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Content Last Revised: 12/30/2004 |
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Code of Federal Regulations Pertaining to U.S. Department of Labor |
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Labor |
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Pension and Welfare Benefits Administration, Department of Labor |
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Rules and Regulations for Group Health Plan Requirements |
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Requirements Relating to Access and Renewability of Coverage, and Limitations on Preexisting Condition Exclusion Periods |
29 CFR 2590.701-5 - Certification and disclosure of previous coverage.
- Section Number: 2590.701-5
- Section Name: Certification and disclosure of previous coverage.
(a) Certificate of creditable coverage--(1) Entities required to
provide certificate--(i) In general. A group health plan, and each
health insurance issuer offering group health insurance coverage under a
group health plan, is required to furnish certificates of creditable
coverage in accordance with this paragraph (a).
(ii) Duplicate certificates not required. An entity required to
provide a certificate under this paragraph (a) with respect to an
individual satisfies that requirement if another party provides the
certificate, but only to the extent that the certificate contains the
information required in paragraph (a)(3) of this section. For example,
in the case of a group health plan funded through an insurance policy,
the issuer satisfies the certification requirement with respect to an
individual if the plan actually provides a certificate that includes all
the information required under paragraph (a)(3) of this section with
respect to the individual.
(iii) Special rule for group health plans. To the extent coverage
under a plan consists of group health insurance coverage, the plan
satisfies the certification requirements under this paragraph (a) if any
issuer offering the coverage is required to provide the certificates
pursuant to an agreement between the plan and the issuer. For example,
if there is an agreement between an issuer and a plan sponsor under
which the issuer agrees to provide certificates for individuals covered
under the plan, and the issuer fails to provide a certificate to an
individual when the plan would have been required to provide one under
this paragraph (a), then the issuer, but not the plan, violates the
certification requirements of this paragraph (a).
[[Page 650]]
(iv) Special rules for issuers--(A)(1) Responsibility of issuer for
coverage period. An issuer is not required to provide information
regarding coverage provided to an individual by another party.
(2) Example. The rule of this paragraph (a)(1)(iv)(A) is illustrated
by the following example:
Example. (i) Facts. A plan offers coverage with an HMO option from
one issuer and an indemnity option from a different issuer. The HMO has
not entered into an agreement with the plan to provide certificates as
permitted under paragraph (a)(1)(iii) of this section.
(ii) Conclusion. In this Example, if an employee switches from the
indemnity option to the HMO option and later ceases to be covered under
the plan, any certificate provided by the HMO is not required to provide
information regarding the employee's coverage under the indemnity
option.
(B)(1) Cessation of issuer coverage prior to cessation of coverage
under a plan. If an individual's coverage under an issuer's policy or
contract ceases before the individual's coverage under the plan ceases,
the issuer is required to provide sufficient information to the plan (or
to another party designated by the plan) to enable the plan (or other
party), after cessation of the individual's coverage under the plan, to
provide a certificate that reflects the period of coverage under the
policy or contract. By providing that information to the plan, the
issuer satisfies its obligation to provide an automatic certificate for
that period of creditable coverage with respect to the individual under
paragraph (a)(2)(ii) of this section. The issuer, however, must still
provide a certificate upon request as required under paragraph
(a)(2)(iii) of this section. In addition, the issuer is required to
cooperate with the plan in responding to any request made under
paragraph (b)(2) of this section (relating to the alternative method of
counting creditable coverage). Moreover, if the individual's coverage
under the plan ceases at the time the individual's coverage under the
issuer's policy or contract ceases, the issuer must still provide an
automatic certificate under paragraph (a)(2)(ii) of this section. If an
individual's coverage under an issuer's policy or contract ceases on the
effective date for changing enrollment options under the plan, the
issuer may presume (absent information to the contrary) that the
individual's coverage under the plan continues. Therefore, the issuer is
required to provide information to the plan in accordance with this
paragraph (a)(1)(iv)(B)(1) (and is not required to provide an automatic
certificate under paragraph (a)(2)(ii) of this section).
