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Will my family's coverage be hurt by my job change?

Consumer Reports News: July 27, 2011 11:38 AM

Q. I am considering changing jobs but am concerned about insurance coverage for pre-existing conditions. My son had a transplant, I had a pituitary tumor, and my husband had open-heart surgery. If I change jobs and insurance, is the new insurance required to cover us?

A. It most certainly is, thanks to a federal law called the Health Insurance Portability and Accountability Act of 1996, commonly known as HIPAA.

This law makes it illegal for group health plans to deny coverage to employees (and their dependents, if the group health plan offers dependent coverage) on the basis of pre-existing conditions. And they cannot charge you more for your premium contribution than any other employee.

A couple of things to keep in mind:

You must start your new health plan within 63 days of leaving your old one. If you wait longer than that (and from what you’ve said it sounds like that’s the last thing you’d want to do), the plan is allowed to exclude your pre-existing conditions for up to 12 months.

If you’ve had your current coverage for less than 12 months, even if you join the new plan within the time limit, the plan would be allowed to exclude your pre-existing conditions for a period of time. But you would get a month’s credit against the exclusion period for every month you had coverage. So, for instance, if you had coverage at your old job for five months, the exclusion period would be cut to seven months.

If your new employee plan makes all new hires wait several months before their coverage kicks in, you’ll have to observe the same waiting period. In that case, you should sign up for COBRA from your old job to see you through the transition.

The U.S. Department of Labor, which administers the HIPAA law, has a useful page of FAQs where you can find lots more information.

Nancy Metcalf

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