 Posted: Tue Apr 06, 2010 4:38 am Post subject: |
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| Quote: | | Please explain what 'creditable coverage' actually means as well as the period of exclusion for pre-existing conditions. |
Great question and one that many people don't have a clue about.
Creditable coverage is coverage you had under a previous health plan that will be "credited" against any pre-existing condition exclusions ("pre-x") that might be imposed on the insured in a new health plan. Creditable coverage applies to most, but not all, situations. The most common application of creditable coverage applies when one goes from one group plan to another group plan, but can apply from group to individual plans as well.
The insured/enrollee gets credit for all of the time spent in their previous health plan that must be applied to any waiting periods imposed for pre-x under the new health plan, but there cannot be a "break" in coverage of more than 63 days. It's also important to remember that HIPAA allows for pre-x,; it simply limits how long the exclusion period can last.
Here's an example. Let's say you've been insured under your employer's group plan continuously for the last 10 months and you get a new job that offers group insurance benefits. Remember that in most states, there's no law that says an employer must provide these perks. You start your new employment within the 63-day "rule" and you become eligible for benefits after your "employment probation." You've heard of this- "eligible for benefits after 90 (or whatever) days." That doesn't count against you, so ignore that period of time.
Let's also say that your state allows some pre-x to be attached to your coverage. Federal law says that they can't look back more than 6 months to see if you have a preexisting condition, so if you haven't had any medical issues during the last 6 months, you're free and clear. Just about every state says that a group plan must accept you, so you're fully covered. But let's say that you had knee surgery a couple of months ago. They can now exclude coverage on that knee for up to 12 months after enrollment into the plan and for up to 18 months if you're a "late" enrollee into the plan.
So, your coverage is accepted and issued, but the insurer attaches an exclusion for your knee problem. If you'll recall, they're allowed 12 or 18 months of exclusionary language. However, creditable coverage comes to the rescue. The insurer must credit the time spent in your previous plan (10 months, remember?) towards that one-year exclusion period on your knee. Sooooo, the longest they can deny coverage on your knee would be 2 months...the 12 month exclusions period minus the 10 months you were in the previous plan.
If you had been in the previous plan, for, say 2 years- there could be no exclusionary period for the knee. If you had a break in coverage of more than 63 days, no creditable coverage.
I hope this explains what you were looking for. If ya need more, let us know, ok?
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InsTeacher
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