Your Protections When Buying Health Insurance

Health Plan Coverage - Protection to Consumers in the Commonwealth of Virginia

Many unemployed persons or self-employed individuals desire to obtain health insurance; yet are unsure of heir options and what is entailed. And in Virginia, (as is equally true within most states), individuals have limited guaranteed access to individual health insurance. Hence it is important for consumers to carefully consider all their option when seeking to purchase coverage under a health plan.

There are some alternatives to individual health insurance coverage - such as COBRA and state continuation coverage.

In Virginia, oneýs ability to purchase independent health insurance is directly correlative with the status of their health. However, there do exist extenuating circumstances in which regardless of an individualýs health, he/ she may not be denied coverage.

The general rules governing health insurance in Virginia include:

Viriginia-based companies which sell individual health insurance policies has the authority to deny coverage to anyone whom they deem to be in poor health or for other applicable reasons. Or insurance companies may offer a policy with special clauses stipulating limitations placed on coverage.

A marked distinction, Trigon Blue Cross Blue Shield (provides coverage within Virginia outside of the stateýs Northern region) and Care First Blue Cross (representative for Northern Virginia) Blue Shield sell individual health insurance to any resident of Virginia who wants it. Note of caution ,however, the premiums for these policies often tend to reflect the perceived degree of risk involved.

For those who qualify as "federally eligible", by law, private insurers are not allowed to deny coverage or access to purchase any of the individual products they sell. Furthermore, policies sold to persons deemed ýfederally eligibleý are barred from imposing pre-existing condition exclusion periods also known as elimination riders. Yet, the deciding factor, is the price one must pay to receive such unregulated coverage, for there are no pre-set limits within the pricing realm

Note of distinction: Insurance companies within the Commonwealth of Virginia are required to sell individual products to those of federally eligible status, they are not bound by the same obligations whereas family coverage is concerned. However, they must be sure to offer all ýfederally eligibleý family members a separate individual policy. Though not required, the majority of insurance companies, upon request, will make family coverage an available option.

To be federally eligible, you must meet certain criteria

If you are federally eligible you are guaranteed the right to buy an individual health plan and are exempted from pre-existing condition exclusion periods. However, to be deemed ýfederally eligible,ý you must meet all of the following qualifications:

Have had 18 months of continuous creditable coverage, a minimum of which entailed the last day being covered under a group health plan.

Have extinguished any remaining COBRA or state continuation coverage for which deemed eligible.

- Not be eligible for Medicare, Medicaid or any group health plan.

- Presently, must not ZERO health insurance. (Note, you can apply for federally eligible coverage at the tail end of oneýs term within a group policy.

- Must apply for health insurance for which one meets the federal qualifications i.e. is federally eligible, within 63 days of losing existing coverage.

Federal eligibility ends when you enroll in an individual plan, because the last day of your continuous health coverage must have been in a group plan. You can become federally eligible again by maintaining continuous coverage and rejoining a group health plan.

Note: In Virginia, with regard to newborns, adopted children, and children placed for adoption; for the initial 31 days, all are automatically covered under the parentsý individual health plan. The one stipulation is that the parentsý plans must cover dependents.

Beyond the first 31 days, insurers suggest parents enroll their children in their own plans in order to ensure continued coverage.

Also encapsulated under Virginia law are special provisions regarding physically disabled or mentally retarded adults who qualify as dependents under their parentsý plans.

By law, such challenged adults may stay on their parentsý plans beyond the normal acceptable period. However, in order to qualify, adults whom are dependent must be completely incapable of supporting themselves and, therefore, 100 percent dependent on the policy holder for financial support. To verify the state of the disabled adultýs condition, the insurer must receive proof of incapacity within 31 days of he \ she exceeding the age barrier (usually age 21) stipulated under the policy.

Precisely, what is covered by an individual health plan?

The Commonwealth of Virginia does not require health insurers to sell standardized individual policies. Rather, as policies can incorporate different benefits and coverage areas, it is up to the purchaser to review each policy and compare with others on the market.

However, there are select benefits that the Commonwealth of Virginia does require all health plans to cover such as mammograms and postpartum care.

