Internal Revenue Code:Sec. 9801. Increased portability through limitation on preexisting condition exclusions
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle K - Group Health Plan Requirements
CHAPTER 100 - GROUP HEALTH PLAN REQUIREMENTS
Subchapter A - Requirements Relating to Portability, Access, and
Renewability
Statute
Sec. 9801. Increased portability through limitation on preexisting
condition exclusions
(a) Limitation on preexisting condition exclusion period; crediting
for periods of previous coverage
Subject to subsection (d), a group health plan may, with respect
to a participant or beneficiary, impose a preexisting condition
exclusion only if -
(1) such exclusion relates to a condition (whether physical or
mental), regardless of the cause of the condition, for which
medical advice, diagnosis, care, or treatment was recommended or
received within the 6-month period ending on the enrollment date;
(2) such exclusion extends for a period of not more than 12
months (or 18 months in the case of a late enrollee) after the
enrollment date; and
(3) the period of any such preexisting condition exclusion is
reduced by the length of the aggregate of the periods of
creditable coverage (if any) applicable to the participant or
beneficiary as of the enrollment date.
(b) Definitions
For purposes of this section -
(1) Preexisting condition exclusion
(A) In general
The term ''preexisting condition exclusion'' means, with
respect to coverage, a limitation or exclusion of benefits
relating to a condition based on the fact that the condition
was present before the date of enrollment for such coverage,
whether or not any medical advice, diagnosis, care, or
treatment was recommended or received before such date.
(B) Treatment of genetic information
For purposes of this section, genetic information shall not
be treated as a condition described in subsection (a)(1) in the
absence of a diagnosis of the condition related to such
information.
(2) Enrollment date
The term ''enrollment date'' means, with respect to an
individual covered under a group health plan, the date of
enrollment of the individual in the plan or, if earlier, the
first day of the waiting period for such enrollment.
(3) Late enrollee
The term ''late enrollee'' means, with respect to coverage
under a group health plan, a participant or beneficiary who
enrolls under the plan other than during -
(A) the first period in which the individual is eligible to
enroll under the plan, or
(B) a special enrollment period under subsection (f).
(4) Waiting period
The term ''waiting period'' means, with respect to a group
health plan and an individual who is a potential participant or
beneficiary in the plan, the period that must pass with respect
to the individual before the individual is eligible to be covered
for benefits under the terms of the plan.
(c) Rules relating to crediting previous coverage
(1) Creditable coverage defined
For purposes of this part, the term ''creditable coverage''
means, with respect to an individual, coverage of the individual
under any of the following:
(A) A group health plan.
(B) Health insurance coverage.
(C) Part A or part B of title XVIII of the Social Security
Act.
(D) Title XIX of the Social Security Act, other than coverage
consisting solely of benefits under section 1928.
(E) Chapter 55 of title 10, United States Code.
(F) A medical care program of the Indian Health Service or of
a tribal organization.
(G) A State health benefits risk pool.
(H) A health plan offered under chapter 89 of title 5, United
States Code.
(I) A public health plan (as defined in regulations).
(J) A health benefit plan under section 5(e) of the Peace
Corps Act (22 U.S.C. 2504(e)).
Such term does not include coverage consisting solely of coverage
of excepted benefits (as defined in section 9832(c)).
(2) Not counting periods before significant breaks in coverage
(A) In general
A period of creditable coverage shall not be counted, with
respect to enrollment of an individual under a group health
plan, if, after such period and before the enrollment date,
there was a 63-day period during all of which the individual
was not covered under any creditable coverage.
(B) Waiting period not treated as a break in coverage
For purposes of subparagraph (A) and subsection (d)(4), any
period that an individual is in a waiting period for any
coverage under a group health plan or is in an affiliation
period shall not be taken into account in determining the
continuous period under subparagraph (A).
(C) Affiliation period
(i) In general
For purposes of this section, the term ''affiliation
period'' means a period which, under the terms of the health
insurance coverage offered by the health maintenance
organization, must expire before the health insurance
coverage becomes effective. During such an affiliation
period, the organization is not required to provide health
care services or benefits and no premium shall be charged to
the participant or beneficiary.
