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Health Insurance Laws: Who Regulates Them

 

Health insurance laws are regulated primarily by state governments, but the federal government has some control as well. Many standards such as discrimination are the same from state to state, but some regulations vary depending on the state. Some states put more of an emphasis on who can have access to coverage. States that wish to encourage entrepreneurship and small businesses can change their access laws in order to make it easier to obtain coverage. Another issue that varies is the regulation of rates. Some states uphold a higher regulation of premiums and restrict insurance companies on what they can charge the policy holders. The list of benefits that are covered by insurance can also be regulated to an extent by the state. This is called mandated benefits. The mandated benefits vary, but most states uphold basically the same standards. For example, most states provide protection for special populations such as dependent handicapped adults. When a dependent becomes an adult, he is usually dropped from his parents’ insurance plan when he reaches a certain age. These laws state that members of special populations cannot be canceled from their plan, even upon reaching adulthood, as long as the conditions in the policy contract are met.

 

Health Insurance Laws: State Regulations

Health insurance laws that vary by state also include the guaranteed issue qualification, which states that insurers cannot deny coverage to a company based on the health of its employees. Because of HIPAA, all states are required to enforce guaranteed renewability. Insurance companies cannot cancel their coverage upon an unfavorable diagnosis or a new medical condition as long as all other qualifications in the insurance contract are met. Many states incorporate rate bands. Insurance companies often vary the premium they charge based on the state of the policy holder and other circumstances. Rate band laws limit the amount that the premiums can vary from one policy holder to another. This approach sometimes raises the premium for all the policy holders in order to lessen the deficit for the insurance company. Some states do not allow a difference of rates from one person to another based on their medical condition. Each state makes its own decisions about health insurance laws. For example, South Carolina allows its insurance companies to consider the health conditions of its potential policy holders. Some states do not allow this as a factor in determining whether or not they will allow coverage.

 

Health Insurance Laws: Federal Regulations

The federal government has passed several health insurance laws to limit the amount of control that states have over insurance regulation. The Employee Retirement Income Security Act was passed in 1974. This act says that state governments cannot regulate the insurance benefits provided by private employers. COBRA, passed in 1986, secures the rights of employees and their families to keep their insurance for a short period of time after the termination of a job. This guarantee lasts up to 36 months, and the actual time varies depending on the situation. Congress also passed HIPAA in 1996, regulating some aspects of private health insurance.

 

Health Insurance Laws: HIPAA Protection

HIPAA requires that insurers provide coverage for at least some small businesses. It also regulates discrimination based on poor health and some preexisting conditions. This health insurance law states that insurers must provide their coverage on a guaranteed issue basis. Guaranteed issue means that insurance companies are not allowed to refuse coverage due to existing medical conditions. They are also not allowed to refuse coverage for a company based on the condition of its employees.

 

Health Insurance Laws: HHS

Although the federal government has enacted these laws, state governments are expected to enforce them. As a general rule, states comply and regulate these laws, but the U.S. Department of Health and Human Services (HHS) ensures that each state is abiding by them. Those states that choose not to incorporate these health insurance laws are regulated more closely by the HHS. Enter your zip code above to receive FREE health insurance comparison quotes!

 

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