The Health Insurance Portability and Accountability Act (HIPAA) prohibits group health plans and group health insurance issuers from discriminating against individuals with regard to eligibility, premiums or coverage based upon a health status-related factor.

In addition, the Affordable Care Act (ACA) made a number of important changes to the HIPAA nondiscrimination provisions. Many of these ACA changes became effective for plan years beginning on or after Jan. 1, 2014. However, some ACA changes, such as the prohibition on preexisting condition exclusions for enrollees under age 19, became effective in prior years.

While the HIPAA nondiscrimination rules are not new requirements for group health plans, employers should take the opportunity to regularly review their health plans to confirm they do not violate any of the provisions within the HIPAA nondiscrimination rules, as amended by the ACA.

  1. Similarly Situated Individuals: The HIPAA nondiscrimination rules generally apply within a group of similarly situated individuals. As a general rule, employers that offer health insurance benefits to their employees may not treat individuals within a group of similarly situated individuals differently.
  2. Discrimination in Eligibility: Employers and health insurance issuers may not discriminate with respect to eligibility between similarly situated employees based upon a health factor. Eligibility rules include those related to enrollment, the effective date of coverage and eligibility for benefit packages.
  3. Discrimination in Premiums: Employers may not charge an individual within a group of similarly situated individuals a different rate for coverage based upon that individual’s health factors.
  4. Benefit Limitations: A group health plan or issuer may include benefit limitations within their health plan so long as they apply uniformly to all similarly situated individuals under the health plan.
  5. Pre-existing Condition Limitations and Exclusions: While HIPAA allowed the use of preexisting condition limitations and exclusions, it applied certain restrictions and required that the limitation or exclusion be applied uniformly to all similarly situated individuals.
  6. Actively-At-Work Provisions: An employer or issuer may not delay enrollment in the health plan until an employee is actively at work, unless individuals who are absent from work due to any health factor are treated, for purposes of health coverage, as if they are actively at work.
  7. Non-Confinement Clauses: Non-confinement clauses are most often used to allocate responsibility for coverage of individuals that are confined to a hospital at the time an employer moves its coverage from one issuer to another.
  8. Source of Jury Restrictions: An employer may not charge an employee a higher premium or deny enrollment in the health plan based upon an employee’s participation in a dangerous or hazardous activity (for example, skydiving or bungee jumping).
  9. More Favorable Treatment of Individuals: Employers and issuers are not prohibited from establishing more favorable rules for eligibility for individuals with an adverse health factor, such as a disability, than for individuals without an adverse health factor.
  10. Health Reimbursement Arrangements: Health reimbursement arrangements (HRAs) are tax-favored accounts intended to reimburse employees for medical expenses not otherwise covered by the health plan. Unused funds within an HRA may be carried over from year to year.
  11. Genetic Information: The Genetic Information Nondiscrimination Act of 2008 (GINA) included provisions related to genetic information that affect the HIPAA nondiscrimination rules.
  12. Wellness Programs: The final HIPAA regulations provided guidance on when wellness programs comply with the HIPAA nondiscrimination rules.

Note: not intended to be exhaustive, nor construed as legal advice. Readers should contact legal counsel and/or an EHD insurance professional for appropriate advice. Original content source: © Zywave, Inc. All rights reserved.