(2) Example. The rule of this paragraph (a)(1)(iv)(B) is illustrated
by the following example:
Example. (i) Facts. A group health plan provides coverage under an
HMO option and an indemnity option through different issuers, and only
allows employees to switch on each January 1. Neither the HMO nor the
indemnity issuer has entered into an agreement with the plan to provide
certificates as permitted under paragraph (a)(1)(iii) of this section.
(ii) Conclusion. In this Example, if an employee switches from the
indemnity option to the HMO option on January 1, the indemnity issuer
must provide the plan (or a person designated by the plan) with
appropriate information with respect to the individual's coverage with
the indemnity issuer. However, if the individual's coverage with the
indemnity issuer ceases at a date other than January 1, the issuer is
instead required to provide the individual with an automatic
certificate.
(2) Individuals for whom certificate must be provided; timing of
issuance--(i) Individuals. A certificate must be provided, without
charge, for participants or dependents who are or were covered under a
group health plan upon the occurrence of any of the events described in
paragraph (a)(2)(ii) or (iii) of this section.
(ii) Issuance of automatic certificates. The certificates described
in this paragraph (a)(2)(ii) are referred to as automatic certificates.
(A) Qualified beneficiaries upon a qualifying event. In the case of
an individual who is a qualified beneficiary (as defined in section
607(3) of the Act) entitled to elect COBRA continuation coverage, an
automatic certificate is required to be provided at the time the
individual would lose coverage under the plan in the absence of COBRA
continuation coverage or alternative coverage elected instead of COBRA
continuation coverage. A plan or issuer satisfies this requirement if it
provides the automatic certificate no later than
[[Page 651]]
the time a notice is required to be furnished for a qualifying event
under section 606 of the Act (relating to notices required under COBRA).
(B) Other individuals when coverage ceases. In the case of an
individual who is not a qualified beneficiary entitled to elect COBRA
continuation coverage, an automatic certificate must be provided at the
time the individual ceases to be covered under the plan. A plan or
issuer satisfies the requirement to provide an automatic certificate at
the time the individual ceases to be covered if it provides the
automatic certificate within a reasonable time after coverage ceases (or
after the expiration of any grace period for nonpayment of premiums).
(1) The cessation of temporary continuation coverage (TCC) under
Title 5 U.S.C. Chapter 89 (the Federal Employees Health Benefit Program)
is a cessation of coverage upon which an automatic certificate must be
provided.
(2) In the case of an individual who is entitled to elect to
continue coverage under a State program similar to COBRA and who
receives the automatic certificate not later than the time a notice is
required to be furnished under the State program, the certificate is
deemed to be provided within a reasonable time after coverage ceases
under the plan.
(3) If an individual's coverage ceases due to the operation of a
lifetime limit on all benefits, coverage is considered to cease for
purposes of this paragraph (a)(2)(ii)(B) on the earliest date that a
claim is denied due to the operation of the lifetime limit.
(C) Qualified beneficiaries when COBRA ceases. In the case of an
individual who is a qualified beneficiary and has elected COBRA
continuation coverage (or whose coverage has continued after the
individual became entitled to elect COBRA continuation coverage), an
automatic certificate is to be provided at the time the individual' s
coverage under the plan ceases. A plan, or issuer, satisfies this
requirement if it provides the automatic certificate within a reasonable
time after coverage ceases (or after the expiration of any grace period
for nonpayment of premiums). An automatic certificate is required to be
provided to such an individual regardless of whether the individual has
previously received an automatic certificate under paragraph
(a)(2)(ii)(A) of this section.
(iii) Any individual upon request. A certificate must be provided in
response to a request made by, or on behalf of, an individual at any
time while the individual is covered under a plan and up to 24 months
after coverage ceases. Thus, for example, a plan in which an individual
enrolls may, if authorized by the individual, request a certificate of
the individual's creditable coverage on behalf of the individual from a
plan in which the individual was formerly enrolled. After the request is
received, a plan or issuer is required to provide the certificate by the
earliest date that the plan or issuer, acting in a reasonable and prompt
fashion, can provide the certificate. A certificate is required to be
provided under this paragraph (a)(2)(iii) even if the individual has
previously received a certificate under this paragraph (a)(2)(iii) or an
automatic certificate under paragraph (a)(2)(ii) of this section.
