Individual Health Insurance Coverage
If you do not have, or have access to, employer-sponsored group health insurance, buying an individual health insurance policy from a private health insurance carrier is a good option. There are some alternatives to private individual health insurance coverage – such as COBRA, state continuation coverage, conversion, and the state uninsured risk pool plan - AccessTN.
Rights with Private Individual Health Insurance
In Tennessee, your ability to buy individual health insurance coverage depends on your health conditions. There are certain circumstances, however, when you must be permitted to buy private individual health insurance.
- In general, insurers that sell individual health insurance in Tennessee are free to turn you down because of your health conditions and other elements. When applying for individual coverage, you will be asked questions about health conditions you have now or have had in the past. Depending on your health status, health insurance carriers might deny you coverage or offer you a policy that has exclusions on what it covers.
- However, if you are HIPAA eligible individual health insurance carriers are not able to deny coverage. All health insurance carriers that offer private individual health insurance must offer HIPAA coverage. Health insurance carriers can offer all of their individual health insurance plans, the two most popular individual health insurance plans, or two plans specifically designed for HIPAA eligible clients – a “high” and a “low” option plan, whose benefits must be similar to those in their other plans. Health insurance carriers that do not designate two policies must offer you a choice of all their individual insurance policies. Plans marketed to HIPAA eligible individuals cannot impose pre-existing condition limitation periods.
HIPAA Eligibility
In Tennessee, if you are HIPAA eligible, you have the right to buy an individual health insurance plan and are exempted from pre-existing condition exclusion periods. To be eligible under HIPAA, you must meet each of the following requirements:
- have had 18 months of continuous creditable coverage, at least the last day of which was under a group health plan.
- have used up any COBRA or state continuation coverage for which you were eligible.
- not be eligible for Medicare, Medicaid or a group health plan.
- not have health insurance. (If you know your group coverage is about to terminate, you may apply for coverage for which you will become HIPAA eligible.)
- apply for health insurance for which you are HIPAA eligible within sixty-three (63) days of losing your prior coverage.
HIPAA eligibility ends when you enroll in an individual health insurance plan, because the last day of your continuous health insurance coverage must have been in a group health insurance plan. You may become HIPAA eligible again by maintaining continuous coverage and rejoining a group health insurance plan.
- Even if you are HIPAA eligible, health insurance carriers in Tennessee are not required to offer you family coverage when you buy individual health insurance. However, they must offer separate individual health insurance plans to each person in your family who is HIPAA eligible. Most health insurance companies will actually offer you family coverage if you ask.
- Under the Tennessee Code Annotated (T.C.A.), newborns and newly adopted children are required to be covered under your individual health insurance plan for the first thirty-one (31) days, if the plan covers dependents. The insurer may require that the parent enroll the child within the thirty-one (31) days in order to continue coverage beyond the thirty-one (31) days.
- Your disabled child may remain covered under your fully insured group health plan after he or she reaches the age at which dependent coverage is usually terminated. To qualify, your adult, disabled child must be incapable of self-support because of mental retardation or physical disability and must be chiefly dependent on you as policyholder for support. Proof of incapacity must be furnished within thirty-one (31) days of reaching the time limit and may be required periodically, but not more often than once every year.
What Does My Private Individual Health Insurance Plan Cover?
Tennessee does not require health insurance companies in the individual market to offer standardized policies. Health insurance carriers design different policies – you will have to read and compare them carefully – and we here at Harman Stone Corp. are pleased to be of any assistance we can. Tennessee does require all health insurance plans to cover certain benefits – such as mammogram and prostate cancer screenings. Check with us here at Harman Stone Corp. for more information and assistance.
