Table of Contents
- What You Need to Know About Health Insurance
- Health Insurance Options
- COBRA and Cal-COBRA
- The Health Insurance Portability and Accountability Act (HIPAA)
- Unfair Claims Practices
- What You Need to Know About Life and Disability Income Insurance
- Viatical Settlement and Life Insurance
- In Summary
- Glossary of Terms
Since the first diagnosed case of HIV/AIDS over twenty years ago, there have been many remarkable advances in treating the disease. The life expectancy for many people living with HIV/AIDS has increased dramatically. The continuing hope is that medical science will find a cure for HIV/AIDS or at least be able to develop treatment therapies that cause the disease to be treated as a chronic condition.
While public attitudes regarding HIV/AIDS have changed for the better because of education and exposure, many of the concerns surrounding HIV/AIDS diagnosis and treatment remain the same. The cost of life-saving drugs and treatment regimens are still very expensive. Also, people living with HIV/AIDS often face discrimination because of ignorance about the disease.
The California Department of Insurance (CDI) believes that it is crucial for people living with HIV/AIDS to know their insurance rights. Being informed of your insurance rights can help you take charge of your future and allow you to effectively manage HIV/AIDS.
What You Need to Know About Health Insurance
When applying for health insurance, an insurance company may ask questions regarding your medical history to help determine coverage eligibility. Medical records from your physician(s) may be requested as part of the underwriting process. Insurance companies rely upon accurate information to make their underwriting decisions. If the insurance company discovers that you did not accurately report your medical history on the application, your policy can be canceled or rescinded.
A health insurance company cannot require you to disclose your HIV status or to take an HIV test as part of the application process (see California Insurance Code [CIC] Section 799.09). However, it can ask if you have received medical treatment for AIDS, AIDS-related complex (ARC), or an immune system disorder other than HIV/AIDS. It may also ask you if you are taking or have taken HIV/AIDS medications. Since HIV infection is not a diagnosis of AIDS or ARC, a health insurer cannot deny health coverage solely because an applicant is HIV positive. If an applicant has been treated for AIDS or ARC, a health insurer can deny coverage based on a preexisting medical condition. CIC Section 10291.5(c)(2) requires that all applications for health insurance (excluding guaranteed issue) prominently display the following notice: "California law prohibits an HIV test from being required or used by health insurance companies as a condition of obtaining health insurance coverage."
If your application for health insurance is declined, you may request the specific reasons for the declination in writing. It is important to remember that an insurance company cannot refuse an application for coverage on the basis of an applicant's race, color, religion, national origin, ancestry, or sexual orientation, nor can they charge higher premiums based on these criteria.
If you have been turned down for health insurance because of a preexisting condition (such as treatment for AIDS or ARC), you may want to consider the following options in an effort to obtain health insurance and/or drug therapy assistance:
Small Group Insurance
Medical underwriting rules for small group health insurance (2-50 people) differ from large group and individual health insurance policies. Regardless of any preexisting condition, you must be offered coverage under a small group policy on a guaranteed issue basis. The application may still contain health questions and a request for medical records or past medical history. If you can gain employment with a small employer who offers small group health insurance, then you must be accepted onto the plan. However, the small group insurance company can utilize a six-month waiting period for preexisting conditions. If you have prior group health insurance (creditable coverage) without a break of more than 180 days, it must be applied to decrease or eliminate the waiting period. For more information about creditable coverage and waiting periods for individual and group health insurance coverage (both small and large group), please review the "Consumers Guide to Health Insurance".
The Major Risk Medical Insurance Program (MRMIP) offers limited health insurance benefits to California residents who are unable to purchase health insurance due to a preexisting medical condition. If you have a preexisting condition and are not eligible for COBRA, Cal-COBRA, or HIPAA, then you can apply to MRMIP as a last resort to obtain health coverage. This program provides health care coverage through contracted health insurance companies and health plans. MRMIP is partially subsidized; however, qualifying participants must pay a portion of the premium, which can be costly. MRMIP is under the jurisdiction of the Managed Risk Medical Insurance Board (MRMIB). Please see the "Resources" section for MRMIB contact information.
