Academic journal article Social Security Bulletin

Health Insurance Reform Legislation

Academic journal article Social Security Bulletin

Health Insurance Reform Legislation

Article excerpt

by Rita L. DiSimone The Health Insurance Portability and Accountability Act of 1996 (HIPAA), enacted on August 21, 1996 (Public Law 104-19), provides for improved access and renewability with respect to employment-related group health plans, to health insurance coverage sold in connection with group plans, and to the individual market (by amending the Public Health Service Act). The Act's provisions include improvements in portability and continuity of health insurance coverage; combatting waste, fraud, and abuse in health insurance and health care delivery; promoting the use of medical savings accounts; improving access to long-term care services and insurance coverage; administrative simplification; and addressing duplication and coordination of Medicare benefits.

Provisions under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), enacted on August 21, 1996 (Public Law 104-19), fall under five titles:

Title I enacts reforms in both the group and individual health insurance markets to help workers maintain insurance coverage if they lose or leave their jobs.

Title II makes changes to the Social Security Act concerning health care fraud and abuse, administrative simplification, and duplication and coordination of Medicare benefits. Title III contains major health-related tax provisions.

Title IV provides, through the Code, for the application and enforcement of group health plan requirements that parallel those of Title I.

Title V discusses revenue offsets. Major changes under this provision are explained in more detail later in the article.

Title I of HIPAA amends the Employee Retirement Income Security Act of 1974 (ERISA), and the Public Health Service Act (PHS), and Title IV amends the Internal Revenue Code of 1986 (the Code). Group health plans are generally regulated by the Department of Labor under ERISA, and by the Internal Revenue Service under the Code.

Health insurance coverage sold to plans in the group market, and to individuals, is regulated by the States under State law. The individual health insurance market provisions of HIPAA recognize their primary role and afford the States great flexibility in implementing the required reforms. While the statute gives the Department of Health and Human Services (HHS) enforcement authority if a State fails to substantially enforce Federal requirements, the primary authority rests with the States.

Title I: Health Care Portability, Access, and Renewability

Under group market rules, new provisions are added to ERISA, the PHS Act, and the Code to include portability, accessibility, and renewability requirements of group health plans. Increased Portability

The new law provides increased portability by limiting the use of "preexisting condition" exclusions in group health plans. Group health plans and issuers of health insurance offering coverage under group health plans may impose a preexisting condition exclusion with respect to a participant or beneficiary only if:

the exclusion relates to a physical or mental condition, regardless of the cause, for which medical advice, diagnosis, care, or treatment was recommended or received within the 6-month period ending on the enrollment date;

the exclusion extends for a period of not more than 12 months (or 18 months in the case of a late enrollee) after the enrollment date; and

the period of any such preexisting condition exclusion is reduced by the aggregate of the periods of "creditable coverage" applicable to the participant or beneficiary as of the enrollment date.

For purposes of the last provision, creditable coverage means coverage of the individual under any of the following:

(1) a group health plan (including a government or church plan);

(2) health insurance coverage (group or individual);

(3) Medicare;

(4) Medicaid;

(5) military-sponsored health programs;

(6) Indian Health Service or tribal health programs;

(7) a State health benefits risk pool;

(8) Federal Employees' health benefit plans;

(9) a public health plan; or

(10) a health benefit plan under the Peace Corps Act. …

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