INDIVIDUAL HEALTH COVERAGE SOLD BY PRIVATE INSURERS & HMOS

When do health plans have to sell me individual coverage?

•        Unless you are federally eligible, companies that sell individual health plans in California are free to turn you down because of your health status and other factors. When applying for individual health coverage, you may be asked questions about health conditions you have now or had in the past. Depending on your health status, carriers might refuse to sell you coverage or offer to sell you a health plan that has special limitations on what it covers.

•        Persons who are federally eligible are guaranteed the right to buy individual health plans from private insurers. However, insurers are permitted to limit your choices to two policies — either their two most popular policies or two representative policies. The two representative policies mean that you get offered one policy with a high benefit package and one with a low benefit package. Insurers that only offer one individual policy are only required to offer you that one policy.

•        In California, newborns, adopted children, and children placed for adoption are automatically covered under the parents’ individual health plan for the first 30 days, if the plan provides coverage for dependents or maternity benefits. The health plan may require that the parent enroll the child within the 30 days in order to continue coverage beyond the 30 days.

•        In California, adult dependents with physical disabilities or mental retardation are able to stay on their parents’ individual health plan after they have reached the age at which the plan usually cancels dependent coverage. In order to be eligible, the adult dependent must be incapable of self-support and must be dependent on the policyholder for support. Proof of incapacity must be provided to the health plan within 31 days of reaching the limiting age. The health plan may require that you show it proof of incapacity and dependency again in the future.

What will my individual health plan cover?

•        It depends on what you buy. California does not require health plans in the individual market to sell standardized policies. Health plans can design different policies and you will have to read and compare them carefully. California does require all individual health plans to cover certain benefits — for example, some cancer screenings. Check with the California Department of Insurance or the Department of Managed Care for more information about mandated benefits.

What about coverage for my pre-existing condition?

•        If you are federally eligible, no pre-existing condition exclusion period can be imposed on your coverage.

•        If you are not federally eligible, an individual health plan can count as pre-existing conditions only those for which you actually received (or were recommended to receive) a diagnosis, treatment or medical advice before you joined that plan. Individual health plans cannot apply a pre-existing condition exclusion period for genetic information. In addition, if enrolled within 30 days newborns, newly adopted children and children placed for adoption can avoid preexisting exclusion periods. Pregnancy can be considered a pre-existing condition.

•        The length of the look back and exclusion periods will vary based on how many people are covered by the individual policy you buy. If one or two people are covered by the policy (for example, you and your spouse; you and a child; or you alone), the health plan can look back 12 months for pre-existing conditions and then exclude those conditions for 12 months. If three or more people are covered by the policy (for example, you, your spouse, and a child; or you and two or more children), the health plan can only look back 6 months and then exclude pre-existing conditions for 6 months.

•        Individual health plans have to give you credit for your prior continuous coverage in certain circumstances. The same types of coverage that are creditable by group health plans are also considered creditable by individual health plans. Coverage is considered continuous if the gap between health plans is less than 63 days.

What can I be charged for individual health coverage?

•        If you are federally eligible, California law limits the premium you can be charged to a percentage of certain benchmark premiums. Even so, you may find that your premiums are quite expensive.

•        If you are not federally eligible, California law places few limits on what you may be charged. If you have an expensive health condition, your individual health plan premiums may be very high.

In addition, when you renew your individual health coverage, your premiums can increase as you age or your health declines.

Can my individual health plan be cancelled?

•        Your health coverage cannot be canceled because you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in the case of HMO plans, continue to live in the plan service area. Your health coverage may also be cancelled if the insurer or HMO discontinues your health plan or withdraws from the individual market.

•        Some insurers sell short-term health plans. Short-term policies are not guaranteed renewable. They will only cover you for a limited time, such as 12 months or less. If you want to renew coverage under a short-term health plan after it expires, you will have to reapply and there is no guarantee that the health plan will be-reissued at all or at the same price.

COBRA and state continuation coverage

When do I have to be offered cobra coverage?

•        To qualify for COBRA continuation coverage, you must meet 3 criteria:

First, you must work for an employer with 20 or more employees. If you work for an employer with 2-19 employees, you may qualify for state continuation coverage. (See below.)

Second, you must be covered under the employer’s group health plan as an employee or as the spouse or dependent child of an employee.

Finally, you must have a qualifying event that would cause you to lose your group health coverage.

