Pre-Existing Condition Limitation Provisions

The pre-existing condition limitation provision rules of each health insurance carrier has been standardized by the Health Insurance portability and Accountability Act of 1996 (HIPAA). HIPAA standardized the pre-existing condition limitation rules to read as follows:

TIMELY APPLICANTS WITH 12 MONTHS PRIOR COVERAGE

If an individual has 12 months of continuous coverage immediately prior to his/her effective date of the coverage with a new insurance carrier and the individual is a timely applicant, no pre-existing condition limitation provision applies. A timely applicant is a new hire that applies for coverage within 30 days of his/her eligibility date for coverage after any applicable employer probationary periods for coverage. Continuous coverage is terminated by any gaps in coverage of more than 63 days (some carriers allow 90 days) while an employee is not in a probationary period for coverage. Time spent in a probationary period for coverage is not counted toward the gap in coverage mandate.

LATE APPLICANTS WITH 12 MONTHS PRIOR COVERAGE

Late applicants that have 12 months of prior coverage may be assessed a pre-existing condition limitation of up to 18 months. Some carriers waive the pre-existing condition limitation if the individual had 12 months of prior continuous coverage with no gaps in coverage. For example, Humana allows an applicant who had prior coverage (12 months) and the coverage lapsed or terminated (whether voluntarily or involuntarily terminated) to be covered immediately with no pre-existing condition limitation provisions. Late applicants without prior coverage have an 18 month pre-existing condition limitation if the below applies.

APPLICANTS WITHOUT 12 MONTHS PRIOR COVERAGE

An applicant that does not have 12 months of prior coverage will be assessed a pre-existing condition limitation if the following applies: A pre-existing condition limitation of up to 12 months will apply if the individual had treatment for any ailment within 6 months prior to his/her effective date of coverage and the individual cannot go treatment free of the ailment for the first 6 months while covered under the plan. If the individual can go the first 6 months treatment free while covered under the plan, then no pre-existing condition limitation applies. If the individual cannot go 6 months treatment free, then a 12 month pre-existing condition limitation will apply.