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What is a certificate of creditable coverage? Posted: October 25th, 2010

By Maryalene LaPonsie

Many families struggle with the high cost of health insurance, but those with pre-existing conditions face the most difficulty. Chronic conditions and disease diagnoses can make finding medical insurance difficult. In addition, individuals with pre-existing conditions may be subject to severely limited benefits during the first year of coverage. The good news is that providing proof of "creditable coverage" can reduce exclusion periods.

Understanding creditable coverage

Most health plans institute pre-existing condition exclusion periods. These periods can last 12-18 months depending on when you enroll in the plan. During this time, the insurance company will not pay any claims related to your pre-existing condition.

Fortunately, there is a way to reduce or even eliminate this exclusion period. When you provide proof of creditable coverage, your insurer must offset your pre-existing exclusion period with that time. In other words, if you have six months of creditable coverage, your insurer must reduce the length of your exclusion period by six months. If you have two years of creditable coverage, an insurer must start covering your pre-existing condition immediately.

Creditable coverage means that you have had health insurance previously without a significant break in medical coverage. A significant break is defined as a gap in medical coverage of 63 days or more. You can earn creditable coverage from almost any health insurance source including:

  • Medicaid
  • Medicare
  • Group health insurance
  • Individual health insurance
  • COBRA

How to prove creditable coverage

When you apply for new health insurance, you should provide a certificate of creditable coverage to reduce a pre-existing exclusion period. The certificate is a document that lists your medical coverage periods and is provided free of charge by your health insurer. Certificates are issued:

  • Automatically upon the loss of medical insurance coverage, even if you are eligible for COBRA benefits
  • Automatically upon the end of COBRA benefits
  • Upon request if you are leaving your job or otherwise expect to lose your coverage

For individuals eligible for COBRA, the certificate should be provided within 44 days and before your COBRA election notice date. For all others, the certificate is to be issued within a reasonable time frame. The certificate should include:

  • Start and end dates for your health coverage
  • Contact information for the health plan
  • Consumer information regarding rights provided under the Health Insurance Portability and Accountability Act (HIPAA)

In the event you do not receive a certificate or lose yours, you can still prove creditable coverage by providing documentation of health insurance premium payments, explanation of benefits or verification statements from your doctor or health plan.