HIPAA portability in group policy

TA | January 21, 2009

Q: I am a member of a group insurance policy. Why does it not comply with HIPAA laws of portability and the insured receiving credit for the previous 12 months.

A: The group of federal laws known as Health Insurance Portability and Accountability Act (HIPAA) have far-reaching effects on all insurance but not all group policies are controlled by all of the provisions of these laws. For example, the portability provisions do not apply to limited benefit policies are not considered as "creditable coverage" for the purpose of more encompassing group major medical insurance coverage.

When HIPAA was originally conceived, most group health insurance policies offered major medical coverage. Now, due to the increasing cost of medical care, most group policies issued offer only limited benefits for specific medical conditions or pre-defined dollar limits of coverage. In light of this trend, HIPAA is effectively obsolete and this deficit is addressed in almost all of the national health insurance reform proposals.  


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