•        Each person who is eligible for COBRA continuation can make their own decision. If your dependents were covered under your employer plan, they may independently elect COBRA coverage as well.

•        You must be notified of your COBRA rights when you join the group health plan, and again if you qualify for COBRA coverage. The notice rules are somewhat complicated and you should contact the U.S. Department of Labor for more information.

In general, if the event that qualifies you for COBRA coverage involves the death, termination, reduction in hours worked, or Medicare eligibility of a covered worker, the employer has 30 days to notify the group health plan of this event. However, if the qualifying event involves divorce or legal separation or loss of dependent status, YOU have 60 days to notify the group health plan. Once it has been notified of the qualifying event, the group health plan has 14 days to send you a notice about how to elect COBRA coverage. Each member of your family eligible for COBRA coverage then has 60 days to make this election.

Once you elect COBRA, coverage will begin retroactive to the qualifying event. You will have to pay premiums dating back to this period.

•        To qualify as federally eligible, you must choose and use up any COBRA or state continuation coverage available to you.

What will COBRA cover?

•        Your covered health benefits under COBRA will be the same as those you had before you qualified for COBRA. For example, if you had coverage for medical, hospitalization, dental, vision, and prescription drug benefits before COBRA, you can continue coverage for all of these benefits under COBRA. If these benefits were covered under more than one plan (for example, a separate health insurance and dental insurance plan) you can choose to continue coverage under any or all of the plans. Life insurance is not covered by COBRA.

If your employer changes the health benefits package after your qualifying event, you must be offered coverage identical to that available to other active employees who are covered under the plan.

What about coverage for my pre-existing condition?

•        Because your group coverage is continuing, you will not have a new pre-existing condition exclusion period under COBRA. However, if you were in the middle of a pre-existing condition exclusion period when your qualifying event occurred, you will have to finish it.

What can I be charged for cobra coverage?

•      You must pay the entire premium (employer and employee share, plus a 2% administrative fee) for COBRA continuation coverage. The first premium must be paid within 45 days of electing COBRA coverage.

•        If you elect the 11-month disability extension, the premium will increase to 150% of the total cost of coverage. See below for more information about the disability extension.

How long does COBRA coverage last?

•        COBRA coverage generally lasts up to 18 months and cannot be renewed. However, certain disabled people can opt for coverage up to 29 months, and dependents are sometimes eligible for up to 36 months of COBRA continuation coverage, depending on their qualifying event.

•        Usually, COBRA continuation coverage ends when you join a new health plan. However, if your new plan has a waiting period or a pre-existing condition exclusion period, you can keep whatever COBRA continuation coverage you have left during that period. For specifics, ask your former employer or contact the U.S. Department of Labor.

•        COBRA coverage also ends if your employer stops offering health benefits to other employees.

•        COBRA coverage might end if you are in a managed care plan that is available only to people living in a limited geographic area and you move out of that area. However, if you are eligible for COBRA and are moving out of your current health plan’s service area, your employer must provide you with the opportunity to switch to a different plan, but only if the employer already offers other plans to its employees. Examples of the other plans your employer may offer you are a managed care plan whose service area includes the area you are moving to, or another plan that does not have a limited service area.

What about Cal-COBRA coverage?

•        If your employer offers a fully insured group health plan, you may also be eligible for continuation coverage under some California laws that are similar to COBRA. Eligibility requirements for Cal-COBRA coverage are similar to those for COBRA. To get continuation coverage, you must have been gotten health benefits from an employer with 2-19 employees and you must request continuation coverage within a certain time limit. The time limits for how long you are entitled to keep Cal-COBRA are generally the same as those that apply to persons who are enrolled in COBRA. (See box above.) However, moving out of a plan’s service area terminates Cal-COBRA.

•        For persons aged 60 or older, Cal-COBRA can last up to 5 years if you worked for your employer for at least 5 years prior to seeking continuation coverage and you meet other eligibility criteria. This protection extends to persons who were enrolled in a fully insured group health plan, regardless of how many employees your former employer had. Some examples of people who may find this extended coverage helpful are early retirees and persons who are losing coverage under their spouses’ insurance because their spouses enrolled in Medicare.

•        Ask your former employer, the California Department of Insurance, or the California Department of Managed Care about Cal-COBRA coverage if you think it applies to you.

Conversion coverage

When do I have to be offered conversion coverage?

•        In some situations, such as when you lose your health coverage because your employment has been terminated or you had coverage through your spouse and lost it because of divorce, health plans are required to offer you a conversion plan. A conversion plan is an individual health policy that is not connected with the group policy that formerly covered you.

