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ISSUING CERTIFICATES OF CREDITABLE COVERAGE

By law, group health plans and insurers are required to issue certificates of creditable coverage to persons losing coverage; however, if either party issues a certificate with complete information, the other party is relieved of this obligation.

By June 1, 1997, insurers and group health plans, regardless of plan anniversary, must issue certificates of creditable coverage to members and dependents who lost coverage between October 1, 1996 and May 31, 1997. Also, beginning June 1, 1997, certificates of creditable coverage must be issued to members and dependents losing coverage according to the timing guidelines shown below.

Certificates of creditable coverage must be issued:

automatically when an individual's group coverage terminates and, for those electing COBRA (if applicable), when COBRA terminates; and

upon request within 24 months after coverage ends. 

Certificates must be issued within a reasonable amount of time following termination. The federal agencies have indicated they believe reasonable to be within 14 days.

Certificates must be provided to the individual in writing unless:

the person losing coverage requests it be sent to another party; or

the receiving party agrees to accept the information in another form.

Certificates of creditable coverage must contain the following information:

the date coverage was issued

the name of the group plan providing coverage

the name of the employee or dependent to which the certificate applies as well as any information needed to identify the person under the plan such as a plan ID or (for dependents), the employee's name

the name, address and telephone number of the plan or insurer required to provide the certificate

if the telephone is different than above, a telephone number to call for further information

either (a) a statement that the person has at least 18 months creditable coverage without a significant break or (b) the date any waiting period began and the date creditable coverage began

the date creditable coverage ended or in indication it is still continuing.

Information for families may be combined on a certificate. If this information is not identical for all family members it must state so and include whatever information is required for each person.

Transitional Rule for Issuing Certificates to Dependents

Through June 30, 1998, a group health plan or insurer does not maintain dependent data can satisfy the issuance of dependent certificates by naming the employee and specifying that the coverage on the certificate is for dependents, for example: "family," or "employee plus spouse" coverage.

Note to Insured Group Plans Whose Health Coverage Is with Principal Mutual:

Principal Mutual will:

automatically issue certificates of creditable coverage for persons who lost coverage between October 1, 1996 and May 31, 1997.

issue certificates, upon request, to persons who lost coverage between July 1, 1996 and September 30, 1996.

issue certificates of creditable coverage for persons losing coverage from June 1, 1997 forward, automatically when required, and upon request.

In addition Principal Mutual will:

determine the amount of creditable coverage when a certificate or evidence of creditable coverage is presented to us.

provide notice of a pre-existing condition exclusion for persons when applicable.

actively cooperate with individuals, employers and third parties as necessary to ensure individuals receive credit for any prior health coverage.

In order for Principal Mutual to issue certificates as required by law, each insured group health plan will need to provide certain information.

Note to Self-Insured Group Plans Whose Health Claims Are Paid by Principal Mutual:

Self-insured group health plans will soon receive a letter, offering substantially the same service as we will provide to insured group health plans.

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