HIPAA Certificate of Creditable Coverage: Understanding Pre-existing Condition Protection

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) helps those with preexisting conditions obtain health insurance with a new group health plan. Under HIPAA, a certificate of creditable coverage can eliminate or reduce the exclusion period for a preexisting condition.

Identification

• The certificate of credible coverage concerns the letter "P" in HIPAA for portability. HIPAA allows a patient to port his prior health coverage to a new group plan for purposes of preexisting conditions. Group health plans may limit coverage for a preexisting condition for no more than 12 months.

Significance

• Creditable coverage is designed to give a patient credit for prior health coverage. For each day she had coverage under a prior health plan, she may obtain credit against the 12-month exclusion period available to insurers for preexisting conditions.

Considerations

• When an individual's employment is terminated, a formal certificate is automatically issued; he can also request this certificate. The certificate demonstrates to a new group the period that the new enrollee had coverage. Credit for prior coverage is lost, however, if a break in insurance coverage occurs for 63 days or more.