HIPAA Common Questions: Administration (Part 2)
Posted on: December 29, 2014Categories: HR & ComplianceWhen does HIPAA prohibit a group health plan from discriminating against an individual?
HIPAA does not allow a group health plan to deny an individual eligibility for benefits or charge a higher premium than is required of a similarly situated individual, based upon health factors. Health factors include:
- Health status;
- Medical condition (physical or mental);
- Receipt of health care;
- Claims experience;
- Medical history;
- Genetic information;
- Evidence of insurability;
- Disability; and
- Any other health status-related factor determined appropriate by the Department of Health and Human Services.
HIPAA does not allow a group health plan to treat an individual within a group of similarly situated individuals differently. However, a plan may provide different health benefits for employees in different groups if the distinction between the groups is based on bona fide employment-based classifications. For example, a group health plan may provide different benefits to employees located at different geographic locations, or based upon their employment classification (for example, full-time versus part-time status).
Although health insurance issuers may consider all relevant health factors of individuals within a group in order to establish aggregate rates for coverage provided under a group health plan, issuers cannot engage in list billing based on health factors. Thus, an issuer cannot charge an employer different premiums for similarly-situated individuals based on health factors. In addition, effective for plan years beginning on or after Jan. 1, 2014, issuers may vary the premium rate charged to a non-grandfathered plan in the individual or small group market from the rate established for that particular plan based only on the following factors:
- Age;
- Geography;
- Family size; and
- Tobacco use.
Can a group health plan require its employees to pass a physical exam in order to be eligible for health insurance coverage under HIPAA?
No. The final HIPAA nondiscrimination regulations clarified that a group health plan may not require individuals to pass a physical exam in order to be eligible for health insurance coverage, even if the individual is a late enrollee.
Under HIPAA, may group health plans delay an individual’s effective date for coverage because that individual is confined to a hospital?
No. A group health plan may not delay an individual’s effective date for coverage because the individual is confined to a hospital.
Non-confinement clauses are most often used to allocate responsibility for coverage of individuals that are confined to a hospital at the time an employer moves its coverage from one health insurance coverage issuer to another.
The final HIPAA nondiscrimination regulations make it clear that the health insurance coverage issuer, irrespective of state law, must make an individual’s coverage effective regardless of whether that individual is confined to a hospital. Many state laws allow the assuming carrier to delay an individual’s effective date until the confinement has ended. The final regulations suggest that state laws may be used as a coordination of benefits provision.
Under HIPAA, may group health plans delay an individual’s effective date for coverage because that individual is not actively at work?
A group health plan may not delay enrollment in the health plan until an employee is actively at work, unless individuals who are absent from work due to any health factor are treated, for purposes of health insurance coverage, as if they are actively at work. The final HIPAA nondiscrimination regulations clarified the use of actively at work provisions.
Do group health plans violate the HIPAA nondiscrimination regulations if they contain limitations on specific types of benefits?
The final HIPAA nondiscrimination regulations confirmed that group health plans may include benefit limitations within their plans so long as the limitations apply uniformly to all similarly situated individuals. For example, coverage may be denied for treatment that is not medically necessary or a health plan may exclude all coverage for a specific condition.
While limits or exclusions applicable to all similarly situated employees are permissible under the final HIPAA nondiscrimination regulations, group health plans must also determine whether the benefit limitations violate other laws, such as the Americans with Disabilities Act, the Pregnancy Discrimination Act and the Affordable Care Act.
In the event a group health plan implements a plan design change effective at the beginning of the plan year, it will not be considered to be directed at any one individual. However, a plan design change implemented in the middle of the plan year would be reviewed under a facts and circumstances test to determine if the changes were made in anticipation of a specific individual’s claim for treatment – which violates the HIPAA nondiscrimination regulations.
May group health plans charge employees a higher premium or deny health insurance coverage based upon the employee’s participation in a dangerous or hazardous activity?
No. A group health plan may not charge an employee a higher premium or deny health insurance coverage based upon an employee’s participation in a dangerous or hazardous activity (for example, skydiving or bungee jumping). However, a group health plan may exclude coverage for treatment of injuries related to the participation in these activities.
Group health plans may not exclude benefits because they are related to an act of domestic violence or a medical condition. For example, a group health plan may not exclude coverage for treatment of self-inflicted injuries sustained in connection with an attempted suicide if the injuries were also caused by a medical condition such as depression. Benefits may not be denied if the injuries resulted from a medical condition even if the medical condition was not diagnosed before the injury.
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