(iv) Examples. The rules of this paragraph (a)(2) are illustrated by
the following examples:
Example 1. (i) Facts. Individual A terminates employment with
Employer Q. A is a qualified beneficiary entitled to elect COBRA
continuation coverage under Employer Q's group health plan. A notice of
the rights provided under COBRA is typically furnished to qualified
beneficiaries under the plan within 10 days after a covered employee
terminates employment.
(ii) Conclusion. In this Example 1, the automatic certificate may be
provided at the same time that A is provided the COBRA notice.
Example 2. (i) Facts. Same facts as Example 1, except that the
automatic certificate for A is not completed by the time the COBRA
notice is furnished to A.
(ii) Conclusion. In this Example 2, the automatic certificate may be
provided after the COBRA notice but must be provided within the period
permitted by law for the delivery of notices under COBRA.
Example 3. (i) Facts. Employer R maintains an insured group health
plan. R has never had 20 employees and thus R's plan is not subject to
the COBRA continuation provisions. However, R is in a State that has a
State program similar to COBRA. B terminates employment with R and loses
coverage under R's plan.
[[Page 652]]
(ii) Conclusion. In this Example 3, the automatic certificate must
be provided not later than the time a notice is required to be furnished
under the State program.
Example 4. (i) Facts. Individual C terminates employment with
Employer S and receives both a notice of C's rights under COBRA and an
automatic certificate. C elects COBRA continuation coverage under
Employer S's group health plan. After four months of COBRA continuation
coverage and the expiration of a 30-day grace period, S's group health
plan determines that C's COBRA continuation coverage has ceased due to a
failure to make a timely payment for continuation coverage.
(ii) Conclusion. In this Example 4, the plan must provide an updated
automatic certificate to C within a reasonable time after the end of the
grace period.
Example 5. (i) Facts. Individual D is currently covered under the
group health plan of Employer T. D requests a certificate, as permitted
under paragraph (a)(2)(iii) of this section. Under the procedure for T's
plan, certificates are mailed (by first class mail) 7 business days
following receipt of the request. This date reflects the earliest date
that the plan, acting in a reasonable and prompt fashion, can provide
certificates.
(ii) Conclusion. In this Example 5, the plan's procedure satisfies
paragraph (a)(2)(iii) of this section.
(3) Form and content of certificate--(i) Written certificate--(A) In
general. Except as provided in paragraph (a)(3)(i)(B) of this section,
the certificate must be provided in writing (or any other medium
approved by the Secretary).
(B) Other permissible forms. No written certificate is required to
be provided under this paragraph (a) with respect to a particular event
described in paragraph (a)(2)(ii) or (iii) of this section, if--
(1) An individual who is entitled to receive the certificate
requests that the certificate be sent to another plan or issuer instead
of to the individual;
(2) The plan or issuer that would otherwise receive the certificate
agrees to accept the information in this paragraph (a)(3) through means
other than a written certificate (such as by telephone); and
(3) The receiving plan or issuer receives the information from the
sending plan or issuer through such means within the time required under
paragraph (a)(2) of this section.
(ii) Required information. The certificate must include the
following--
(A) The date the certificate is issued;
(B) The name of the group health plan that provided the coverage
described in the certificate;
(C) The name of the participant or dependent with respect to whom
the certificate applies, and any other information necessary for the
plan providing the coverage specified in the certificate to identify the
individual, such as the individual's identification number under the
plan and the name of the participant if the certificate is for (or
includes) a dependent;
(D) The name, address, and telephone number of the plan
administrator or issuer required to provide the certificate;
(E) The telephone number to call for further information regarding
the certificate (if different from paragraph (a)(3)(ii)(D) of this
section);
(F) Either--
(1) A statement that an individual has at least 18 months (for this
purpose, 546 days is deemed to be 18 months) of creditable coverage,
disregarding days of creditable coverage before a significant break in
coverage, or
(2) The date any waiting period (and affiliation period, if
applicable) began and the date creditable coverage began;
(G) The date creditable coverage ended, unless the certificate
indicates that creditable coverage is continuing as of the date of the
certificate; and
(H) An educational statement regarding HIPAA, which explains:
(1) The restrictions on the ability of a plan or issuer to impose a
preexisting condition exclusion (including an individual's ability to
reduce a preexisting condition exclusion by creditable coverage);
(2) Special enrollment rights;
(3) The prohibitions against discrimination based on any health
factor;
(4) The right to individual health coverage;
(5) The fact that state law may require issuers to provide
additional protections to individuals in that State; and
(6) Where to get more information.
