Group Health Plans and Pre-Existing Conditions in California:

Pre-existing conditions have caused some of the worst insurance battles in history. Advocates for people with pre-existing conditions have worked hard to ensure that these people will still be able to find health coverage, without their pre-existing condition causing them to pay more for their premiums or face denial of coverage.

Currently, there are specific laws in place to protect employees under group health plans that have a pre-existing condition. Let's take a look at what this means for your employees in California.

What Counts As a Pre-Existing Condition?

The majority of health insurance companies are now defining a pre-existing condition as a condition that an employee was diagnosed with, treated for or had medical advice concerning the condition six months prior to beginning coverage under a group health plan. This is also known as a "look back" plan.

This definition springs from a method some insurance companies use when an employee files a claim for an illness or disease. They will "look back" over the past six months before coverage began to determine if the condition was pre-existing.

How is Genetic Information Used to Determine a Pre-Existing Condition?

Insurance companies are now making use of genetic information and factors to determine if policyholders are at risk for developing specific diseases. In California, an insurance company may not use genetic information as a basis for a pre-existing condition exclusion period. This means that an insurance company cannot deny or limit your employee's coverage for a pre-existing condition using genetic information.

Can an Insurance Company Use Exclusion Periods for Pre-Existing Conditions?

In California, an insurance company may limit coverage for a specific amount of time for a pre-existing condition. Once this time period has elapsed, they are no longer able to limit the coverage for an employee in a group health plan. This means that if an employee has a pre-existing condition that has triggered a one year exclusion period, an insurance company must provide coverage for this condition after the one year period has elapsed.

How Can Enrolling Late Affect and Employee's Status if They Have a Pre-Existing Condition?

If an employee has a pre-existing condition and they enroll late into your group health plan, this may mean that their exclusion period will be longer. You can avoid this by encouraging your employees to sign up during a special enrollment period, or when you first begin your group health plan. Make sure to educate your employees on the risks they face with a longer exclusion period if they do not enroll promptly.

Does an Insurance Company Have to Give an Employee Credit for Continuous Creditable Coverage if They Have a Pre-existing Condition?

If a group health plan requires an exclusion period for a pre-existing condition, an employee must be given credit for previous continuous creditable coverage that they may have had with another insurance company. Creditable coverage is usually determined as being a private or government sponsored health plan. This means that the exclusion period for this employee will generally be shorter than if they did not have previous continuous creditable coverage.

Can a Pre-Existing Condition Affect Prescription Drug Coverage?

In many cases, there may be a six-month exclusion period for an employee with a pre-existing condition who requires medication to treat this condition. Even if the employee had previous continuous creditable coverage, if it did not include a prescription drug benefit, they will need to wait for the exclusion period to elapse before their prescription drug benefits will kick in. This only counts for medicine that is needed to treat a pre-existing condition. If an employee needs medication that is not related to their pre-existing condition, they will have immediate full coverage.

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