- Health Benefits Advisor for Employers
Determining Compliance with the HIPAA Provisions in Part 7 of ERISA
Compliance with the Certificate of Creditable Coverage Provisions
Regardless of whether the plan imposes a preexisting condition exclusion, the plan is required to issue certificates of creditable coverage when coverage ceases and upon request.
To be complete, under 29 CFR 2590.701-5(a)(3)(ii), each certificate must include:
- Date issued;
- Name of plan;
- The individual's name and identification information (**Note: Dependent information can be included on the same certificate with the participant information or on a separate certificate. The plan is required to have used reasonable efforts to get dependent information. See 29 CFR 2590.701-5(a)(5)(i));
- Plan administrator name, address, and telephone number;
- Telephone number for further information (if different);
- Individual's creditable coverage information:
- Either: (1) that the individual has at least 18 months of creditable coverage; or (2) the date any waiting period (or affiliation period) began and the date creditable coverage began.
- Also, either: (1) the date creditable coverage ended; or (2) that creditable coverage is continuing.
- Automatic certificates of creditable coverage should reflect the last period of continuous coverage.
- Requested certificates should reflect periods of continuous coverage that an individual had in the 24 months prior to the date of the request (up to 18 months of creditable coverage). See 29 CFR 2590.701-5(a)(3)(iii).
- An educational statement regarding HIPAA, which explains:
- The restrictions on the ability of a plan or issuer to impose a preexisting condition exclusion (including an individual's ability to reduce a preexisting condition exclusion by creditable coverage);
- Special enrollment rights;
- The prohibitions against discrimination based on any health factor;
- The right to individual health coverage;
- The fact that State law may require issuers to provide additional protections to individuals in that State; and
- Where to get more information.
Tips: Remember to include information about waiting periods and dependents. If a plan imposes a waiting period, the date the waiting period began is required to be reflected on the certificate. In addition, if the certificate applies to more than one person (such as a participant and dependents), the dependents' creditable coverage information is required to be reflected on the certificate (or the plan can issue a separate certificate to each dependent). (**Note: If a dependent's last known address is different from the participant's last known address, a separate certificate is required to be provided to the dependent at the dependent's last known address.) A model notice is provided by EBSA.
** Special Accountability Rule for Insured Plans:
Under a special accountability rule in ERISA section 701(e)(1)(C) and 29 CFR 2590.701-5(a)(1)(iii), a health insurance issuer, rather than the plan, may be responsible for providing certificates of creditable coverage by virtue of an agreement between the two that makes the issuer responsible. In this case, the issuer, but not the plan, violates the certificate requirements of section 701(e) if a certificate is not provided in compliance with these rules. (**Note: An agreement with a third-party administrator (TPA) that is not insuring benefits will not transfer responsibility from the plan.)
Despite this special accountability rule, other responsibilities, such as a plan administrator's duty to monitor compliance with a contract, remain unaffected.
Accordingly, this section of the elaws Health Benefits Advisor for Employers is organized to take into account this special accountability rule.