What is a Letter of Creditable Coverage and why do I need one?

My husband just got a new job after almost a year of being unemployed. I’m so excited to have health insurance again. We signed up with the new company and right away got a request from them for a Letter of Creditable Coverage. What is this and why do they need it? Relieved but Hassled.

Dear Relieved but Hassled,
Congratulations on surviving a year of having an unemployed spouse. And now onward to new horizons, complete with paperwork hassles.

A Letter of Creditable Coverage — sometimes called a Certificate of Creditable Coverage — comes from your previous health insurer. It tells your new health insurer when you last had health insurance. It also lists who was on your old plan, what dates your plan started and stopped, and a few other miscellaneous details. (None have anything to do with your health status or ongoing illnesses.)

The reason your new insurer wants this letter (or certificate) is to see if you have had a 63-day gap between plans. If you have gone without health insurance for 63 days or more, then your new plan can refuse to pay medical bills for your curent health problems. For example, if your husband had asthma, your new plan can turn down his bills for asthma. These are called “pre-existing conditions”, meaning that the illness existed before you were covered by the new plan.

The new plan can turn down these bills only for the first 12 months you are covered.

If you haven’t had any gaps or your gap was less than 63 days, your new plan will pay for all of your health issues — no matter when they started.

Recommend this article
Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.