hipaaHIPAA, the government’s Health Insurance Portability and Accountability Act, provides protections rights for participants and beneficiaries in group health insurance plans. Group Health Insurance providers cannot require that you pass a physical examination in order to be eligible for coverage, even if you are a late enrollee.

HIPAA forbids discrimination against employees and their dependents based on health status, limits exceptions for preexisting conditions, and allows individuals a special opportunity to enroll in new group health plan in certain circumstances. HIPAA can also give you an opportunity to purchase individual health coverage if you have no group health plan available, and have used up COBRA or other continuation health coverage.

If you leave your company to become self-employed, apply for individual coverage before your COBRA option expires (18 months). Continuing COBRA for the entire 18 months may expose you to the risk of future insurability. Your health may go bad during this time, and seriously limit your insurance choices.

If you’re eligible, continue your group health insurance coverage under COBRA, by all means, so that you will have continuous health insurance coverage. Stay with COBRA as you evaluate the self-employment opportunities. If you find that you don’t care for self-employment, COBRA will tide you over until you’re back with another company, and covered by its group health plan.

As soon as you decide to be self-employed, apply for a good personal health care plan, keeping COBRA while your application is being reviewed. When you’re approved, drop COBRA. If you are declined, keep COBRA until you’ve found replacement health insurance.

The HIPAA nondiscrimination requirements do not automatically forbid health care questionnaires. It is dependent on how the information that is gathered is used. In this case, the act requires persons to score a certain number of “Health Points” that are linked to current or prior medical conditions in order to participate in the plan, which is prohibited discrimination in regulations for eligibility based on health factors.

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