(Check with the Virginia Bureau of Insurance for more information about mandated benefits.)

Will I find it difficult to obtain coverage given the fact I have a pre-existing condition?

In all honesty, it may be more difficult to purchase a health insurance policy given the fact that one has a pre-existing condition.

However, if are approved for an individual health plan, the Commonwealth of Virginia does regulate the time limits that insurers can impose upon pre-existing condition exclusionary periods. For example, insurers can not impose a Pre-existing condition exclusionary period beyond a 12 month period.

The Prudent Person Rule stipulates that, by law, individual health plans can review a personýs medical record for the previous 12 months to detect whether they were receiving care or treatment for a particular ailment. In addition, potential insurers can also assess whether you have had any malingering conditions for which they feel one should have received care. Note: In the Commonwealth of Virginia, with respect to individual health plans, pregnancy can be considered a pre-existing condition. However, in the absence of a diagnosis, genetic DNA information i.e. malformations with the baby cannot be considered a pre-existing condition.

Should there be a break in coverage of 30 days or less, policy holders will still get credit for having had continuous coverage. In these instances, if the insurance was from an individual or group policy that provided hospital, medical, and surgical or major medical coverage, then prior coverage will still be credited.

Overall, individual health plans do have the authority to impose elimination riders on an individualýs health insurance contract. An elimination rider will, for personsý entire lifetime, exclude coverage for a health condition, body part, or body system.

Note: Should the insurance company either not get overly detailed or glaze over the process when the individual fills-out the initial (simplified) application, then the insurer is unable to go back and impose an elimination rider on the coverage the company already approved to provide.

And for those who meet the qualifications of being federally eligible. insurance carries can not impose pre-existing condition exclusionary periods or elimination riders.

Does the State regulate what insurance carries can charge for individual health coverage?

No, the Commonwealth of Virginia doe not control what health insurance companies can and can not charge to individuals. Hence, if you have a medical | health condition that is more serious or cost intensive, carriers can take this into account when determining your regular premium charges.

Also, it is important to financially plan for the fact that when the time comes to renew a policy, as oneýs age will have progressed and condition, often times, deteriorated, that the premiums will reflect an adjusted increase.

By law, does the carrier have a right to cancel my health insurance policy?

Guaranteed renewability ensures that an individualýs coverage may not be canceled on account of illness that arrives after enrollment in the plan. This is the protection one receives so long as he\she regularly pays their premiums, does not defraud their carries and, in the case of managed care plans, remains living within the planýs established service area.

However, an important distinction needs to be made between full-term policies and those considered to be short-term. As short-term policies only are able to provide coverage for limited periods, they are not guaranteed renewable. At the time of expiration, should an individual desire to renew coverage under a short-term policy, he \ she must reapply and there is no guarantee that the company will re-issue coverage and if they do, that it will be at the same rate and provide equal amounts of coverage.

Consumer Insurance Protection within the Commonwealth of Virginia

Laws designed to regulate insurance companies, as drafted and expedited by the General Assembly of Virginia:

ý         Insurance companies may not employ discriminatory practices with regard to the rates they charge or type of coverage they make available to consumers.

ý         Insurance companies are obligated to make life and health insurance pay-outs in a swift and egalitarian manner.

ý         Insurance companies are not permitted to cancel, refuse to renew or deny at the onset life insurance policies on the lives of US military personnel based upon status within a related organization or imminent danger associated with a particular mission to he/she is assigned.  

ý         Consumers have a right to review personal information insurance companies have collected and reports they have generated as part of the process of determining eligibility for coverage and| or determination of an adverse underwriting decision*.

Should one apply for insurance and be refused, by law, the insurance is mandated to explain why or state, upon receipt of written request, they will provide reason(s).

With regard to consumer rights, some exceptions do exist, for example in cases of fraud.

*Note: An Adverse Underwriting Decision is a determination made by an insurance company or agent to:

ý         Refuse coverage

ý         Terminate coverage,

ý         Offer coverage different from that for which one initially applied.

Offer identical coverage desired at a higher premium rate than was initially quoted at the application time.