Federal Regulations
Several federal laws regulate group health insurance. Understanding these laws is essential for insurance professionals and employers.
COBRA (Consolidated Omnibus Budget Reconciliation Act)
COBRA requires continuation coverage for employees and dependents who lose group health coverage.
COBRA Applicability
| Requirement | Standard |
|---|
| Employer size | 20 or more employees |
| Plan types | Medical, dental, vision |
| Who's covered | Employees, spouses, dependents |
| Government plans | Covered under similar rules |
Qualifying Events and Durations
| Event | Who Qualifies | Duration |
|---|
| Termination (not gross misconduct) | Employee, spouse, children | 18 months |
| Reduction in hours | Employee, spouse, children | 18 months |
| Employee's Medicare entitlement | Spouse, children | 36 months |
| Divorce or legal separation | Spouse, children | 36 months |
| Death of employee | Spouse, children | 36 months |
| Child loses dependent status | Child | 36 months |
COBRA Administration
| Requirement | Timeframe |
|---|
| General notice | At plan enrollment |
| Qualifying event notice | Within 14 days (employer to plan) |
| Election notice | Within 14 days (plan to beneficiary) |
| Election period | 60 days from notice or coverage loss |
| First premium | 45 days from election |
COBRA Premium
| Component | Standard |
|---|
| Maximum | 102% of full premium cost |
| Disability extension | 150% during 11-month extension |
| Payment | Monthly |
| Grace period | 30 days |
Exam Tip: COBRA premium is 102% (100% + 2% admin fee). If disabled during first 60 days, 11-month extension is available at 150%.
HIPAA (Health Insurance Portability and Accountability Act)
HIPAA has two major components relevant to group health insurance:
Portability Provisions
| Protection | Description |
|---|
| Special enrollment | Rights when losing other coverage, marriage, birth |
| Creditable coverage | Prior coverage reduces exclusion periods |
| Limitation on exclusions | Pre-existing condition exclusions limited |
| Certificate of coverage | Documentation of prior coverage |
Privacy Provisions (Privacy Rule)
| Requirement | Description |
|---|
| PHI protection | Protected Health Information safeguarded |
| Patient rights | Access, amend, accounting of disclosures |
| Covered entities | Health plans, providers, clearinghouses |
| Business associates | Must have agreements in place |
| Penalties | Civil and criminal penalties for violations |
Security Rule
| Requirement | Description |
|---|
| Administrative safeguards | Policies, training, access controls |
| Physical safeguards | Facility security, workstation security |
| Technical safeguards | Encryption, audit controls |
ERISA (Employee Retirement Income Security Act)
ERISA governs most private employer benefit plans:
ERISA Requirements
| Requirement | Description |
|---|
| Reporting | Annual Form 5500 filing |
| Disclosure | Summary Plan Description (SPD) |
| Fiduciary duties | Prudent management of plan assets |
| Claims procedures | Specific timelines and requirements |
| Appeals | Right to appeal denied claims |
ERISA Preemption
| Exempt from State Law | Subject to State Law |
|---|
| Self-funded employer plans | Fully insured employer plans |
| Plan design | Insurer regulation |
| Benefits offered | Policy terms |
| Eligibility rules | Provider mandates |
Key Point: ERISA preemption means self-funded plans are not subject to state insurance laws, but fully insured plans are.
Summary Plan Description (SPD)
| Required Content | Description |
|---|
| Plan name and type | Identification |
| Eligibility | Who can participate |
| Benefits | What's covered |
| Claims procedures | How to file |
| COBRA rights | Continuation information |
| Contact information | Plan administrator |
Mental Health Parity and Addiction Equity Act (MHPAEA)
Requires equal treatment of mental health and substance use disorder benefits:
Parity Requirements
| Area | Requirement |
|---|
| Financial requirements | Same deductibles, copays, coinsurance |
| Treatment limitations | Same day/visit limits |
| Annual/lifetime limits | Same as medical/surgical |
| Out-of-pocket limits | Combined with medical |
| NQTLs | Non-quantitative limits must be comparable |
Non-Quantitative Treatment Limitations (NQTLs)
| NQTL Type | Parity Requirement |
|---|
| Prior authorization | Must apply consistently |
| Medical necessity | Same criteria |
| Provider network | Comparable access |
| Prescription formulary | Similar placement |
| Step therapy | Equivalent requirements |
Newborns' and Mothers' Health Protection Act
Mandates minimum hospital stays for childbirth:
| Type of Delivery | Minimum Stay |
|---|
| Vaginal delivery | 48 hours |
| Cesarean section | 96 hours |
Key Provisions
- Cannot require shorter stays
- Cannot offer incentives for early discharge
- Cannot require preauthorization for minimum stay
- Decision remains with attending provider and mother
Women's Health and Cancer Rights Act
Requires coverage for breast reconstruction after mastectomy:
Required Coverage
| Service | Requirement |
|---|
| Breast reconstruction | Must be covered |
| Surgery on other breast | Symmetry procedures |
| Prostheses | Must be covered |
| Complications | Including lymphedemas |
Notification
Employers must provide written notice of these benefits:
- At enrollment
- Annually thereafter
Genetic Information Nondiscrimination Act (GINA)
Prohibits discrimination based on genetic information:
GINA Prohibitions
| Prohibited Action | Description |
|---|
| Underwriting | Cannot use genetic information |
| Premium rating | Cannot charge more based on genetics |
| Requesting tests | Cannot require genetic testing |
| Purchasing information | Cannot buy genetic information |
What is Genetic Information?
| Included | Not Included |
|---|
| Genetic test results | Current health status |
| Family medical history | Age |
| Genetic services | Gender |
| Participation in research | Lifestyle factors |
Summary of Federal Laws
| Law | Primary Focus |
|---|
| COBRA | Continuation coverage |
| HIPAA | Portability, privacy, security |
| ERISA | Plan administration, fiduciary duties |
| MHPAEA | Mental health parity |
| Newborns' Act | Minimum maternity stays |
| WHCRA | Breast reconstruction coverage |
| GINA | Genetic nondiscrimination |
| ACA | Coverage mandates, exchanges, essential benefits |