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Pre-Existing Conditions Prohibited


Under the Affordable Care Act, both grandfathered and non-grandfathered plan sponsors and insurance carriers cannot refuse to provide insurance coverage or charge an individual a higher premium due to a "pre-existing condition" for their medical plan. The mandate applies to both the employee and their eligible dependents. The mandate does not apply to "excepted benefit" plans such as stand alone dental and vision plans. In addition, Plans may continue to exclude all benefits for a particular condition from their plan.

 

Historical Background

Prior to the passing of health care reform, health plans were able to impose limitations based on pre-existing conditions for a period up to 12 months. The pre-existing limitation period could be reduced if the member would prove that they had prior creditable coverage.

 

Beginning in 2010 with the initial passing of health care reform, plans were prohibited from imposing any pre-existing condition exclusions or limitations on individuals under age 19.

 

The mandate expanded to all individuals regardless of age beginning with plan years starting on January 1, 2014.

 

Certificates of Creditable Coverage

Prior to December 31, 2014, an individual who lost employer sponsored health coverage needed to be provided with a HIPAA certificate of creditable coverage. The certificate would provide coverage proof and allow the member's pre-existing exclusion period under their new health plan to be reduced.

 

HIPAA certificates of creditable coverage were not intended to provide proof of Minimum Essential Coverage (MEC) and are only provided once coverage had terminated. They do not provide the necessary information in order to document that an individual had MEC for the purposes of the individual shared responsibility mandate which will now be satisfied with the 6055/6056 employer reporting. As of December 31, 2014, the regulations no longer require HIPAA certificates of creditable coverage and Meritain has stopped production of the document.

 

Penalties

Plans that fail to comply with the pre-existing condition rules will be subject to an excise tax of $100 per day per affected individual.

 

This content is being provided as an informational tool. It is believed to be accurate at the time of posting and is subject to change. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this information, Meritain Health is not exercising discretionary authority or assuming a plan fiduciary role, nor is Meritain Health providing legal advice.