Creditable Coverage

Creditable coverage is the time spent covered under a previous health insurance which is used to offset a pre-existing condition exclusion period in the new health coverage. The span of time which you had “credible” health coverage is used to satisfy another waiting period when changing health insurance. This is designed to protect individuals who change health plans by enjoying continuous coverage of health insurance. Creditable coverage is mainly applicable to persons who are joining new employer-sponsored group health coverage and had been enrolled in health coverage with the previous employer. The provisions in the certificate of creditable coverage provides that if a person is continuously insured in a health insurance policy for 1 year and 6 months or at least an overall number of 18 months, he or she may continuously enjoy the coverage without being required to satisfy a waiting period after changing health insurance. Many group health plans have 6 months waiting period but the maximum waiting period length is 18 months. It is important that the continuous coverage is not interrupted; continuous coverage is jeopardized when the break or gap of coverage is more than 63 days or more. If in your former employment you spent at least a full year of coverage and you enrolled in a new health policy, as long as the gap of coverage is not interrupted your new health plan cannot subject you to another waiting period.

For example, to grab better opportunities you decided to transfer from one employer to another. Four weeks after the effectivity of your resignation from your previous job which you spent 3 years of your life working with, you found a job which offers similar health insurance plan where you enrolled in a family health plan. Provided that you are perfectly healthy but a member of your family has a medical illness, you and the member of your family will still enjoy continuous coverage because the break is just four weeks which is less than the 63 days gap period.

It is important to note that short term medical insurance coverage and most of the lower cost individual health plans don’t cover pre-existing medical conditions. Creditable coverage is not applicable when the new health plan does not cover other benefits or when a health plan only consists of limited benefits such as cancer policies or vision and dental health coverage.

The certificate of creditable coverage is also designed to provide convenience to the health members. The health plan members commonly don’t go through any hassles in getting the certificate. Every health insurance company automatically generates the certificates of creditable coverage within a few weeks after the member’s termination. The certificate can be obtained by mail and is provided anytime within 30 days of termination. If in case you do not receive the certificate within the expected time specified, you may then ask for assistance from your insurance company and verify if your mailing address is correct. Many insurance companies nowadays however are aiming to deliver the certificates online or through internet download.