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Legislation and Reform

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HIPAA Certificates of Creditable Coverage

The Health Insurance Portability and Accountability Act (HIPAA) was enacted to, among other things, ensure that health insurance coverage would be portable. When moving from one employer to another, employees worried about whether the coverage from their next employer would cover their or a member of their family's illness or recurring medical condition. Insurance carriers commonly limited or excluded coverage for "preexisting conditions" for a certain period of time or sometimes exclude coverage altogether for some conditions.

To ensure continued, uninterrupted insurance coverage, HIPAA required group health plans to distribute certificates of creditable coverage when covered employees or their spouse or dependents lost coverage. The certificate was used when purchasing or obtaining new coverage to ensure uninterrupted coverage for all preexisting conditions.

The Affordable Care Act (ACA) removed the portability concern altogether by prohibiting group health plans from imposing preexisting condition exclusions for plan years beginning on or after January 1, 2014.

By eliminating preexisting condition exclusions from all group health plans, the need to distribute certificates of creditable coverage is obsolete as of January 1, 2015. Federal agencies have issued final regulations (http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/508-CMS-9949-F-OFR-Version-5-16-14.pdf) amending the HIPAA portability rules so that certificates of creditable coverage are no longer required.

Starting January 1, 2015, WageWorks will not be mailing certificates of creditable coverage to participants losing group health plan coverage.

Click here to download this update.