|
X-Ell Employee Benefits, LLC |
|
Portability |
|
NJ Small Employer (2-50) Reform Law Summary |
|
Portability is a standard
feature under Reform. Portability basically addresses an employee's seamless
coverage when moving between plans, employers, or carriers. The time served
under previous health plan coverage can be used to offset the pre-existing condition
waiting periods imposed by the new carrier or group plan (if applicable).
Prior coverage that would qualify in crediting the pre-existing condition
penalty period would be: · Federally funded health benefits such as Medicare and
Medicaid · Any group or individual health contract issued by an
insurance company or corporation offering health, hospital or medical
services · Group or individual HMO (health maintenance organization)
coverage · Employer-based or self funded plan insurance plan · Coverage provided by Federal or State continuation
provisions such as COBRA or New Jersey State Continuation of Coverage The following coverage types are
not valid for credit: specified disease only, accident only, credit,
disability, long-term care, Medicare supplement, dental only, prescription
only, vision only, supplemental liability, stop loss or excess risk, worker's
compensation, hospital only, automobile related medical or personal injury
(PIP) or other supplemental limited benefits. The portability provisions allow
an individual up to a 90-day lapse in coverage, prior to becoming effective
under the new employer's plan, without penalty. In other words, if an individual had
previous health insurance coverage and canceled or lapsed that coverage, they
would have 90 days to enroll under a new health plan without being penalized
for that break in coverage. The
previous coverage would have had to been in place continuously for at least 6
months for no pre-existing condition penalties to apply. Again, any time served under that prior
coverage could be used to offset the waiting period under the new health
plan, partially, or for the full 6 months. The Health Insurance Portability
and Accountability Act of 1996 also set forth a number of guidelines that
affect portability of coverage. We
won’t get into all of the details here since New Jersey law already incorporated
a number of the requirements under this Act.
However, it’s worth noting that the Act did establish the requirement
for carriers to provide proof of prior coverage for any terminated employee
that was covered under the carrier’s sponsored health plan. This proof of coverage—called a
“Certificate of Creditable Coverage”- must be mailed by the carrier to any
employee that is terminated from the employer’s group health plan. The letter verifies the employee’s coverage
period, covered dependents, and policy/group number. |
|
1680 Route 23 North, Suite 310, Wayne, NJ 07470 |