(iii) Periods of coverage under the certificate. If an automatic
certificate is provided pursuant to paragraph (a)(2)(ii) of this
section, the period that
[[Page 653]]
must be included on the certificate is the last period of continuous
coverage ending on the date coverage ceased. If an individual requests a
certificate pursuant to paragraph (a)(2)(iii) of this section, the
certificate provided must include each period of continuous coverage
ending within the 24-month period ending on the date of the request (or
continuing on the date of the request). A separate certificate may be
provided for each such period of continuous coverage.
(iv) Combining information for families. A certificate may provide
information with respect to both a participant and the participant's
dependents if the information is identical for each individual. If the
information is not identical, certificates may be provided on one form
if the form provides all the required information for each individual
and separately states the information that is not identical.
(v) Model certificate. The requirements of paragraph (a)(3)(ii) of
this section are satisfied if the plan or issuer provides a certificate
in accordance with a model certificate authorized by the Secretary.
(vi) Excepted benefits; categories of benefits. No certificate is
required to be furnished with respect to excepted benefits described in
Sec. 2590.732(c). In addition, the information in the certificate
regarding coverage is not required to specify categories of benefits
described in Sec. 2590.701-4(c) (relating to the alternative method of
counting creditable coverage). However, if excepted benefits are
provided concurrently with other creditable coverage (so that the
coverage does not consist solely of excepted benefits), information
concerning the benefits may be required to be disclosed under paragraph
(b) of this section.
(4) Procedures--(i) Method of delivery. The certificate is required
to be provided to each individual described in paragraph (a)(2) of this
section or an entity requesting the certificate on behalf of the
individual. The certificate may be provided by first-class mail. (See
also Sec. 2520.104b-1, which permits plans to make disclosures under
the Act--including the furnishing of certificates--through electronic
means if certain standards are met.) If the certificate or certificates
are provided to the participant and the participant's spouse at the
participant's last known address, then the requirements of this
paragraph (a)(4) are satisfied with respect to all individuals residing
at that address. If a dependent's last known address is different than
the participant's last known address, a separate certificate is required
to be provided to the dependent at the dependent's last known address.
If separate certificates are being provided by mail to individuals who
reside at the same address, separate mailings of each certificate are
not required.
(ii) Procedure for requesting certificates. A plan or issuer must
establish a written procedure for individuals to request and receive
certificates pursuant to paragraph (a)(2)(iii) of this section. The
written procedure must include all contact information necessary to
request a certificate (such as name and phone number or address).
(iii) Designated recipients. If an automatic certificate is required
to be provided under paragraph (a)(2)(ii) of this section, and the
individual entitled to receive the certificate designates another
individual or entity to receive the certificate, the plan or issuer
responsible for providing the certificate is permitted to provide the
certificate to the designated individual or entity. If a certificate is
required to be provided upon request under paragraph (a)(2)(iii) of this
section and the individual entitled to receive the certificate
designates another individual or entity to receive the certificate, the
plan or issuer responsible for providing the certificate is required to
provide the certificate to the designated individual or entity.
(5) Special rules concerning dependent coverage--(i)(A) Reasonable
efforts. A plan or issuer is required to use reasonable efforts to
determine any information needed for a certificate relating to dependent
coverage. In any case in which an automatic certificate is required to
be furnished with respect to a dependent under paragraph (a)(2)(ii) of
this section, no individual certificate is required to be furnished
until the plan or issuer knows (or making reasonable efforts should
know) of the dependent's cessation of coverage under the plan.
