COBRA and HIPAA.

By: Taylor


COBRA can be used with HIPAA in several ways to offer individuals better health coverage and protect their right to health coverage. Consolidated Omnibus Budget Reconciliation Act or COBRA offers the continuation of insurance coverage to employees, their spouses, their former spouses, and their dependent children in the case of loss of group health coverage. This loss could be due to death of a covered employee, termination or reduction in the hours of a covered employee’s employment. These reasons should not include gross misconduct, divorce from a covered employee, entitlement to Medicare and loss of dependent status. COBRA coverage begins on the date of the loss of health care coverage due to a qualifying event. COBRA beneficiaries typically can receive group coverage for a maximum of 18 months for qualifying events. However, certain qualifying events will allow up to 36 months of coverage.

The Health Insurance Portability and Accountability Act or HIPAA offers protection to millions of workers and provides portability and continuity of health insurance coverage. It provides additional opportunities to enroll in a group health plan in cases of loss of coverage. It provides protection against loss of coverage for a pre-existing condition. HIPAA does not require employers to offer health coverage. It does not guarantee coverage of pre-existing condition by new employer’s health plan and it does not prohibit an employer from imposing a pre-existing condition exclusion period in case of any condition being treated for a condition during the past 6 months.

COBRA can be used in conjunction with HIPAA in following ways:

COBRA coverage may help in avoiding a break between periods of health plan coverage. If an employee has interruption between jobs and health plans, they can use COBRA coverage during that time.
COBRA coverage is counted as creditable coverage if there is no break after termination of COBRA coverage.
COBRA coverage can be used to counterbalance any pre-existing condition exclusion period.
COBRA continuation coverage acts as bridge to fill the gap due to waiting period or a pre-existing condition exclusion period.
Individuals having COBRA coverage can get their COBRA coverage cut off if they become covered under another group health plan coverage not having any pre-existing condition exclusion period.
Individuals who are no longer eligible for COBRA coverage can use the opportunity to get a special enrolment under HIPPA for any other coverage for which they are eligible. Should a person using COBRA voluntarily stopping coverage, or stop payment of COBRA premiums, the right of special enrolment right cannot be used.
Changing from Group Health Coverage to an Individual Insurance Policy

HIPAA provides protection to those who are unable to get group health insurance. It offers access to individual insurance policies and state high-risk pools for eligible individuals. To be eligible for enrolment in individual insurance policies and state high-risk pools individuals must have had coverage for at least 18 months without a significant break and most recently in a group health plan. Another requirement is the loss of group coverage should not be due to fraud or non-payment of premiums. Enrollees should not be eligible for COBRA coverage or have exhausted the eligibility. Additional requirements are: ineligibility for coverage under another group health plan, Medicare, or Medicaid and not have any other health insurance coverage.

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