What about coverage for my pre-existing condition?

•        A conversion policy will not contain any new pre-existing condition exclusion, but you may be required to complete an unfinished pre-existing condition exclusion period from your former health coverage.

What will my individual health plan cover?

•        Your benefits under a conversion policy will probably differ from those provided by your former health coverage.

What can I be charged for conversion coverage?

•        Unlike COBRA, Cal-COBRA and HIPAA in California, conversion coverage premiums are not regulated can take into account your age and health status. You may find the rates expensive.

Can my conversion health plan be cancelled?

•        Conversion policies are renewable in the same way that other individual policies are renewable.

Major risk medical insurance program (MRMIP)

When can I get coverage from MRMIP?

•        You can buy coverage from MRMIP if

1. You are a California resident;
2. You are not eligible for Medicare Part A and Part B, unless you are eligible for both Parts because of end-stage renal disease;
3. You must not be eligible for COBRA or Cal-COBRA; and
4. You can demonstrate proof of eligibility in one of the following ways:
   1. You were turned down for individual coverage during the last 12 months;
   2. Your health coverage was involuntarily terminated during the last 12 months for reasons other than nonpayment of premiums or fraud;
   3. You were offered individual coverage during the last 12 months at a rate that exceeded the MRMIP rates; or
   4. You are a member of a group of one and have been turned down for health coverage in the last 12 months.

You only need to show that you are eligible in one of these ways in order to get MRMIP coverage.

•        MRMIP offers family coverage, so if one person in your family qualifies, your entire family can get MRMIP coverage.

•        MRMIP sometimes stops enrolling new members when it reaches an enrollment cap. Applications are still accepted when enrollment has temporarily stopped. When enrollment begins again, people are admitted to MRMIP in the order that their applications were received.

•        If you move to a new area in California outside of your current MRMIP plan’s service area, you are guaranteed the right to join a MRMIP plan that serves that area.

•        If you have had problems establishing a good relationship with a provider or a plan, you may request permission from MRMIP to join a different MRMIP plan.

What will the MRMIP cover?

•        MRMIP coverage includes hospital and physician care, maternity services, prescription drugs, treatment for serious mental health illness, and other services. HMO and PPO plans are available from the different companies that participate in the program. Deductible and co-payment requirements vary, but all MRMIP plans have an out-of-pocket maximum of $2,500 for individuals and $4,000 for families. MRMIP plans will pay up to $75,000 in benefits per calendar year and $750,000 in a lifetime.

What about coverage for my pre-existing condition?

•        When you enroll in a MRMIP PPO plan, the plan will count as pre-existing conditions only those for which you actually received (or were recommended to receive) a diagnosis, treatment or medical advice within the 6 months immediately before you joined that plan. The PPO plan is allowed to exclude your pre-existing condition for 90 days.

•        When you enroll in a MRMIP HMO plan, you will face a 90-day affiliation period. During this time you will not be eligible for health care services and you will not be charged any premium in addition to the premium you submitted with your MRMIP application. At the end of the 90 days, your pre-existing conditions will be covered.

•        In some circumstances, your pre-existing condition period or your affiliation period may be waived if:

1. You have been on the MRMIP waiting list for longer than 6 months. In this case, the pre-existing condition exclusion period or affiliation period is completely waived.
2. You were covered by other health insurance for at least 90 days when you applied to MRMIP. In this case, the pre-existing condition exclusion period or affiliation period is completely waived.
3. You had been covered by other health insurance, but you lost it and you applied to MRMIP within 62 days. If you had 90 days of coverage, then the pre-existing condition exclusion period or affiliation period is completely waived. If you had 30 to 89 days of prior coverage, then the pre-existing condition exclusion period or affiliation period will last either 30 or 60 days.
4. You had been covered under the high risk pool of another state sometime during the past year. In this case, the pre-existing condition exclusion period or affiliation period is completely waived.

What can I be charged for MRMIP coverage?

•        Premiums will vary based on the health plan you choose, your age, and where you live. Contact MRMIP for a brochure listing all coverage options and the most current premiums.

How long does MRMIP coverage last?

•        Coverage under the MRMIP is renewable as long as you pay your premiums, continue to reside in California, and meet other eligibility requirements. If you cancel your MRMIP coverage, you will not be able to reapply for coverage under MRMIP for 12 months.