Search Frequenty Asked Questions

Terms We Use

Note: The following terms are not necessarily the legal definitions that appear in the HIPAA statute or regulations. For definitions of specific terms, please refer to the pertinent statute or regulation.

Affiliation Period

If your group health plan provides coverage through a contract with an HMO, an affiliation period is the length of time an HMO may make you wait before you can receive benefits. During this time, you cannot be charged a premium. Under HIPAA, an affiliation period may not last longer than two months (three months if you are a late enrollee), and it must begin on your enrollment date under the group health plan. As a result, if you switch to HMO coverage more than 3 months after your enrollment date, the HMO cannot impose an affiliation period on you. Affiliation periods are an alternative to pre-existing condition exclusions; an HMO cannot impose both, even on different individuals.

Certificate of Creditable Coverage

A certificate of creditable coverage is a document that describes how much creditable coverage you have, and the date the coverage ended. Most group health plans and insurance issuers are required to issue certificates automatically shortly after your coverage ends. You also can request a certificate describing particular coverage at any time while the coverage is in effect and within 24 months of the time the coverage ends.

Church Plan

A church plan is a health plan that is established by a church or other religious organization, or by a convention or association of churches, for its employees. Church plans may include employees of hospitals or universities owned and operated by such religious organizations.

COBRA Continuation Coverage or COBRA

COBRA continuation coverage is coverage that is offered to you in order to satisfy the requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA requires employers to permit employees or family members to continue their group health coverage at their own expense, but at group rates, if they lose coverage because of a loss of employment, reduction in hours, divorce, death of the supporting spouse, or other designated events.

Conversion Coverage

Conversion coverage is individual health coverage that might be offered to you when you lose group health plan coverage.

Conversion Policy

A conversion policy is an individual health insurance policy that you may be able to get after losing group coverage. A health insurance issuer may allow you to "convert" to an individual policy once you have lost group coverage. This means you would still have a policy generally with the same issuer, but it will be an individual policy. The benefits offered by the conversion policy may not be the same as those under your group policy. Generally, the premiums for a conversion policy will be more expensive.

Creditable Coverage

Creditable coverage is prior health care coverage that is taken into account to determine the allowable length of pre-existing condition exclusion periods (for individuals entering group health plan coverage) or to determine whether an individual is a HIPAA eligible individual (when the individual is seeking individual health insurance coverage.) Most health coverage is creditable coverage, including coverage under any of the following:

• a group health plan (related to employment).
• a health insurance policy; including short-term limited duration policies.
• Medicare Part A or Part B;
• Medicaid;
• a medical program of the Indian Health Service or tribal organization;
• a State health benefits risk pool;
• TRICARE (the health care program for military dependents and retirees);
• Federal Employees Health Benefit Plan;
• a public health plan; or
• a health plan under the Peace Corps Act.

Enrollment Date

Your enrollment date is the first day on which you are able to receive benefits under a group health plan, or if the plan imposes a waiting period, the first day of your waiting period. Unless you chose not to participate in the plan when you first are hired, your enrollment date usually is the date on which you begin work.

ERISA

The Employee Retirement Income Security Act (ERISA) is a law that provides protections for individuals enrolled in pension, health, and other benefit plans sponsored by private-sector employers. The US Department of Labor administers ERISA.

Genetic Information

This term refers to information about genes, gene products, and inherited characteristics that may derive from the individual or a family member.

Group Health Plan

A group health plan is an employee welfare benefit plan maintained by an employer or union that provides medical care to employees and often to their dependents as well.

Health Insurance Issuer or Issuer

Any company that sells health insurance is a health insurance issuer. Insurance companies and HMOs are both health insurance issuers.

High-Risk Pool

A high-risk pool is any arrangement established and maintained by a State primarily to provide health insurance benefits to certain State residents who, because of their poor health history, are unable to purchase coverage in the open market or can only acquire such coverage at a rate that is substantially above the rate offered by the high-risk pool. Coverage offered by a high-risk pool is comparable to coverage available in the open market, but the risk for that coverage is borne by the State, which generally supports the losses sustained by the pool through assessments on all health insurers doing business in the State, based on their relative market shares, and/or through general tax revenues.

