Will HIPAA's Model Certificate of Creditable Coverage Be Revised

September 22, 1999
According to a recent report from the Government Accounting Offices (GAO), implementing the Health Insurance Portability and Accountability Act of 1996 (HIPAA) has proceeded fairly smoothly in the large-employer market. But one area of concern cited by the GAO is the model certificate of creditable coverage jointly issued by the Department of Labor (DOL), IRS and Department of Health and Human Services, which is used by many employers to inform health plan participants of their rights. According to the GAO, the model certificates do little to explain some of the key concepts of the law. Therefore, the GAO is recommending that the three federal agencies amend the model certificate when final regulations are released.

Areas of concern.
According to the GAO, the model certificates are deficient in several areas. For example, the certificate fails to inform participants that once they leave the group market:

  • They may have a right to obtain health insurance in the individual market.
  • If they accept other employment, they might not have to fulfill a preexisting condition period under the new employer's group health plan.

The GAO has made several recommendations for retooling the certificate to better educate the health plan consumer, and the DOL and the Health Care Financing Administration have generally agreed with the GAO's recommendations. Therefore, it wouldn't be surprising to see some changes in the model certificate when final regulations are released. (Currently, the GAO notes that officials expect to finalize HIPAA regulations in 2000.)

What should employers do?
Employers wishing to stay ahead of the game should consider revising their certificates to incorporate some of the GAO's recommendations. Specifically, the GAO recommends that the following information be highlighted:

  • The rules relating to preexisting conditions and the guaranteed renewability of health coverage.
  • The prohibition against discrimination against an insured on the basis of that individual's health status.
  • The right to guaranteed access to insurance for individuals losing group coverage.

In addition, the GAO strongly recommends that the certificates inform participants whom they should contact for further information about their rights under HIPAA. Adding this information to the certificate should take plan administrators little time and, in the long run, may actually save time, since employees will be better informed and may have less need to contact plan administrators for further information after employment is terminated.

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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.