(ii) Beginning
Such period shall begin on the enrollment date.
(iii) Runs concurrently with waiting periods
Any such affiliation period shall run concurrently with any
waiting period under the plan.
(3) Method of crediting coverage
(A) Standard method
Except as otherwise provided under subparagraph (B), for
purposes of applying subsection (a)(3), a group health plan
shall count a period of creditable coverage without regard to
the specific benefits for which coverage is offered during the
period.
(B) Election of alternative method
A group health plan may elect to apply subsection (a)(3)
based on coverage of any benefits within each of several
classes or categories of benefits specified in regulations
rather than as provided under subparagraph (A). Such election
shall be made on a uniform basis for all participants and
beneficiaries. Under such election a group health plan shall
count a period of creditable coverage with respect to any class
or category of benefits if any level of benefits is covered
within such class or category.
(C) Plan notice
In the case of an election with respect to a group health
plan under subparagraph (B), the plan shall -
(i) prominently state in any disclosure statements
concerning the plan, and state to each enrollee at the time
of enrollment under the plan, that the plan has made such
election, and
(ii) include in such statements a description of the effect
of this election.
(4) Establishment of period
Periods of creditable coverage with respect to an individual
shall be established through presentation of certifications
described in subsection (e) or in such other manner as may be
specified in regulations.
(d) Exceptions
(1) Exclusion not applicable to certain newborns
Subject to paragraph (4), a group health plan may not impose
any preexisting condition exclusion in the case of an individual
who, as of the last day of the 30-day period beginning with the
date of birth, is covered under creditable coverage.
(2) Exclusion not applicable to certain adopted children
Subject to paragraph (4), a group health plan may not impose
any preexisting condition exclusion in the case of a child who is
adopted or placed for adoption before attaining 18 years of age
and who, as of the last day of the 30-day period beginning on the
date of the adoption or placement for adoption, is covered under
creditable coverage. The previous sentence shall not apply to
coverage before the date of such adoption or placement for
adoption.
(3) Exclusion not applicable to pregnancy
For purposes of this section, a group health plan may not
impose any preexisting condition exclusion relating to pregnancy
as a preexisting condition.
(4) Loss if break in coverage
Paragraphs (1) and (2) shall no longer apply to an individual
after the end of the first 63-day period during all of which the
individual was not covered under any creditable coverage.
(e) Certifications and disclosure of coverage
(1) Requirement for certification of period of creditable
coverage
(A) In general
A group health plan shall provide the certification described
in subparagraph (B) -
(i) at the time an individual ceases to be covered under
the plan or otherwise becomes covered under a COBRA
continuation provision,
(ii) in the case of an individual becoming covered under
such a provision, at the time the individual ceases to be
covered under such provision, and
(iii) on the request on behalf of an individual made not
later than 24 months after the date of cessation of the
coverage described in clause (i) or (ii), whichever is later.
The certification under clause (i) may be provided, to the
extent practicable, at a time consistent with notices required
under any applicable COBRA continuation provision.
(B) Certification
The certification described in this subparagraph is a written
certification of -
(i) the period of creditable coverage of the individual
under such plan and the coverage under such COBRA
continuation provision, and
(ii) the waiting period (if any) (and affiliation period,
if applicable) imposed with respect to the individual for any
coverage under such plan.
(C) Issuer compliance
To the extent that medical care under a group health plan
consists of health insurance coverage offered in connection
with the plan, the plan is deemed to have satisfied the
certification requirement under this paragraph if the issuer
provides for such certification in accordance with this
paragraph.
(2) Disclosure of information on previous benefits
(A) In general
In the case of an election described in subsection (c)(3)(B)
by a group health plan, if the plan enrolls an individual for
coverage under the plan and the individual provides a
certification of coverage of the individual under paragraph (1)
-
(i) upon request of such plan, the entity which issued the
certification provided by the individual shall promptly
disclose to such requesting plan information on coverage of
classes and categories of health benefits available under
such entity's plan, and
(ii) such entity may charge the requesting plan or issuer
for the reasonable cost of disclosing such information.
