For many years, in the individual health insurance industry, there have been companies saying that they would put you in a group for $20 per month or $50 per month or $10 per month, and that group protected you from getting cancelled if you were to get sick.
When the politicians were pushing the Affordable Care Act, we again heard them saying if we pass this law, insurance companies will no longer be able to cancel you just because you get sick.
I must refer everyone to section 2742 of the Health Insurance Portability and Accountability Act. This law by the way went into effect in 1996.
`SEC. 2742. GUARANTEED <> RENEWABILITY
OF INDIVIDUAL HEALTH INSURANCE
COVERAGE.
“(a) In General.–Except as provided in this section, a health
insurance issuer that provides individual health insurance coverage to
an individual shall renew or continue in force such coverage at the
option of the individual.
“(b) General Exceptions.–A health insurance issuer may non-renew or
discontinue health insurance coverage of an individual in the individual
market based only on one or more of the following:
“(1) Nonpayment of premiums.–The individual has failed to
pay premiums or contributions in accordance with the terms of
the health insurance coverage or the issuer has not received
timely premium payments.
“(2) Fraud.–The individual has performed an act or
practice that constitutes fraud or made an intentional
misrepresentation of material fact under the terms of the
coverage.
“(3) Termination of plan.–The issuer is ceasing to offer
coverage in the individual market in accordance with subsection
(c) and applicable State law.
“(4) Movement outside service area.–In the case of a
health insurance issuer that offers health insurance coverage in
the market through a network plan, the individual no longer
resides, lives, or works in the service area (or in an area for
which the issuer is authorized to do business) but only if such
coverage is terminated under this paragraph uniformly without
regard to any health status-related factor of covered
individuals.
“(5) Association membership ceases.–In the case of health
insurance coverage that is made available in the individual
market only through one or more bona fide associations, the
membership of the individual in the association (on the basis of
which the coverage is provided) ceases but only if such coverage
is terminated under this paragraph uniformly without regard to
any health status-related factor of covered individuals.
As you see in the document, first it says Guaranteed Renewability of Health insurance. The only thing it states about these so called Association plans is that if you are in one you must maintain the membership in the association. It does not protect you from being cancelled if you get sick, as you also says multiple time “coverage is terminated under this paragraph uniformly without regard to any health status- related factor of covered individuals”
Why am I back on the HIPAA kick again?? I was talking to a prospective client last week, and they decided to go with another broker because he was going to put them in a group so she could not be cancelled.
Cancelling her was illegal under HIPAA in 1996 and is illegal under the PPACA in 2014.
Thanks for reading.
Eric Wilson is President of I Sell Health, Inc., a Chicago area insurance agency. He has been cited nationally on ABC, CBS, NBC, FOX and CNN