California Department of Insurance

In 1996 a federal law called the Health Insurance Portability and Accountability Act (HIPAA) was promulgated providing individuals who just lost their employer-sponsored health plan a way to secure and purchase health insurance even if they suffer a preexisting health condition. This is a sure way of providing health coverage when needed to anybody with a pre known disease which can be denied due to the health status of that person. Under this federal law, the person that meets the eligibility qualifications can ask any health insurance companies that sell individual plans to offer him health insurance regardless of any pre-existing medical condition. This requirement is called the “guaranteed issue” where the insured may not be declined coverage based on medical reasons.

An eligible individual must meet the following conditions:

 • His health care insurance coverage must have originated from an employer’s sponsored group health plan that qualifies under COBRA or Cal-COBRA coverage for at least 18 months.
 • All available continuation coverage provisions under COBRA or Cal-COBRA has been exhausted. (When an employer terminates a currently active group health plan, COBRA or Cal-COBRA continuation coverage ends and is deemed exhausted.).
 • The person is not eligible under any group health plan, Medi-Cal, Medicare, and/or do not enjoy other health plan coverage.
 • The person did not lose his health insurance due to fraud or premium non-payment.

The person did not lose his health insurance due to fraud or premium non-payment.Once Cal-COBRA or COBRA is exhausted, an eligible individual has 63 days to apply for a guaranteed HIPAA policy from a health or insurance company. All insurers that sell individual health care policies are mandated to offer their two most popular individual health plans to individuals eligible under HIPAA regardless of their pre-existing health condition. It is important to note that a conversion policy is not a HIPAA policy. That means that if the qualified person accepts a conversion policy after exhausting Cal-COBRA or COBRA, he forfeits his HIPAA eligibility.Applying for a policy under HIPAA requires a Certificate of Creditable Coverage from his health insurance company. The Certificate of Creditable Coverage is a written document indicating the length of the policy coverage. The Certificate is proof of the 18-month creditable coverage when HIPAA policies are applied for.Although HIPAA is federal law, as of January 1, 2001, California state law followed suit and now complies with HIPAA to answer the clamor for more comprehensive health coverage of its citizen.

Salient Points about HIPAA: 
 • HIPAA empowers eligible employees who just lost group insurance coverage to obtain individual health plans.
 • Individuals eligible under HIPAA need not undergo medical underwriting.
 • HIPAA policies are issued to individuals on a guaranteed issue basis regardless of his medical history.
 • Eligible individuals who have exhausted COBRA or Cal-COBRA extension have only 63 days to apply for a HIPAA policy.
 • HIPAA policies are not considered as conversion policies. Taking a conversion or short-term policy terminates HIPAA eligibility.
 • Interested individuals may get in touch with the CDI or the DMHC for inquiries on the type of health insurance coverage or any problem with HIPAA.   GP