The California Department of Health Services (DHS) oversees the Medi-Cal program. Medi-Cal is California's Medicaid health care program and is supported by federal and state tax dollars. This program pays for a variety of medical services for people with limited income and resources and/or disabled individuals regardless of any preexisting health condition. If you are eligible, you can receive Medi-Cal benefits as long as you continue to meet the eligibility requirements. Medi-Cal is managed through your local county welfare/social services department. Contact your County Department of Public Social Services for current eligibility information or see the "Resources" section under DHS for related Medi-Cal contacts.
The DHS also operates the Office of AIDS for California residents. The Office of AIDS creates educational materials and compiles statistical information regarding HIV/AIDS. Their efforts target publicly-funded HIV/AIDS care and treatment programs and critical prevention strategies aimed to interrupt HIV/AIDS transmission. The AIDS Drug Assistance Program (ADAP) falls under the control of the Office of AIDS.
The ADAP was established in 1987 to help provide HIV/AIDS drug therapy access to individuals who are uninsured or underinsured of low-to-moderate income levels. ADAP is a state prescription drug program that is jointly funded by Ryan White CARE legislation and state funds. The goal of the ADAP is to make available drug treatments that can reliably be expected to increase the duration and quality of life for those living with HIV/AIDS. For ADAP eligibility requirements, please refer to the "Resources" section for contact information.
Since the onset of HIV/AIDS, many private clinics and support organizations have been created that provide services to people living with HIV/AIDS. These clinics and organizations can be an excellent source of information on a variety of HIV/AIDS related issues, including access to health care. Some private clinics provide basic health care services to HIV/AIDS patients and can provide contact information for drug trials and experimental treatment protocols that can sometimes provide complete medical services for qualified study participants. Please see the "Resources" section for a list of California HIV/AIDS related organizations.
When you are covered under a group health insurance policy from your employer, you have certain rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA is a federal law that extends your current group health insurance when you experience a qualifying event such as termination of employment or reduction of hours to part-time status. By electing COBRA you extend your current group coverage and maintain continuity of care, which can be very crucial when undergoing treatment for HIV/AIDS. The extension period for COBRA is 18 months and some people with special qualifying events may be eligible for a longer extension.
To be eligible for COBRA, your group policy must be in force with 20 or more employees covered on more than 50 percent of its typical business days in the previous calendar year. Indemnity policies, PPOs, HMOs, and self-insured plans are eligible for COBRA extension; however, federal government employee plans and church plans are exempt from COBRA. Individual health insurance is also exempt from COBRA, which may be an important reason to pursue participation in an employer group health plan if one is available to you.
Cal-COBRA is a California law that has similar provisions to federal COBRA. With Cal-COBRA, the group policy must be in force with 2-19 employees covered on at least 50 percent of its working days during
- the preceding calendar year, or,
- the preceding calendar quarter, if the employer was not in business during any part of the preceding calendar year.
Eligibility for Cal-COBRA extends to indemnity policies, PPOs, and HMOs only. Self-insured plans are not eligible. Unlike COBRA, church plans are eligible under Cal-COBRA. It is important to note that both COBRA and Cal-COBRA do not apply to individual health insurance. The extension period for Cal-COBRA is 36 months. California Insurance Code (CIC) Section 10128.59 provides a similar extension under Cal-COBRA for those who have exhausted their 18 months on federal COBRA (or longer in special circumstances) for a total extension that cannot exceed 36 months for COBRA and Cal-COBRA combined. For Cal-COBRA to apply, the employer's master policy must be issued in California. If the group master policy is not issued in California, then the employer must employ 51% or more of its employees in California and have its principal place of business in California.
It is important to note that healthcare jurisdiction in California is divided between both state and federal agencies. COBRA is regulated by the U.S. Department of Labor, Employee Benefits Security Administration (DOL-EBSA) and Cal-COBRA is jointly regulated by the CDI and the California Department of Managed Health Care (DMHC) depending upon what type of group coverage you have (indemnity or HMO). These agencies can provide further information on the time frames employers and insurance companies/health plans must follow to offer COBRA or Cal-COBRA extension coverage for eligible employees and their dependents.