Typical Plan Features of an Individual Health Insurance Policy
In-Network Out-of-Network
Annual Deductible
Individual $1,000 - $ 5,000 $2,000 - $10,000
Family $2,000 - $10,000 $4,000 - $20,000
Annual Out-of-Pocket Maximum
Individual $2,000 - $ 5,000 $4,000 - $10,000
Family $4,000 - $10,000 $8,000 - $20,000
Lifetime Maximum Benefit $1,000,000 - $5,000,000
Physician Visit
General Practitioner $25-50 Co-Pay Carrier Pays 60%
Specialist $35-75 Co-Pay Carrier Pays 60%
Preventative Care (Ages 7 and Up) Co-Pay, then 100% Carrier Pays 60%
up to$300 per Insured after Deductible
per Calendar Year up to $300 per Insured
per Calendar Year
Mammogram, Pap Smears,
PSA, Etc. Carrier Pays 80% Carrier Pays 60%
after Deductible
Child Preventative care
(6 and Under) Carrier Pays 80% Carrier Pays 60%
Immunizations for Children
(6 and Under) Carrier Pays 80% Carrier Pays 60%
Ambulance Carrier Pays 80% Carrier Pays 60%
after Deductible after Deductible
Emergency Room Visits Carrier Pays 80% Carrier Pays 80%
after Deductible after Deductible
for True Emergencies,
otherwise Pays 60%
Urgent Care Facilities Carrier Pays 80% Carrier Pays 60%
after Deductible after Deductible
for True Emergencies,
otherwise Pays 60%
Inpatient Hospital Services Carrier Pays 80% Carrier Pays 60%
after Deductible after Deductible
Outpatient Surgery Carrier Pays 80% Carrier Pays 60%
after Deductible after Deductible
Outpatient Lab, X Rays,
Ultrasound, MRI and CT Scan Carrier Pays 80% Carrier Pays 60%
after Deductible after Deductible
Physical, Occupational and
Speech Therapy Carrier Pays $30 Maximum per Visit per Insured
Durable Medical Equipment Carrier Pays 80% Carrier Pays 60%
after Deductible after Deductible
Mental Health and Substance
Abuse - Inpatient Carrier Pays 80% Carrier Pays 60%
after Deductible after Deductible
Mental Health - Outpatient Carrier Pays 80% Carrier Pays 60%
after Deductible after Deductible
Prescription Drugs
Retail Pharmacy
Brand Name Deductible $100 Deductible
Generic / Brand Name /
Non Preferred Brand Name $10 / $35 / $60 Carrier Pays 50%
Self Injectables Carrier Pays 70% Carrier Pays 50%
Mail Order Pharmacy
Generic / Brand Name /
Non Preferred Brand Name $25 / $85 / $150 Not Covered
per 90 Day Supply
Self Injectables Carrier Pays 70% Not Covered
Coverage for Pre-Existing Conditions
- If you are HIPAA eligible no pre-existing condition exclusion periods or elimination riders can be imposed on your individual health insurance plan.
- For individuals who are not HIPAA eligible, individual health insurance plans can impose elimination riders. This is an amendment to your policy that permanently excludes coverage for a health condition or even an entire body part or system. Elimination riders can be applied even if you have prior creditable coverage.
- If you who are not HIPAA eligible, individual health insurance plans can also impose pre-existing condition exclusion periods. These periods cannot exceed two years. There is a different definition of a pre-existing condition is different under individual health insurance than under group health plans. Individual health insurance carriers can count any condition as pre-existing, which you received, or - in the carrier’s judgment, you should have sought – a diagnosis, medical advice, or treatment prior to taking out the individual health insurance plan. This is called a “prudent man standard.” There is no limit as to how far a health plan can look back to see if you had a pre-existing condition.
- If you make a claim during the first two years of coverage, the health insurance company can look back to see if the claim is for something that would have been considered a preexisting condition. If the health insurance company determines, utilizing the “prudent man standard,” that a condition is pre-existing, it can deny that claim.
- Pregnancy can be considered a pre-existing condition by individual health insurance companies. However, genetic information cannot be used as the basis for a preexisting condition exclusion.
- Unlike group health insurance plans, individual health insurance carriers do not have to give you credit for prior coverage.
How Much can I be Charged for Individual Health Insurance Coverage?
