if you have a break in health coverage longer than 63 days, fully insured group health plans must give you credit for any creditable coverage you had in force during the 12-month period preceding enrollment. Therefore, Ajax will give Art credit for 9 months of prior creditable coverage (12 months minus the 3-month lapse in health coverage). Art’s pre-existing condition exclusion period will only be 3 months, at the end of which Ajax will begin paying for Art’s diabetes care.

• · Your protections may differ if you move to a self-insured group health plan that offers more benefits than your old one did. Self-insured group health plans can look back to determine whether your previous plan covered prescription drugs, mental health, substance abuse, dental care, or vision care. If you did not have continuous coverage for one or more of these categories of benefits, your new self-insured group health plan may impose a pre-existing condition exclusion period for that category. Plans that use this method of crediting prior coverage must use it for everyone and must disclose this to you when you enroll. Fully insured group plans in Texas cannot use this method of crediting coverage.

Even if coverage is continuous, there may be an exclusion for certain benefits

Sue needs prescription medication to control her blood pressure. She had 2 years of continuous coverage under her employer’s group health plan, which did not cover prescription drugs. Sue changes jobs, and her new employer’s self-insured plan does cover prescription drugs. However, because her prior policy did not, the new plan refuses to cover her blood pressure medicine for 6 months.

Question: Is this permitted?

Answer: Yes. However, the plan must pay for covered doctor visits, hospital care, and other services for Sue’s high blood pressure. It also must pay for covered prescription drugs she needs for other conditions that were not pre-existing.

• · No pre-existing condition exclusion period can be applied without appropriate notice. Your group health plan must inform you, in writing, if it intends to impose such a period. Also, if needed, it must help you get a certificate of creditable coverage from your old health plan.

As You Are Leaving Your Group Health Plan…

If you are leaving your job or otherwise losing access to your group health plan, you may be able to remain covered under the group health plan for a limited time. In addition, you may have special protections when buying certain kinds of individual health insurance policies. See Individual Health Plans for more information about COBRA continuation coverage, state continuation coverage, conversion coverage, and the Texas Health Insurance Risk Pool.

• · If you lost your group health plan 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 is equal to 80% of the cost of qualified health coverage, including COBRA and a policy offered through the Texas Health Insurance Risk Pool. (see Financial Assistance)