Fair Credit Reporting Act of 1970 ***

MR. WATSON: Next, Fair Credit Reporting Act . Guys, know the following. The Fair Credit Reporting Act was designed to protect rights of people for whom a credit report or inspection report was going to be conducted.  They could say credit report, inspection report, investigation report or consumer report.  If it says the word “report,” they’re talking about the Fair Credit Reporting Act. You have certain rights.

• You have to be notified within three days that the report has been requested.
• You must be provided with the names of all the people contacted during the preceding six months.
• If, based on the inspection report, you are rejected, the insurance company must provide you the name and address of the consumer reporting agency that supplied the report. ***
• If requested by the applicant, they have the right to know what's in there. Credit reports requested by the consumer are supplied by the reporting agency, not the insurance company.
• You have the right to have any corrections made, that kind of stuff. That just protects consumers.

MR. WATSON: Does that make sense?

STUDENTS: Yes.

 

HIPAA Disclosures

MR. WATSON: It stands for the Health Insurance Portability and Accountability Act. It's a federal law designed to protect your privacy concerning the applicant's medical records and the sharing of this information. This information must be protected and if it accidentally gets out, insurance companies and medical providers must mitigate any harm to consumers. Your clients can refuse permission to share this information. They say, “refuse permission for the dissemination of the information,” which just means you’re allowed to tell the company they’re not allowed to share your health information with anyone.

Requirements Related to HIV/AIDS *****

This is specific to the health exam and will be covered again in the law chapter.

HIV testing:

The insurer must disclose its intent to test a person for HIV prior to testing for HIV/AIDS, and must get the person's written informed consent to administer the test. The written consent must include:

• an explanation of the test,
• its purpose,
• potential uses,
• limitations,
• meaning of its results and the
• right to confidential treatment of information.

An applicant shall not be notified of a positive test result by the insurer, but by a physician designated by the applicant or, in the absence of such designation, the Department of Health.

An insurer may inquire whether a person has been tested positive for exposure to the HIV infection, but sexual orientation may not be used in the underwriting process or in the determination of which applicants may be tested. Insurance companies are also not allowed to ask about the applicant’s sexual orientation or use personal information like address, beneficiary designation and so on to try to determine your sexual orientation.  Obviously, insurers must maintain strict confidentiality regarding test results. The only party outside of the insurance company or its employees, insurance affiliates, agents, or reinsurers who may receive information about the test results is the person tested and persons designated in writing by the person tested, such as the person's doctor. The insurer may not furnish specific test results for exposure to the HIV infection to an insurer industry data bank if a review of the information would identify the individual and the specific test results.

 

Restrictions on coverage exclusions and limitations *****

Insurance companies, including life insurance companies, must treat claims for HIV/AIDS like any other claim.

Subject to the total benefits limits in a health insurance policy, no health insurance policy may contain an exclusion or limitation with respect to coverage for exposure to the HIV infection or a specific sickness or medical condition derived from such infection, except as provided in a preexisting condition clause.

Benefits under a life insurance policy may not be denied or limited based on the fact that the insured's death was caused, directly or indirectly, by exposure to the HIV infection or a specific sickness or medical condition derived from such infection.

 

Prohibited cancellation for HIV or AIDS *****

Policies may not be canceled because of the diagnosis or treatment of HIV/AIDS.

No insurer shall cancel or nonrenew the health insurance policy of any insured because of the diagnosis or treatment of HIV or AIDS.

 

 

Classification of Applicants ***

MR. WATSON: Next, classification of applicants. This is a no-brainer. We are going to issue you

• preferred risk - lower premium
• standard risk - normal premium
• substandard risk - higher premium

or we're not going to issue you the policy. Do you agree?

STUDENTS: Yes.

MR. WATSON: What would my 24-year-old personal trainer get?

STUDENTS: Preferred, lower premium.

MR. WATSON: Very good. What would somebody a little overweight get?

STUDENTS: Standard, normal premium.

MR. WATSON: Somebody who is real overweight?

STUDENTS: Substandard, higher premium.

MR. WATSON: And if you are really overweight and on a bunch a medication, what would you get?

STUDENTS: Declined.