Ralph told Mike the first thing he could do was enroll in
COBRA continuation through his old employer, which would maintain his coverage between jobs. This was important because Mike wouldn’t be covered under his new employer’s health plan until after he made it through a three-month service wait. Once Mike made it through the first three months on the job, then he’d need to carefully choose which kind of health plan he wanted. This would be key for Mike, Ralph explained, because different health plans have different exclusionary periods. During the exclusionary period, which can last up to one year under some plans, pre-existing conditions like Mike’s wouldn’t be covered. Ralph told Mike that if he enrolled in his employer’s
Health Maintenance Organization plan he would be fully covered right away because group HMOs in California had no exclusionary periods.
Pre-Existing Condition Exclusionary Periods for Group Health Coverage in California
Health Maintenance Organizations (HMO)
There are no pre-existing exclusionary periods for group HMOs in California.
Indemnity, Preferred Provider Organizations (PPO) and Point of Service plans (POS)
Under California law AB 1672, the maximum pre-existing condition exclusionary period for group Indemnity, PPO or POS plans is six months. If the individual has had six months or more of previous coverage with no greater than a 180 day gap in prior coverage there is no pre-existing exclusionary period.
Self-Insured Trust
Self-Insured Trusts typically have a twelve month exclusionary period for a pre-existing condition.
Under the federal Health Insurance Portability and Accountability Act (HIPAA), previous monthly coverage that ended less than 63 days before access to new coverage provides months of credit. Each month of credit decreases the exclusionary period by one month.
Mike felt relieved after talking to Ralph. Now, he wanted to check with his doctor, whom he liked and trusted. The doctor’s office threw him another curve—the physician didn’t take HMO customers. The only coverage offered by Mike’s new employer that his doctor accepted was the Preferred Provider Organization plan. Confused, Mike called Ralph again for help.
Although PPO plans in California typically have exclusionary periods of six months for people with pre-existing medical conditions, Ralph explained that Mike qualified for full PPO coverage thanks to his brief stint at his other newspaper. This is because of California state law, AB 1672, which protects people who had at least six months of continuous health coverage within 180 days of signing up for the new health insurance benefits. Mike, of course, had those nine months at his other newspaper. This meant, Ralph said, Mike wouldn’t have any exclusionary period with his PPO and would be fully covered by his health insurance as soon as his coverage started.
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