- If you have a serious health condition, your individual health insurance premiums may be more costly. Tennessee law does not prohibit health insurance companies from charging you more because of your health condition.
- When renewing your individual health insurance plan, premiums can also increase. Age and other factors increase your premiums at renewal. Additionally, if you have a health condition and the rates for your individual health insurance policy have increased, you may not be able to switch to a cheaper plan.
Can an Individual Health Insurance Policy be Cancelled?
- Coverage cannot be cancelled because you get sick, this is called “guaranteed renewability.” You have this insurance protection; provided you pay the premiums, do not commit fraud against the health insurance company, and, with HMO’s, continue to reside in the service area.
- Some health insurance carriers offer temporary health insurance plans. Temporary policies are non-renewable. They only cover you for a limited time, such as six months. If you want coverage under a temporary policy after it expires, you will have to apply for a new contract. Many times, it is better and simpler to apply for a regular individual health insurance plan.
COBRA AND STATE CONTINUATION COVERAGE
When am I eligible for COBRA Coverage?
If you are leaving your job and you had group coverage, you may be able to stay in your group plan for an extended time through COBRA or state continuation coverage.
To qualify for COBRA continuation coverage, you must meet three criteria:
- First, you must worked for a business with twenty (20) or more employees on a majority of business days in the previous calendar year. If you work for an employer with fewer employees, you may qualify for state continuation coverage.
- Second, you must have been covered under the employer’s group health plan as an employee or as the spouse or dependent child of an employee.
- Finally, you must have a qualifying event that would cause you to lose your group health insurance coverage. See Harman Stone Corp. COBRA page for additional information.
COBRA QUALIFYING EVENTS
For Employees
- Voluntary or involuntary termination of employment for reasons other than gross misconduct
- Reduction in numbers of hours worked
For Spouses of Employees
- Loss of coverage by the employee because of one of the qualifying events already listed above
- Covered employee becomes eligible for Medicare
- Divorce or legal separation of the covered employee
- Death of the covered employee
For Dependent Children
- Loss of coverage because of any of the qualifying events listed for spouses
- Loss of status as a dependent child under the plan rules
- Each individual who is eligible for COBRA continuation can make his or her own decision. If dependents were covered under the employer plan, they may independently elect COBRA coverage as well.
- To qualify as HIPAA eligible, you must choose and use up any COBRA or state continuation coverage available to you.
- You must be notified of your COBRA rights when you join the group health plan, and again if you qualify for COBRA coverage. The notice rules are somewhat complicated and you should contact Harman Stone Corp.
Generally, if an event that qualifies you for COBRA coverage involves the death, termination, reduction in hours worked, or Medicare eligibility of a covered employee, the employer has thirty (30) days to notify the group health plan of this event. However, if the qualifying event involves divorce, legal separation, or loss of dependent status, you have sixty (60) days to notify the group health insurance plan. Once it has been notified of the qualifying event, the group health insurance plan has fourteen (14) days to send you a notice about how to elect COBRA coverage. Each member of your family eligible for COBRA coverage then has sixty (60) days to make this election. Once you elect COBRA, coverage will begin retroactively to the qualifying event. You will have to pay premiums dating back to this period, plus a two percent (2%) administrative fee.
SPECIAL SECOND CHANCE TO ELECT COBRA FOR TRADE DISLOCATED WORKERS
- A second COBRA election period may be available for Trade Adjustment Assistance (T.A.A.) eligible individuals who did not elect COBRA when it was first offered. The second election period can be exercised sixty (60) days from the first day of TAA eligibility, but in no case later than six (6) months following loss of coverage. When elected during this second election, coverage begins retroactive to the beginning of the special election period – not back to the qualifying event.
- Certain individuals who lost their employer-sponsored health coverage because of the impact of imports on their employers have a limited second chance to elect COBRA. Individuals who are receiving benefits from the TAA Program are eligible for a federal income tax credit (Health Coverage Tax Credit, or H.C.T.C.) that will pay sixty-five percent (65%) of their premiums.