(3) Regulations
The Secretary shall establish rules to prevent an entity's
failure to provide information under paragraph (1) or (2) with
respect to previous coverage of an individual from adversely
affecting any subsequent coverage of the individual under another
group health plan or health insurance coverage.
(f) Special enrollment periods
(1) Individuals losing other coverage
A group health plan shall permit an employee who is eligible,
but not enrolled, for coverage under the terms of the plan (or a
dependent of such an employee if the dependent is eligible, but
not enrolled, for coverage under such terms) to enroll for
coverage under the terms of the plan if each of the following
conditions is met:
(A) The employee or dependent was covered under a group
health plan or had health insurance coverage at the time
coverage was previously offered to the employee or individual.
(B) The employee stated in writing at such time that coverage
under a group health plan or health insurance coverage was the
reason for declining enrollment, but only if the plan sponsor
(or the health insurance issuer offering health insurance
coverage in connection with the plan) required such a statement
at such time and provided the employee with notice of such
requirement (and the consequences of such requirement) at such
time.
(C) The employee's or dependent's coverage described in
subparagraph (A) -
(i) was under a COBRA continuation provision and the
coverage under such provision was exhausted; or
(ii) was not under such a provision and either the coverage
was terminated as a result of loss of eligibility for the
coverage (including as a result of legal separation, divorce,
death, termination of employment, or reduction in the number
of hours of employment) or employer contributions toward such
coverage were terminated.
(D) Under the terms of the plan, the employee requests such
enrollment not later than 30 days after the date of exhaustion
of coverage described in subparagraph (C)(i) or termination of
coverage or employer contribution described in subparagraph
(C)(ii).
(2) For dependent beneficiaries
(A) In general
If -
(i) a group health plan makes coverage available with
respect to a dependent of an individual,
(ii) the individual is a participant under the plan (or has
met any waiting period applicable to becoming a participant
under the plan and is eligible to be enrolled under the plan
but for a failure to enroll during a previous enrollment
period), and
(iii) a person becomes such a dependent of the individual
through marriage, birth, or adoption or placement for
adoption,
the group health plan shall provide for a dependent special
enrollment period described in subparagraph (B) during which
the person (or, if not otherwise enrolled, the individual) may
be enrolled under the plan as a dependent of the individual,
and in the case of the birth or adoption of a child, the spouse
of the individual may be enrolled as a dependent of the
individual if such spouse is otherwise eligible for coverage.
(B) Dependent special enrollment period
The dependent special enrollment period under this
subparagraph shall be a period of not less than 30 days and
shall begin on the later of -
(i) the date dependent coverage is made available, or
(ii) the date of the marriage, birth, or adoption or
placement for adoption (as the case may be) described in
subparagraph (A)(iii).
(C) No waiting period
If an individual seeks coverage of a dependent during the
first 30 days of such a dependent special enrollment period,
the coverage of the dependent shall become effective -
(i) in the case of marriage, not later than the first day
of the first month beginning after the date the completed
request for enrollment is received;
(ii) in the case of a dependent's birth, as of the date of
such birth; or
(iii) in the case of a dependent's adoption or placement
for adoption, the date of such adoption or placement for
adoption.
Sources
(Added Pub. L. 104-191, title IV, Sec. 401(a), Aug. 21, 1996, 110
Stat. 2073; amended Pub. L. 105-34, title XV, Sec. 1531(b)(1)(A),
Aug. 5, 1997, 111 Stat. 1084.)
References in Text
REFERENCES IN TEXT
The Social Security Act, referred to in subsec. (c)(1)(C), (D),
is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Parts A
and B of title XVIII of the Act are classified generally to parts A
(Sec. 1395c et seq.) and B (Sec. 1395j et seq.) of subchapter XVIII
of chapter 7 of Title 42, The Public Health and Welfare. Title XIX
of the Act is classified generally to subchapter XIX (Sec. 1396 et
seq.) of chapter 7 of Title 42. Section 1928 of the Act is
classified to section 1396s of Title 42. For complete
classification of this Act to the Code, see section 1305 of Title
42 and Tables.
