Individual Health Coverage

Besides its group coverage protections, HIPAA also provides some protection for individuals leaving group health coverage. Generally, individual health plans can be expensive and there is no guarantee that you will be offered a policy. However, if, you meet all of the following criteria, you are deemed “HIPAA-eligible,” and you will have a guaranteed right to buy individual coverage:

  • You have had continuous creditable coverage for a total of at least 18 months without a significant break in coverage (63 days or more).
  • Your most recent health coverage was through a group plan.
  • You prior group coverage did not end due to fraud or nonpayment of premiums.
  • You used up your COBRA benefit (if it was available to you).
  • You are ineligible for Medicare, Medi-Cal or any other insurance coverage including group plans.

Protections You Have as a HIPAA-eligible Individual:

Protections You Have if You are Not HIPAA-eligible:

If you aren’t HIPAA-eligible individual, individual plans can refuse to cover you based on your medical history. If a plan does decide to cover you, California law provides some limited protections for you. While your plan can impose pre-existing condition exclusionary periods, both the definition of pre-existing conditions and the amount of time you can be excluded for those conditions depend on how many people are on your policy. For a policy that covers 1-2 people, the plan can look at the past 12 months of your medical history. If you’ve received or been recommended treatment, advice, care, or a diagnosis for a condition within those 12 months, they can deny you coverage for that condition for up to 12 months.

Example:
You sign up for an individual policy that covers you and your husband. You were treated for a back problem 11 months ago. The provider decides to offer you coverage, but they won’t pay for treatment related to your back problem until you’ve been on the plan for 12 months.

If you’re on an individual policy that covers 3 or more people, the provider can only look back 6 months, and can only exclude conditions for 6 months.

Example:
You sign up for an individual policy that covers you, your wife, and your two kids. Since your policy covers 3 or more people, once the provider decides to offer you coverage, it can only look at the prior 6 months of your medical history and can only exclude coverage for up to 6 months.

If you had prior group or individual coverage within 63 days prior to the start of your new policy, your exclusionary period might be reduced.

It’s important to realize that the rules regarding pre-existing conditions only apply if a provider decides to offer you coverage. Before that point, they can look at your entire medical history and deny you coverage based on what they find. It’s also important to note that individual plans can charge you more based on your health. If you can’t get coverage on the individual market or this coverage is too expensive, you might want to look into the Major Risk Medical Insurance Program (MRMIP, or “Mister MIP”)