- For some laid-off workers, T.A.A. benefits begin after their sixty-(60)-day period to elect COBRA continuation coverage has expired. In this circumstance, TAA-eligible individuals have a second sixty-(60)-day period, starting on the date of their T.A.A. eligibility, to elect COBRA. In no case, however, can COBRA be elected more than six (6) months following the original qualifying event, such as a layoff, that caused the loss of group health insurance plan coverage.
- When COBRA is elected during this special, second election period, coverage will start on the first date of the special election period. Time that has elapsed between the original qualifying event and the first date of the special election period is not counted as a lapse in coverage in determining continuous coverage history.
COBRA Coverage
Covered health benefits under COBRA will be the same as those you had before you qualified for COBRA. If you had coverage for medical, hospitalization, dental, vision, and prescription drug benefits before COBRA, you can continue coverage for all of these benefits under COBRA. If these benefits were covered under more than one plan, such as a separate health insurance and dental insurance plan, you can choose to continue coverage under any or all of these plans.
Life insurance is not covered by COBRA.
If an employer changes the health benefits package after a qualifying event, they must offer coverage identical to that available to other active employees who are covered under the plan to those COBRA electees.
COBRA Coverage for Pre-Existing Conditions
Because your group health insurance coverage is continuing, you will not have a new preexisting condition exclusion period under COBRA. However, if you were midway of a pre-existing condition exclusion period when your qualifying event occurred, you will be required to finish it.
CHARGE FOR COBRA COVERAGE
- You must pay the entire premium, employer and employee share, plus a 2% administrative fee for COBRA continuation coverage.
- If you elect the 11-month disability extension, your premium will increase to 150% of the total cost.
- If you lost your group health insurance and are receiving benefits from the Trade Adjustment Assistance (TAA) Program, you may be eligible for a federal income tax credit to help you pay for new health coverage. This is called the Health Coverage Tax Credit (HCTC), and it is equal to sixty-five percent (65%) of the cost of qualified health coverage, including COBRA.
- Also, If you are retired, aged 55-65, receiving pension benefits from PBGC, and receiving benefits from the T.A.A. Program, then you may be eligible for a federal income tax credit to pay for new health coverage.
COBRA Coverage Benefit Period
For the most part, COBRA coverage lasts up to eighteen (18) months and cannot be renewed. However, qualifying disabled individuals can opt for coverage up to twenty-nine (29) months, and dependents are sometimes eligible for up to thirty-six (36) months of COBRA continuation coverage, depending on their qualifying event. Additionally, special rules for disabled individuals may extend the maximum period of coverage to twenty-nine (29) months. To qualify for a disability extension, you must have been disabled at the time of your Qualifying Event, such as termination of employment or reduction in hours. You need to obtain a disability determination letter from the Social Security Administration, and you must notify your group health plan within sixty (60) days of this disability determination.
HOW LONG CAN COBRA COVERAGE LAST?
Qualifying event(s) Eligible person(s) Coverage
Termination Employee 18 months *
Reduced hours Spouse
Dependent child
Employee enrolls in Medicare Spouse 36 months
Divorce or legal separation Dependent child
Death of covered employee
Loss of “dependent child” status Dependent child 36 months
* Special rules may extend coverage an additional 11 months for certain disabled individuals and their eligible family members.
- COBRA continuation coverage usually ends when you join a new health insurance plan. However, if your new health insurance plan has a waiting period or a pre-existing condition exclusion period, you keep whatever COBRA continuation coverage you have during that period. For specifics, contact Harman Stone Corp..
- COBRA coverage also ends if your employer terminates offering health benefits to other employees.
- COBRA coverage might end if you are in an HMO that is available only to individuals living in a limited area and you move out of that area. However, if you are eligible for COBRA and are moving out of your current health insurance plan’s service area, the employer must provide you with the opportunity to switch to a different plan, but only if the employer already offers other plans to its employees.