Miscellaneous
AMENDMENTS
1997 - Subsec. (c)(1). Pub. L. 105-34 substituted ''section
9832(c)'' for ''section 9805(c)'' in concluding provisions.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by Pub. L. 105-34 applicable with respect to group
health plans for plan years beginning on or after Jan. 1, 1998, see
section 1531(c) of Pub. L. 105-34, set out as a note under section
4980D of this title.
EFFECTIVE DATE
Section 401(c) of Pub. L. 104-191 provided that:
''(1) In general. - The amendments made by this section (enacting
this subtitle) shall apply to plan years beginning after June 30,
1997.
''(2) Determination of creditable coverage. -
''(A) Period of coverage. -
''(i) In general. - Subject to clause (ii), no period before
July 1, 1996, shall be taken into account under chapter 100 of
the Internal Revenue Code of 1986 (as added by this section) in
determining creditable coverage.
''(ii) Special rule for certain periods. - The Secretary of
the Treasury, consistent with section 104 (42 U.S.C. 300gg-92
note), shall provide for a process whereby individuals who need
to establish creditable coverage for periods before July 1,
1996, and who would have such coverage credited but for clause
(i) may be given credit for creditable coverage for such
periods through the presentation of documents or other means.
''(B) Certifications, etc. -
''(i) In general. - Subject to clauses (ii) and (iii),
subsection (e) of section 9801 of the Internal Revenue Code of
1986 (as added by this section) shall apply to events occurring
after June 30, 1996.
''(ii) No certification required to be provided before june
1, 1997. - In no case is a certification required to be
provided under such subsection before June 1, 1997.
''(iii) Certification only on written request for events
occurring before october 1, 1996. - In the case of an event
occurring after June 30, 1996, and before October 1, 1996, a
certification is not required to be provided under such
subsection unless an individual (with respect to whom the
certification is otherwise required to be made) requests such
certification in writing.
''(C) Transitional rule. - In the case of an individual who
seeks to establish creditable coverage for any period for which
certification is not required because it relates to an event
occurring before June 30, 1996 -
''(i) the individual may present other credible evidence of
such coverage in order to establish the period of creditable
coverage; and
''(ii) a group health plan and a health insurance issuer
shall not be subject to any penalty or enforcement action with
respect to the plan's or issuer's crediting (or not crediting)
such coverage if the plan or issuer has sought to comply in
good faith with the applicable requirements under the
amendments made by this section.
''(3) Special rule for collective bargaining agreements. - Except
as provided in paragraph (2), in the case of a group health plan
maintained pursuant to 1 or more collective bargaining agreements
between employee representatives and one or more employers ratified
before the date of the enactment of this Act (Aug. 21, 1996), the
amendments made by this section shall not apply to plan years
beginning before the later of -
''(A) the date on which the last of the collective bargaining
agreements relating to the plan terminates (determined without
regard to any extension thereof agreed to after the date of the
enactment of this Act), or
''(B) July 1, 1997.
For purposes of subparagraph (A), any plan amendment made pursuant
to a collective bargaining agreement relating to the plan which
amends the plan solely to conform to any requirement added by this
section shall not be treated as a termination of such collective
bargaining agreement.
''(4) Timely regulations. - The Secretary of the Treasury,
consistent with section 104, shall first issue by not later than
April 1, 1997, such regulations as may be necessary to carry out
the amendments made by this section.
''(5) Limitation on actions. - No enforcement action shall be
taken, pursuant to the amendments made by this section, against a
group health plan or health insurance issuer with respect to a
violation of a requirement imposed by such amendments before
January 1, 1998, or, if later, the date of issuance of regulations
referred to in paragraph (4), if the plan or issuer has sought to
comply in good faith with such requirements.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 9802 of this title.
