CREDITABLE COVERAGE
The application of any pre-existing condition exclusion is produced by the number of days in which a pre-existing condition exclusion is satisfied under any one of the following:
an insured or self-insured group health plan
The pre-existing credit does not apply to persons who have more than a 63-day lapse in coverage (or, for insured group health plans, as allowed by state law). Benefit waiting periods do not count as a lapse in coverage.
A pre-existing condition exclusion period is measured from a person's enrollment date in the plan even if enrollment is prior to the date HIPAA becomes effective for that particular plan. A person may use creditable coverage she/he has prior to the enrollment date to reduce the maximum pre-existing period.
When a person loses group health coverage (including coverage through COBRA or state continuation), a group health plan or insurer must make available a certificate of "creditable coverage" to that person (see Issuing Certificates of Creditable Coverage). This certificate shows the dates during which the person had health coverage. A person can take this certificate to his or her new group health plan and get credit toward any pre-existing exclusion period.
Standard and Alternative Methods of Counting Creditable Coverage
There are two methods that can be used to determine creditable coverage. The standard method gives credit for health coverage without regard to the types of coverage or benefits offered. Under the alternative method, credit is determined the same for all benefits except benefits in these categories:
A group health plan or insurer may apply a different pre-existing condition exclusion to each of these categories. If the alternative method id used, it must be applied uniformly to all plan members. At the time of publication, Principal Mutual intends to use the standard method of crediting coverage for all its insured group health plans.
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