HIPAA Eligible Individual

A HIPAA eligible individual means a person who is guaranteed the right under HIPAA to purchase individual health insurance coverage with no pre-existing condition exclusions. If you meet all the following requirements, you are an "eligible individual" and HIPAA guarantees your right to purchase individual coverage:

• You don't have, or will be losing, coverage under a group health plan or an individual health insurance policy.
• You have at least 18 months of creditable coverage without any significant break. (A significant break is a period of 63 or more days during all of which you had no coverage. If you get coverage by midnight of the 63rd day, you have not incurred a significant break in coverage).
• Your most recent coverage must have been a group health plan (through your or a family member's employer or union).
• You are not eligible for Medicare or Medicaid.
• You do not have other health insurance.
• You did not lose your insurance for not paying the premiums or for committing fraud.
• You accepted and exhausted your COBRA continuation coverage or similar State coverage if it was offered to you.

Individual Market

This refers to health insurance that is made available to individuals and their dependents other than in connection with a group health plan.

Insured Plan

An insured plan is a group health plan under which the benefits are provided by the sponsoring employer or union through the purchase of health insurance coverage from an HMO or an insurance company. In exchange for a premium or contribution paid by the employer or union and/or its employees or members, the HMO or the insurance company bears full risk for the cost of the benefits provided.

Large Employer

A large employer has at least 51 employees.

Late Enrollee

A late enrollee is an individual who does not enroll in a group health plan at the first opportunity, but enrolls later if the plan has a general open enrollment period. A late enrollee is different from a special enrollee.

Medical Condition

A medical condition is any physical or mental condition resulting from an illness, injury, pregnancy, or congenital malformation.

Network Plan

A network plan is a health insurance policy that provides coverage through a defined set of providers under contract with the insurance issuer.

Plan Administrator

The person responsible for answering any questions you may have about your group health plan. The materials that describe the plan should identify who your plan administrator is.

Policy

An insurance policy or any other contract (such as an HMO contract) that provides you or your group health plan with health insurance coverage.

Pre-existing Condition Exclusion

A pre-existing condition exclusion limits or denies benefits for a medical condition that existed before the date that coverage began. A "medical condition" is any physical or mental condition resulting from an illness, injury, pregnancy, or congenital malformation. HIPAA limits the use of pre-existing condition exclusions and establishes requirements that a pre-existing condition exclusion must satisfy.

Premiums

Premiums refer to the amount that you contract to pay an insurance issuer or HMO, generally on a periodic basis, in return for health coverage.

Self-Insured(or Self-Funded)Plan

A self-insured (or self-funded) plan is a group health plan under which the risk for the cost of the benefits provided is borne by the sponsoring employer or union. The employer or union may hire a third party administrator to perform such services as paying claims, collecting premiums, or supplying other administrative services), but the financial liability for the cost of the benefits provided remains with the employer or union. Typically, a self-insured plan will purchase stop-loss insurance to limit its financial liability to a certain level.

Short-Term Limited Duration Insurance

Short-term limited duration insurance is a health insurance contract that expires within 12 months and cannot be renewed beyond that point.

Signifigant Break in Coverage

A significant break in coverage is 63 or more full days in a row without any creditable coverage. Some States, however, may allow a longer break in coverage.

Small Employer

A small employer has at least two but not more than 50 employees. Some States, however, may consider a business with only one employee a small employer.

Special Enrollment

A special enrollment is an opportunity to enroll in a group health plan without having to wait for an open enrollment period. A group health plan must provide you with an opportunity for special enrollment if you declined coverage under the plan because you had alternative coverage but since have lost that alternative coverage, or if you have new dependents (through marriage, birth or adoption).

Waiting Period

In the individual market, a waiting period is the time between when your application is filed and your coverage begins. With respect to a group health plan, it is the time that must pass before a new employee becomes eligible for benefits under the plan. The waiting period generally starts on the date of hire.