[[Page 654]]
(B) Example. The rules of this paragraph (a)(5)(i) are illustrated
by the following example:
Example. (i) Facts. A group health plan covers employees and their
dependents. The plan annually requests all employees to provide updated
information regarding dependents, including the specific date on which
an employee has a new dependent or on which a person ceases to be a
dependent of the employee.
(ii) Conclusion. In this Example, the plan has satisfied the
standard in this paragraph (a)(5)(i) of this section that it make
reasonable efforts to determine the cessation of dependents' coverage
and the related dependent coverage information.
(ii) Special rules for demonstrating coverage. If a certificate
furnished by a plan or issuer does not provide the name of any dependent
covered by the certificate, the procedures described in paragraph (c)(5)
of this section may be used to demonstrate dependent status. In
addition, these procedures may be used to demonstrate that a child was
covered under any creditable coverage within 30 days after birth,
adoption, or placement for adoption. See also Sec. 2590.701-3(b), under
which such a child cannot be subject to a preexisting condition
exclusion.
(6) Special certification rules for entities not subject to Part 7
of Subtitle B of Title I of the Act--(i) Issuers. For special rules
requiring that issuers not subject to Part 7 of Subtitle B of Title I of
the Act provide certificates consistent with the rules in this section,
including issuers offering coverage with respect to creditable coverage
described in sections 701(c)(1)(G), (I), and (J) of the Act (coverage
under a State health benefits risk pool, a public health plan, and a
health benefit plan under section 5(e) of the Peace Corps Act), see
sections 2743 and 2721(b)(1)(B) of the PHS Act (requiring certificates
by issuers in the individual market, and issuers offering health
insurance coverage in connection with a group health plan, including a
church plan or a governmental plan (such as the Federal Employees Health
Benefits Program (FEHBP)). (However, this section does not require a
certificate to be provided with respect to short-term, limited-duration
insurance, as described in the definition of individual health insurance
coverage in Sec. 2590.701-2, that is not provided by a group health
plan or issuer offering health insurance coverage in connection with a
group health plan.)
(ii) Other entities. For special rules requiring that certain other
entities not subject to Part 7 of Subtitle B of Title I of the Act
provide certificates consistent with the rules in this section, see
section 2791(a)(3) of the PHS Act applicable to entities described in
sections 2701(c)(1)(C), (D), (E), and (F) of the PHS Act (relating to
Medicare, Medicaid, TRICARE, and Indian Health Service), section
2721(b)(1)(A) of the PHS Act applicable to nonfederal governmental plans
generally, section 2721(b)(2)(C)(ii) of the PHS Act applicable to
nonfederal governmental plans that elect to be excluded from the
requirements of Subparts 1 through 3 of Part A of Title XXVII of the PHS
Act, and section 9832(a) of the Internal Revenue Code applicable to
group health plans, which includes church plans (as defined in section
414(e) of the Internal Revenue Code).
(b) Disclosure of coverage to a plan or issuer using the alternative
method of counting creditable coverage--(1) In general. After an
individual provides a certificate of creditable coverage to a plan or
issuer using the alternative method under Sec. 2590.701-4(c), that plan
or issuer (requesting entity) must request that the entity that issued
the certificate (prior entity) disclose the information set forth in
paragraph (b)(2) of this section. The prior entity is required to
disclose this information promptly.
(2) Information to be disclosed. The prior entity is required to
identify to the requesting entity the categories of benefits with
respect to which the requesting entity is using the alternative method
of counting creditable coverage, and the requesting entity may identify
specific information that the requesting entity reasonably needs in
order to determine the individual's creditable coverage with respect to
any such category.
(3) Charge for providing information. The prior entity may charge
the requesting entity for the reasonable cost of disclosing such
information.
(c) Ability of an individual to demonstrate creditable coverage and
waiting period information--(1) Purpose. The rules in this paragraph (c)
implement
[[Page 655]]
section 701(c)(4) of the Act, which permits individuals to demonstrate
the duration of creditable coverage through means other than
certificates, and section 701(e)(3) of the Act, which requires the
Secretary to establish rules designed to prevent an individual's
subsequent coverage under a group health plan or health insurance
coverage from being adversely affected by an entity's failure to provide
a certificate with respect to that individual.
