Federal law currently requires employer-sponsored group health plans to issue documents demonstrating an employee’s prior health coverage (called “certificates of creditable coverage“) that can be used to reduce the pre-existing condition exclusion period that a plan can apply to the individual. However, these certificates are becoming unnecessary as the Affordable Care Act prohibits pre-existing condition exclusions for plan years beginning on or after January 1, 2014.
As a result, the requirement to issue certificates of creditable coverage will be eliminated as of December 31, 2014. This effective date accounts for individuals needing to offset a pre-existing condition exclusion under plans beginning December 31, 2013, so that they will still have access to the certificate for proof of coverage through December 30, 2014.
Employers must continue to provide certificates of creditable coverage until December 31, 2014. (Note: A health insurance issuer, rather than the employer, may be responsible for providing certificates of creditable coverage if there is an agreement between the two that makes the issuer responsible.) A certificate must be issued automatically and free of charge when an individual:
- Loses coverage under a plan;
- Becomes entitled to elect COBRA continuation coverage;
- Loses COBRA continuation coverage; or
- Makes a request for a certificate while the individual has health coverage or within 24 months after coverage ends.
Check out our Benefits Notices Calendar within the HR & Benefits Library on the Client Resource Center for other notices required to be provided by employers and group health plans.
