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News Release

EBSA Press Release: Labor Department addresses new Health Care Legislation overing millions of workers [12/18/1996]

Archived News Release — Caution: Information may be out of date.

For more information call: (202) 219-8921

A reference guide to help employees and employers understand the effects of recent legislative changes on health plans is being issued by the U.S. Department of Labor.

The booklet, "Questions and Answers: Recent Changes in Health Care Law," provides guidance concerning changes made by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Newborns' and Mothers' Health Protection Act of 1996 and the Mental Health Parity Act of 1996.

"People want to know how these new laws are going to work, and we are issuing this booklet to begin to answer their questions," said Secretary of Labor Robert B. Reich. "The Labor Department has received thousands of calls, particularly about the Health Insurance Portability and Accountability Act. Callers want to know how they can carry health insurance to another job if their new employer offers health care coverage. And they want to know when HIPAA takes effect."

Reich added: "The other two pieces of legislation offer some new opportunities and protections as well. For instance, mothers and newborns who stay in the hospital an extra day can count on their health insurance to help pay under the Newborns' and Mothers' Health Protection Act. And those who have had severe limits placed on their mental health coverage can now be confident that those benefits will be comparable to medical and surgical benefits under MHPA."

"We estimate that 25 million Americans--approximately 1 in 10--could be affected by the provisions of HIPAA and millions more by the Newborns' and Mothers' Health Protection Act and the Mental Health Parity Act. In issuing this publication, we hope to provide employees and their employers with some basics."

The booklet gives an overview of each law and answers the most frequently asked questions. Since the early fall, when the three new pieces of legislation were passed, the Pension and Welfare Benefits Administration (PWBA) has received several thousand calls from plan participants asking about the effects of the new laws. As a result, the agency developed this publication to address the most commonly asked questions. The three top questions, included in the booklet, are:

  • When is HIPAA effective?

    Most of HIPAA's requirements will not take effect immediately. Under the new law, group health plans must comply with most of the new law's health coverage requirements at the beginning of the first plan year starting after June 30, 1997. For example, if an employer's plan starts a new plan year on January 1, HIPAA's provisions will not apply until January 1, 1998.


  • How does the pre-existing condition provision work?

    Currently, some plans do not cover pre-existing medical conditions. HIPAA limits this practice so that most plans must cover an individual's pre-existing condition after 12 months. At the time of a job change, individuals who already have 12 months of continuous group health coverage will not have to start over with a new 12-month exclusion for any pre-existing conditions.


  • Does the new law extend my COBRA (health coverage continuation) benefits?

    HIPAA does not extend COBRA coverage for the most people. However, the new law does make some changes in COBRA coverage in special circumstances. The booklet addresses these changes and circumstances and also includes a model notice that discusses these changes in detail.

Archived News Release — Caution: Information may be out of date.

Employee Benefits Security Administration
December 18, 1996
Release Number