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Published: 2008-03-26

Certificates of Credible Coverage Under the Health Insurance Portability and Accountability Act of 1996



HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996: CERTIFICATE OF CREDITABLE COVERAGE

WHAT IS CREDITABLE COVERAGE?

The concept of creditable coverage is that individuals should be given credit for previous health coverage when moving from one employer group health plan to another, from an employer group health plan to an individual policy, or from certain kinds of individual coverage to an employer group health plan.

Most health coverage is creditable coverage, including prior coverage under a group health plan (including a governmental or church plan), health insurance coverage (either group or individual), Medicare, Medicaid, a military-sponsored health care program such as CHAMPUS, a program of the Indian Health Service, a State high risk pool, the Federal Employees Health Benefit Program, a public health plan, and a health benefit plan provided for Peace Corps members.

WHAT IS A CERTIFICATE OF CREDITABLE COVERAGE?

The certificate of creditable coverage is intended to establish an individual's prior creditable coverage for purposes of reducing the extent to which a plan or issuer offering health insurance coverage in the group market can apply a preexisting condition exclusion. The certificate of creditable coverage is a written document that reflects certain details about an individual's creditable health insurance coverage.

WHO SUPPLIES THE CERTIFICATE?

Plans, issuers, individual insurance (including association plans and college health plans), Medicare, Medicaid, CHAMPUS, the Indian Health Service, and insurers under the Federal Employees Health Benefit Program are responsible for issuing certificates. State high risk pools, public health plans, and Peace Corps plans are not responsible for issuing certificates. When both a plan and an issuer are involved, the obligation to furnish a certificate is imposed on both the plan and issuer. To avoid duplication, the plan and issuer may have an agreement regarding whether the responsibility for providing the certificate will fall on the plan or issuer. If the plan is self-insured, it is the plan's responsibility.

WHEN DO ENTITIES (LISTED ABOVE) NEED TO START PROVIDING CERTIFICATES OF CREDITABLE COVERAGE?

  • Plans, issuers, and other entities are not required to provide certificates before June 1, 1997. However, certain certification requirements apply to periods of coverage and events that occur after June 30, 1996.
  • Beginning June 1, 1997, plans, issuers, and other entities must arrange to have certificates delivered to all individuals who had terminated their health coverage between October 1, 1996, and May 31, 1997.
  • After June 1, 1997, plans, issuers, and other entities must arrange to provide certificates in a timely manner to individuals as they lose coverage, or begin or end COBRA.
  • By July 1, 1998, plan, issuers, and other entities must also provide certificates with the names and individual dates of coverage of dependents.

WHAT EVENTS TRIGGER THE ISSUANCE OF A CERTIFICATE?

Specifically, the certificate must be furnished automatically to:

  • an individual who is enrolled in individual insurance coverage or a qualifying health coverage program within a reasonable time after the individual loses coverage.
  • an individual who is a qualified beneficiary entitled to elect COBRA continuation coverage at a time no later than a notice is required to be provided for a qualifying event under COBRA, such as termination of employment, divorce, or death.
  • an individual who loses coverage under a group health plan and who is not a qualified beneficiary entitled to elect COBRA continuation coverage, within a reasonable time after coverage ceases. (Typically, this would happen in small-employer plans that are not subject to COBRA that typically have fewer than 20 employees. For purposes of HIPAA, a small employer is defined as having 2-50 employees.) The timing requirement is satisfied if the certificate is provided by the time a notice is required to be provided under an applicable State program similar to COBRA. It must be provided promptly in States that do not have such a law.
  • an individual who is a qualified beneficiary under a group health plan and has elected COBRA continuation coverage, after either cessation of COBRA continuation coverage or, if applicable, after the expiration of any grace period for the payment of COBRA premiums.

In addition, a certificate also is required to be provided upon the request of, or on behalf of, an individual not later than 24 months after the individual loses coverage. In this case, the certificate is required to be provided at the earliest time that a plan, issuer, or other entities, acting in a reasonable and prompt fashion, can provide the certificate.

In general, certificates are provided without a fee.

WHAT IS THE FORM OF THE CERTIFICATE?

The certificate must be provided in writing. When such an arrangement is acceptable to a new plan or issuer, the individual, and the source of prior coverage, the certification information may be provided by telephone.

WHAT INFORMATION IS REQUIRED IN A CERTIFICATE?

Generally, a plan, issuer, or other entities may simply state in the certificate that the individual has at least 18 months of creditable coverage that is not interrupted by a significant break and indicate the date coverage ended. (A certificate would never have to reflect coverage in excess of 18 months without a 63-day break because this is the maximum creditable coverage that an individual could need under the preexisting condition exclusion rules and the rules for access to the individual market.)

In any other case, the certificate must disclose the following:

  • the date any waiting or affiliation period began (the ending date for a waiting or affiliation period will always be the date coverage begins and thus is not required to be separately identified in a certificate);
  • the date coverage began; and
  • the date coverage ended or indicate if coverage is continuing (these dates would include anyperiod of COBRA continuation coverage).

WHAT IF THE NUMBER AND NAMES OF AN INDIVIDUAL'S DEPENDENTS ARE UNKNOWN?

  • During the transition period (through June 30, 1998), a plan or issuer may satisfy its obligation to provide a written certificate regarding the coverage of a dependent of a participant by providing the name of the participant covered by the plan and specifying the type of coverage provided (such as family coverage or employee-plus-spouse coverage). However, if requested to provide a certificate relating to a dependent, the plan must make reasonable efforts to obtain and provide the name of the dependent.
  • After the transition period (beginning July 1, 1998), a plan or issuer must make reasonable efforts to collect the necessary information for dependents and include it on the certificate. However, an automatic certificate is not required to be issued until the plan or issuer knows (or, making reasonable efforts, should know) of the dependent's cessation of coverage. This information can be collected annually, such as during an annual open enrollment.

WHAT PERIOD OF TIME DOES A CERTIFICATE COVER?

  • It depends on whether the certificate is issued automatically or upon request.
  • For a certificate that is issued automatically, the certificate should reflect the most recent period of continuous coverage.
  • For a certificate that is issued upon request, it should reflect each period of continuous coverage under the plan, ending within the 24 months prior to the date of request.

IS THERE A MODEL CERTIFICATE EMPLOYERS CAN USE?

Yes. A sample is attached, and is also issued in regulations developed by the Department of Health and Human Services that were published in the Federal Register on April 8, 1997. Copies also are available electronically on HCFA's home page at www.hcfa.gov.

WHAT IF AN INDIVIDUAL WAS NOT PROVIDED WITH A CERTIFICATE?

If an individual does not receive a certificate, a variety of proof can be used to demonstrate creditable coverage. Acceptable documentation includes: pay stubs that reflect a premium deduction, explanation of benefit forms (EOBs), a benefit termination notice from Medicare or Medicaid, and verification by a doctor or a former health care benefits provider of the individual's prior health coverage.

WHAT IF AN INDIVIDUAL LOSES THE CERTIFICATE?

  • The individual can go back and request one, free of charge.
  • The individual also can use a variety of evidence to prove creditable coverage. Acceptable documentation includes: pay stubs that reflect a coinsurance deduction, explanation of benefit forms (EOBs), a benefit termination notice from Medicare of Medicaid, and verification by a doctor or a former health care benefits provider of the individual's prior health coverage.