If you have questions or problems with COBRA or Cal-COBRA, you can reach the appropriate state of federal agency by referencing the contact information available in the "Resources" section. Also, you may wish to review the "Consumers Guide to Health Insurance" for a more detailed explanation of indemnity health insurance, HMOs, PPOs, and self-insured health plans.
In 1996 the federal government passed into law the Health Insurance Portability and Accountability Act (HIPAA). HIPAA law provides eligible individuals who have recently lost their employer-sponsored group health insurance the opportunity to purchase health insurance coverage even if they have a preexisting health condition, which includes treatment for AIDS or ARC. If you meet the definition of an eligible individual, all health insurance companies and health plans that sell individual coverage must offer you health insurance regardless of your medical history. This requirement to issue insurance is called "guaranteed issue." In order to qualify as an eligible individual, you must meet the following conditions:
- Your last health care coverage must have been under an employer sponsored group health plan, which includes COBRA or Cal-COBRA continuation coverage, for at least 18 months. This prior 18-month coverage is referred to as "creditable coverage."
- All available COBRA or Cal-COBRA continuation coverage has been elected and exhausted. If you qualify for COBRA or Cal-COBRA you are required to accept (elect) the coverage and continue the coverage for the maximum time period allowed (exhaust the coverage). (When an employer terminates its existing group health plan entirely, COBRA or Cal-COBRA coverage ends and is considered exhausted.)
- You are not eligible for coverage under a group health plan, Medicare, Medi-Cal, and /or do not have other health insurance.
- You did not lose your most recent health coverage due to nonpayment of premium or fraud.
Once COBRA or Cal-COBRA has been exhausted, you have 63 days to file an application to purchase a guaranteed issue HIPAA policy with an insurance company or health plan. All carriers that sell individual health care policies must offer their two most marketed individual plans to HIPAA eligible individuals. If you accept a conversion policy or a short-term policy after exhausting COBRA or Cal-COBRA, you give up your HIPAA eligibility. It is important to understand that a conversion policy is not a HIPAA policy.
Although HIPAA is a federal law, as of January 1, 2001, the responsibility for enforcing HIPAA (in regards to guaranteed issue health insurance) within the state of California was transferred to the CDI and the DMHC. Depending on the type of coverage you have, you can contact either the CDI (indemnity) or the DMHC (HMO) if you are experiencing problems securing a HIPAA policy.
The CIC provides consumer protection against several actions that are considered unfair claims settlement practices on the part of insurers. In the case of HIV/AIDS-related hospital, medical, or surgical claims, CIC Section 790.03(h)(16) states that "delaying the payment of …[HIV/AIDS-related] benefits for services provided …for more than 60 days after the insurer has received a claim for those benefits, where the delay in claim payment is for the purpose of investigating whether the condition preexisted the coverage" is to be considered an unfair claims settlement practice. It is important to note that the 60 days does not include any time that the insurer is waiting for relevant medical information requested from a health care provider.
If you believe that an insurance company is involved in unfair claims practices stemming from your HIV/AIDS status, or that you are being mistreated in any way by your insurance company due to your health status, then contact the CDI immediately.
When you apply for a life or disability income insurance policy, an insurance company can request a physical examination, which may include an HIV antibody test. An insurance company that requests you to take an HIV antibody test is required to get your written informed consent to conduct the test. CIC Section 799.03 states that "written informed consent shall include a description of the test to be performed, including its purpose, potential uses, and limitations, the meaning of its results, procedures for notifying the applicant of the results, and the right to confidential treatment of the results." If you test positive for HIV antibodies, the life or disability income insurance company can deny your application for insurance. It can also deny coverage if you refuse to provide your written informed consent to take an HIV antibody test. The life or disability income insurance company must pay for the cost of the HIV antibody test.
Further questions on life and disability income insurance concerning HIV/AIDS related topics can be addressed by contacting the CDI at its toll free hotline number. Also, for general information on life insurance, including product descriptions and glossary, review the Life Insurance and Annuities guide.
Viatical settlement purchasers buy life insurance policies that are based on the lives of people with catastrophic or life-threatening illnesses or conditions. If the policyholder has heart disease, for example, the settlement may be considered a viatical settlement. Selling your life insurance policy provides you with a cash settlement that can be used in any way you see fit. Even though a settlement is called a "life settlement," or other names, it may still be considered a "viatical settlement" under California law.