(2) In general. If the accuracy of a certificate is contested or a
certificate is unavailable when needed by an individual, the individual
has the right to demonstrate creditable coverage (and waiting or
affiliation periods) through the presentation of documents or other
means. For example, the individual may make such a demonstration when--
(i) An entity has failed to provide a certificate within the
required time;
(ii) The individual has creditable coverage provided by an entity
that is not required to provide a certificate of the coverage pursuant
to paragraph (a) of this section;
(iii) The individual has an urgent medical condition that
necessitates a determination before the individual can deliver a
certificate to the plan; or
(iv) The individual lost a certificate that the individual had
previously received and is unable to obtain another certificate.
(3) Evidence of creditable coverage--(i) Consideration of evidence--
(A) A plan or issuer is required to take into account all information
that it obtains or that is presented on behalf of an individual to make
a determination, based on the relevant facts and circumstances, whether
an individual has creditable coverage. A plan or issuer shall treat the
individual as having furnished a certificate under paragraph (a) of this
section if--
(1) The individual attests to the period of creditable coverage;
(2) The individual also presents relevant corroborating evidence of
some creditable coverage during the period; and
(3) The individual cooperates with the plan's or issuer's efforts to
verify the individual's coverage.
(B) For purposes of this paragraph (c)(3)(i), cooperation includes
providing (upon the plan's or issuer's request) a written authorization
for the plan or issuer to request a certificate on behalf of the
individual, and cooperating in efforts to determine the validity of the
corroborating evidence and the dates of creditable coverage. While a
plan or issuer may refuse to credit coverage where the individual fails
to cooperate with the plan's or issuer's efforts to verify coverage, the
plan or issuer may not consider an individual's inability to obtain a
certificate to be evidence of the absence of creditable coverage.
(ii) Documents. Documents that corroborate creditable coverage (and
waiting or affiliation periods) include explanations of benefits (EOBs)
or other correspondence from a plan or issuer indicating coverage, pay
stubs showing a payroll deduction for health coverage, a health
insurance identification card, a certificate of coverage under a group
health policy, records from medical care providers indicating health
coverage, third party statements verifying periods of coverage, and any
other relevant documents that evidence periods of health coverage.
(iii) Other evidence. Creditable coverage (and waiting or
affiliation periods) may also be corroborated through means other than
documentation, such as by a telephone call from the plan or provider to
a third party verifying creditable coverage.
(iv) Example. The rules of this paragraph (c)(3) are illustrated by
the following example:
Example. (i) Facts. Individual F terminates employment with Employer
W and, a month later, is hired by Employer X. X's group health plan
imposes a preexisting condition exclusion of 12 months on new enrollees
under the plan and uses the standard method of determining creditable
coverage. F fails to receive a certificate of prior coverage from the
self-insured group health plan maintained by F's prior employer, W, and
requests a certificate. However, F (and X's plan, on F's behalf and with
F's cooperation) is unable to obtain a certificate from W's plan. F
attests that, to the best of F's knowledge, F had at least 12 months of
continuous coverage under W's plan, and that the coverage ended no
earlier than F's termination
[[Page 656]]
of employment from W. In addition, F presents evidence of coverage, such
as an explanation of benefits for a claim that was made during the
relevant period.
(ii) Conclusion. In this Example, based solely on these facts, F has
demonstrated creditable coverage for the 12 months of coverage under W's
plan in the same manner as if F had presented a written certificate of
creditable coverage.
(4) Demonstrating categories of creditable coverage. Procedures
similar to those described in this paragraph (c) apply in order to
determine the duration of an individual's creditable coverage with
respect to any category under paragraph (b) of this section (relating to
determining creditable coverage under the alternative method).
(5) Demonstrating dependent status. If, in the course of providing
evidence (including a certificate) of creditable coverage, an individual
is required to demonstrate dependent status, the group health plan or
issuer is required to treat the individual as having furnished a
certificate showing the dependent status if the individual attests to
such dependency and the period of such status and the individual
cooperates with the plan's or issuer's efforts to verify the dependent
status.
[69 FR 78763, Dec. 30, 2004]
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