Under HIPAA, an individual's 'creditable coverage' is used to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
HIPAA's portability rules limit the impact of preexisting condition exclusions when a person moves between group health plans. Prior coverage under another employer plan, COBRA, Medicaid, Medicare, or certain other arrangements counts as creditable coverage and is credited against the new plan's preexisting exclusion period, so the exclusion cannot exceed the coverage the person has already satisfied. If the individual maintains continuous coverage without a significant gap, the new plan may impose little or no exclusion at all. This portability of prior coverage is the centerpiece of HIPAA's group market protections and is tested directly on the A&H exam.
Why the other options are wrong
- B) HIPAA portability concerns continuity of health coverage from plan to plan. Cash values are a life insurance concept and have nothing to do with HIPAA's group health rules.
- C) HIPAA credits prior coverage against preexisting exclusions; it does not forgive premiums the employee owes under a new employer's plan, which remain the employee's responsibility.
- D) Medicare work credits are earned through covered employment and payroll taxes over a lifetime. They are unrelated to HIPAA creditable coverage for health insurance portability.
Memory hook
HIPAA credits = your old coverage carries over like store credit against the new plan's waiting period.