If you are considering selling your life insurance policy to a viatical settlement purchaser, you should contact your life insurance company directly to determine if they offer an accelerated benefit, a living death benefit, a loan, or cash value for the policy. The terms and conditions offered by the insurance company for these types of similar benefits may be better than those offered by a viatical settlement purchaser. By comparing, you may be able to receive a larger amount of money for your life insurance policy.
People who "enter into" or "solicit" viatical settlements from policyholders must be licensed by the CDI. For example, a person who assists an insured or policyholder in selling their policy, a purchaser of the policy, and a person soliciting investments in a viatical settlement transaction must all be licensed by the CDI. Consumers should check the license status of the parties involved with the CDI. For more information on viatical settlements please review the Viatical Settlements guide.
Health, life, and disability income insurance can play a major role for people living with HIV/AIDS. Knowing your insurance rights and being able to properly utilize the coverage you have can assist you in staying healthy and in maintaining the quality of your life. The CDI is dedicated to people living with HIV/AIDS and is available to answer any HIV/AIDS questions relating to insurance. Please feel free to contact us by calling the CDI toll free number (800) 927-HELP (4357).
AIDS Project Los Angeles (APLA)
611 S. Kingsley Drive
Los Angeles, CA 90005
Department of Health Services
P.O. Box 997413
Sacramento, CA 95899-7413
- Office of AIDS
611 North 7th Street
Sacramento, CA 95814
- AIDS Drug Assistance Program (ADAP)
Public Health Service Bureau
- California Department of Public Social Services
744 P Street
Sacramento, CA 95814-5512
Contact Your Local County Social Services for Eligibility
U.S. Department of Labor
Employee Benefits Security Administration (DOL-EBSA)
- Northern California
90 7th St. Suite 11-300
San Francisco, CA 94103-2050
Phone: 415-975-4600 or 415-625-2481
- Southern California
1055 E. Colorado Blvd., Suite 200
Pasadena, CA 91106-2341
Toll Free Number: 866-275-7922
Department of Managed Health Care (DMHC)
980 Ninth Street, Suite 500
Sacramento, CA 95814
Managed Risk Medical Insurance Board (MRMIB)
Major Risk Medical Insurance Program (MRMIP)
P.O. Box 9044
Oxnard, CA 93031
Minority AIDS Project (MAP)
5149 West Jefferson Blvd.
Los Angeles, CA 90016
San Francisco AIDS Foundation
995 Market Street, Suite 200
San Francisco, CA 94103
California HIV/AIDS Hotline
Creditable Coverage or Prior Qualifying Coverage - A written statement from your prior insurance company or health plan documenting the length of time you were covered.
Coverage - The scope of protection provided by an insurance contract which includes any of the listed benefits in an insurance policy.
Declination - The rejection by an insurance company of an application for a policy.
Experimental and/or Investigational Medical Services - A drug, device, procedure, treatment plan, or other therapy that is currently not within the accepted standards of medical care. (Please contact the CDI for information on the Independent Medical Review [IMR] program.)
Guaranteed Issue - A health insurance policy that must be issued regardless of any preexisting medical condition. The present and past physical condition of a health insurance applicant is not considered as part of underwriting. No physical examination is required. The insurance company cannot decline coverage to an applicant of a guaranteed issue policy based on medical history.
Policy - The written contract between an individual or group policyholder and an insurance company. The policy outlines the duties, obligations, and responsibilities of both the policyholder and the insurance company. A policy may include any application, endorsement, certificate, or any other document that can describe, limit, or exclude coverage benefits under the policy.
Preexisting Condition - Any illness or health condition for which you have received medical advice or treatment during the six months prior to obtaining health insurance. Group healthcare policies cover preexisting conditions after you have been insured for 6 months, and individual policies cover preexisting conditions after you have been insured for 1 year. Reference CIC Section 10198.7.
Recision -The cancellation of an insurance policy back to its effective date resulting in a return of all premium charged.
Underwrite - The process to evaluate the insurance application and independent sources in order to verify the information provided and to determine the acceptability of the risk.