When you leave a job and lose or change your coverage, it's essential that you have proof of your previous coverage. You will be covered under the Health Insurance Portability and Accountability Act (HIPAA) that was enacted by Congress in 1996, but you must have proof – a letter from your previous insurance agency and a copy of your insurance card. If you don't keep track of this important information, frustration and complications can result. Consider the following dilemma.
The situation
Our client, Ian – who worked for a nonprofit in Washington, D.C. from December 2007 through the end of June 2008 – never thought about tracking the insurance he had from his employer and was surprised when he was required to provide his new insurer with proof of coverage. When he took another job in 2009 and applied for health insurance coverage, he called his old insurance company only to find there was no record of his previous coverage – and that's when he called us.
Ian is not alone. When we receive applications for new hires, most people fail to complete this section. Without proof of prior coverage, and if you are applying for coverage with a PPO, it is assumed you have a pre-existing condition. This usually results in a waiting period, which might become a barrier to getting insurance, especially if you have a pre-existing limitation.
If you don't have proof of coverage and select an HMO, you are not subject to a waiting period – but only if you enroll in a timely fashion. Be aware that there are employers who do not offer an HMO – and again, you would be considered as having a pre-existing limitation.
Also, if you fail to complete the application in full and you have a "qualifying event," it could result in not being able get into the plan you desire.
A qualifying event includes death, divorce, legal separation of the employee, termination from employment for a reason other than gross misconduct, reduction in working hours, and the change in the status of a child who ceases to be classified as a dependent under the terms of the plan. Of course, an employee is entitled to notice of the right to continuation after a qualifying event occurs.
In Ian's case, we called his previous employer, who put us in touch with their broker. Eventually, we got to the bottom of it and found Ian's original application. He now has coverage through his new employer.
