Federal health insurance laws include ERISA, COBRA, HIPAA and HCERA.
Health insurances usually require people to pay a monthly premium to receive protection from financial medical burdens. The Employee Retirement Income Security Act of 1974 (ERISA) and its amendments, the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) and Health Insurance Portability and Accountability Act of 1996 (HIPAA), as well as the Health Care and Education Reconciliation Act of 2010 (HCERA) comprise four federal laws that each protect U.S. health insurance coverage.
HCERA
HCERA allows individuals with preexisting conditions to get access to health care coverage. It also bans insurance companies from implementing lifetime caps on coverage as well as dropping individuals from coverage plans when they become ill. HCERA allows small businesses that offer health insurance to receive tax credits of up to 35 percent of premiums. As of 2011, HCERA requires insurers to spend a minimum amount of their premium dollars on medical services; 80 percent for the individual and small-group market, and 85 percent for the large-group market. Those that do not must provide rebates to policyholders. Insurance companies must also provide justification for premium increases.
COBRA
COBRA is a health insurance continuation law that covers individuals at companies that employ 20 or more people and provide a group health insurance plan. COBRA requires employers that terminate or reduce hours of individuals to continue providing health insurance coverage for up to 18 months or when the individual becomes eligible for another plan. The individual must pay up to 102% of the cost of the group health care premium to receive COBRA benefits. If he fails to pay he may lose coverage. COBRA also provides coverage for widows and divorcees of eligible people, as well as young adults who lose "dependent child" status and do not have their own health insurance.
HIPAA
HIPAA provides a person with control and protection over his health record information. It limits exclusions of employees and their families from taking advantage of health insurance plans because of preexisting medical conditions. Employers must provide coverage for these conditions no later than 12 months after enrollment of the employee or his dependents. HIPAA also provides continuous coverage from employers to employees who leave the company to start a small business, provided the employee received insurance for at least 18 months with the company. Employers must provide participants with notice of plan privacy rights, train employees about privacy procedures and secure individually identifiable health information. States may extend the HIPAA coverage requirements of health insurance benefits.
ERISA
ERISA allows each state to regulate health insurance policies that an employer can purchase. ERISA protects employees who work for employers that chose self-funded health plans, as opposed to plans offered by insurance companies, by setting minimum standards that a self-funded plan must meet. Plan members must receive a summary plan description (SPD) that contains information about the plan. The SPD must include features and funding, how plan managers spend money and assets, an established appeals process, what services and drugs the plan covers, and lifetime caps or other limits of the plan. State insurance departments do not have authority over ERISA plans. The U.S. Department of Labor regulates them.
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