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Employer Health Insurance: Your Rights

By Compuquotes Team on March 27th, 2008

Health Insurance

Given that most Americans have access to employer health insurance, chances are you have this type of health insurance-but do you know what your rights are?

While individual health insurance policies are regulated at the state level, employer-based group health insurance is regulated at the federal level. There are three main federal statutes that provide certain rights to all employees with group health insurance.

Employee Retirement Income Security Act (ERISA)

Enacted in 1974, ERISA is responsible for the regulation of employee benefits of all types, including group health insurance, retirement plans, and pensions.

In terms of job-offered group health insurance plans, ERISA provides all employees with the right to important information about their health plans, such as plan rules, financial information, and information about the management and operation of the plan.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Enacted in 1985, COBRA requires that employers with twenty or more workers must offer 'continuation coverage' to employees (or their dependents) who leave the health plan for any of the following reasons:

Employment termination (unless the employee is terminated for gross misconduct)
A reduction in the amount of hours the employee works

In the above two cases, COBRA coverage may last for up to eighteen months.

The death of the employee
If the employee qualifies for Medicare
If an employee's spouse leaves the plan due to legal separation or divorce
If a dependent child of the employee loses their eligibility

In these situations, COBRA coverage may last for up to three years.

Health Insurance Portability and Accountability Act (HIPPA)

Enacted in 1996, HIPPA was designed to make it easier for people to qualify for job-based health insurance, and to help people retain coverage during transition periods between jobs. HIPPA includes the following:

Discrimination Protection: No employees can be excluded from employer healthcare on the basis of their current health. If an employer offers health insurance benefits they must offer them to all employees, regardless of their health status. This protection applies to all companies, of all sizes, and also excludes any employer from discriminating on the grounds of medical history and genetic information.

Pre-Existing Condition Exclusion Limits: An employer healthcare plan can exclude coverage for a pre-existing medical condition only if the employee received medical diagnosis, care, treatment, or advice for that condition within six months of the date they enrolled in the health insurance plan. This exclusion period may last for up to twelve months (and up to 18 months for late enrollment).

However, the exclusion period may be reduced if an employee was enrolled in prior creditable coverage no more than 63 days prior to enrolling in the new health plan (meaning that if the creditable coverage ended more than 63 days prior, it does not count towards reducing the exclusion period).

Guaranteed Renewability: All coverage is guaranteed renewable, for every employee, regardless of how many claims an individual makes.

Dental and Vision Care: Note that dental and vision plans do not have to comply with the regulations if they are offered separately from the general health insurance plan. If dental or benefits are part of the health plan, they must comply.

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