Tennessee State Continuation Coverage
If you were covered under a fully insured group health plan for 3 months or more and lost that coverage, you may be eligible for up to three (3) months of continuation coverage under the same group plan. In addition, if you are a spouse or a dependent that lost coverage because of the death or divorce, you may be eligible for up to fifteen (15) months of continuation coverage. Ask your former employer or contact Harman Stone Corp. to see if this applies to you.
Conversion
When you leave group health insurance coverage, you may be able to buy a conversion policy. This is an individual health insurance plan from the health insurance carrier that covered your former group health insurance plan.
- If you were covered under a fully insured group health insurance plan for three (3) months, you may be able to buy a conversion policy. You buy conversion policies if you lost your group coverage because you left your job or because the group health insurance coverage was terminated. However, before being eligible for a conversion policy, you must exhaust COBRA or state condition coverage that is available to you. If the group health insurance coverage was terminated, you will immediately have the right to buy a conversion policy. If you had family health insurance coverage under your prior group health insurance plan, your dependents can elect conversion coverage as well.
- You do not need to be HIPAA eligible to buy conversion policies. However, if you do elect a conversion policy, you lose your HIPAA eligibility status.
Conversion Policy Coverage
The benefits under a conversion policy probably will not be the same as those under your former group health insurance plan. The conversion policy’s benefits may be less generous than those you used to have.
Conversion policies cannot impose a new pre-existing condition exclusion period. However, you might have to satisfy the unexpired portion of any pre-existing condition exclusion period from your former group health insurance plan.
Conversion policies may cost much more than your previous group health insurance plan. There is no limit on what you can be charged for a conversion policy. You may be charged higher rates based on your health, age, gender, and other factors.
Conversion policies are guaranteed renewable. Your coverage cannot be cancelled because you get sick. This is called guaranteed renewability. You have this health insurance coverage provided that you pay the premiums, do not commit fraud against the health insurance company, and with HMO’s, continue to live in the health insurance plan service area.
AccessTN
Tennessee has an uninsurable high-risk pool, called AccessTN, to provide coverage for individuals who are unable to buy private health insurance because of their health condition. Coverage can be purchased from AccessTN if you meet certain qualifications. You must have lived in Tennessee for at least six (6) months, been uninsured for the past six (6) months, and exhausted COBRA or state continuation coverage. Additionally, you must be able to prove medical eligibility. There are three ways you can prove eligibility:
- You have been turned down for coverage by two (2) insurance companies;
- You have been diagnosed with one of fifty-five (55) specified health conditions, including cancer and AIDS.
- You have gone through AccessTN underwriting and been found to be medically eligible.
If you were offered COBRA or state continuation coverage within the twelve (12) months and you did not elect it, you will not be eligible for AccessTN for twelve (12) months. AccessTN only offers individual coverage. If you need to purchase family coverage, each member of the family will need to apply and qualify on their own for an AccessTN health insurance policy.
There are three plan options under AccessTN. Covered benefits are the same under all three plans, but deductibles and cost sharing varies. There is a choice of PPO plans with deductibles of $1,000, $2,500, and $5,000. Most services provide coverage at 80% for in-network and 60% for out-of-network. Covered benefits include hospital and physician care, prescription drugs, chemotherapy and radiation treatment, and mental health and substance abuse services. There is a $1 million lifetime limit.
You may have a three (3) month pre-existing condition exclusion period when you first enroll in AccessTN. When you enroll, AccessTN will look back six (6) months to see if you had a condition for which you actually received – or for which a prudent individual would have sought – a diagnosis, medical advice, or treatment. This is called the “prudent man” rule. Pregnancy can be considered pre-existing.
Premiums vary based on your age, weight, smoking, and the plan you choose. For example, the monthly premium for a 23-year-old range from $261 to $489, depending on the coverage option selected. The monthly premium for a 62-year-old may range from $519 to $989.
AccessTN policies are renewable as long as premiums are paid, and the insured meets other eligibility requirements.