Information on The Health Insurance Portability and Accountability Act
Part 4, Chapter 12: Specialized Situations: Extending Coverage through COBRA, the Portability Act, and Conversion Options Page 6
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The Portability and Accountability Act
Although continuing a health insurance policy through COBRA can be very helpful in many situations, it may not always be the best approach. In some cases, it may be more appropriate to continue health insurance through the Portability and Accountability Act, particularly when changing jobs. The Portability and Accountability Act states that under certain conditions, an eligible individual who has been covered by health insurance can switch jobs and join a new health insurance plan without any limitations in terms of coverage for pre-existing conditions. In many cases, that may make it possible for an individual to consider changing jobs without worrying about health insurance issues.
In order to qualify for the benefits offered under the act, an individual who is in the process of changing jobs must have been enrolled in a previous employer-sponsored group health insurance plan for at least 12 months. In addition, the switch from the previous employer-sponsored group health insurance plan to the new employer-sponsored group health insurance plan must occur within 63 days. However, if the switch is from an employer-sponsored group health insurance plan to an individual policy, the individual must have been previously covered by a health insurance plan for at least 18 months. In addition, the individual must first exhaust benefits available under COBRA, Medicare, Medicaid, or other health insurance plans, before applying for an individual policy.
According to the act, if an individual continues health insurance under a previous group health insurance plan through COBRA and then transfers to an individual health insurance policy, the transfer from COBRA to the new individual policy must occur within 63 days, as well. These provisions of the Portability and Accountability Act took effect on July 1, 1997. Credit for the 12 or 18 months of prior enrollment in a health insurance plan began as of July of 1996. However, in some cases, these rules may be superseded by state laws.
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