HIPAA
As used herein the term "Company"refers to HM Life Insurance Company, HM Life Insurance Company of New York and HM Benefits Administrators, as applicable.
HIPAA Overview
What is HIPAA?
HIPAA is an acronym for the Health Insurance Portability and Accountability Act of 1996. HIPAA was established within the Clinton administration's health care reform policy and was enacted to provide better access to health insurance, limit fraud and abuse and reduce administrative costs.
You may hear people refer to "HIPAA" as if it is a single program or project. It's actually a complex legislative act of the federal government, organized into several key titles or sections (click here to see how the legislation is organized).
- Health insurers
- Doctors
- Hospitals
- Employers who provide health insurance
- Life insurers
- Anyone who uses health care or health insurance
- Public health authorities
- Billing agencies
- Information system vendors
- Health service organizations
What will HIPAA change?
HIPAA is an extensive law made up of five titles with many complexities. Numerous regulations are still under development and are not final.
The four main areas of focus are administrative simplification, fraud and abuse, insurance reform and HIPAA companion legislation.
Administrative simplification
Administrative simplification is broken down into several sections.
- Electronic health transaction standards and code sets – The implementation of a national standard for transmitting health data electronically and the use of standard code sets that describe diseases, injuries and other health problems.
- Unique identifiers* – A system that uses one identification number per employer, health plan or payer and health care provider to simplify administration.
- Security – The safeguard for the storage, access and transmission of patient information.
- Privacy – Generally limits the use or disclosure of protected health information to a minimum necessary standard and also gives patients the right to see and get copies of their records, request amendments to their records and learn details of certain disclosures of their records.
*Denotes a proposed rule which may vary from its original specifications and is not yet final.
Fraud and abuse
Another issue on the forefront is the reduction of fraud and abuse. HIPAA created the Health Care Fraud and Abuse Control Program, a far-reaching program to combat fraud and abuse in health care, including both public and private health plans. This program is under the joint direction of the attorney general and the Secretary of the Department of Health and Human Services (HHS). It is designed to coordinate federal, state and local law enforcement activities with respect to health care fraud and abuse.
Our Company is also actively involved in investigating health insurance fraud.
Insurance reform
Six insurance reform provisions make health insurance easily accessible and portable. These provisions are already in effect at our Company.
- Certificates of creditable coverage – If you change jobs or lose your health coverage, your previous employer or insurance company is required to issue you a certificate. This certificate will provide evidence of your prior coverage, which can be applied to any pre-existing condition waiting period on your new health insurance.
- Pre-existing conditions and waiting periods – A maximum 12-month waiting period (18 months for late enrollees) for coverage for any pre-existing condition for which medical advice, diagnosis, care or treatment has been received or recommended within the past six months.
- Breaks in coverage – More than 63 days of not carrying insurance is considered a significant break in coverage. If this occurs, you will not be eligible to reduce a pre-existing condition waiting period with creditable coverage.
- Special enrollment provision – Allows immediate enrollment into your employer's health insurance plan if you lose other (i.e., spouse's) coverage or if there is an addition to the family.
- Availability and renewability of health insurance coverage – Health plans cannot base enrollment on health status.
- Pre-emption provisions – The HIPAA federal regulations will replace existing state laws. However, if a state already has a law that meets or exceeds HIPAA regulations, the state law will remain in effect.
HIPAA companion legislation
The following HIPAA companion legislation increases specific health benefits:
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The Women's Health and Cancer Rights Act of 1998 (WHCRA) applies to group plans and self-insured plans. It states that if your insurance covers a mastectomy, then it must also cover breast reconstruction. WHCRA does not, however, require health plans to cover mastectomies.
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The Newborn's and Mother's Health Protection Act of 1996 (NMHPA) applies to group plans and self-insured plans. It states that if your health plan covers hospital stays following childbirth, they must cover a 48-hour stay for vaginal delivery and 96-hours following a cesarean section delivery.
Your health plan does not have to cover the full 48-hour (or 96-hour) period if your physician speaks with you and determines you or your child can be discharged earlier.
NMHPA does not, however, require health plans to cover hospital stays in connection with childbirth. -
The Mental Health Parity Act of 1996 (MHPA) applies to group plans with more than 50 workers. It states that if your plan covers mental health, the dollar limit on those benefits cannot be less than the limit on medical and surgical benefits. MHPA does not, however, require health plans to cover mental health.
Update: On Dec. 19, 2003, President Bush signed into law the Mental Health Parity Reauthorization Act of 2003 (Public Law 108-197). This law amends the Employee Retirement Income Security Act of 1974 and the Public Health Service Act to extend the mental health benefits parity provisions through Dec. 31, 2004.
Other HIPAA regulations
HIPAA contains additional regulations in three more sections of the law.
- A government regulation that standardizes the amount you can save per person in a pre-tax medical savings account
- Broadened information on insurance reform provisions and detailed explanations
- Regulations on how employers can deduct company-owned life insurance premiums for income tax purposes
For more information on these regulations, click here.
Contact us
If you need more information or have questions regarding HIPAA at our Company, contact us online at hipaaedi@hmbenadmin.com, call (800) 245-2541 or send a fax to 412-544-1246.
