Can my health insurance impose a 12-month preexisting condition waiting period if I had a year's continuous coverage before?

Before I entered graduate school, I was uninsured. I then had health insurance through my graduate school for 12 months (Aetna). Immediately after graduating, I got a job and am covered through them now (Blue Cross). There was no break in coverage between the two.

Two months before starting my new job, I had an abnormal pap smear; one month before, I had biopsies that showed mostly healthy cells, but a small portion of very mildly pre-cancerous cells. (A common condition that often goes away on its own). Since then I have been receiving extra diagnostic treatment to rule out cervical cancer. So far, the total cost is about $4,000. Blue Cross is now saying I had a preexisting condition, and is threatening to not cover any of it because they have a 12-month waiting period for preexisting conditions unless you had continuous coverage for 18 months before that.

I did some online research about HIPAA, however, and discovered this, both on the Department of Labor’s Web site and in a book about HIPAA:

"For those moving from one group plan to another group plan, or from individual to group coverage, the new plan **must reduce any preexisting condition limitation period by 1 month for every month that such individuals had creditable coverage under a previous plan**, provided that they enroll when first eligible and had no break in previous coverage of 63 or more continuous days. For example, individuals with 6 months of prior creditable coverage could face a maximum preexisting condition limitation period of 6 months. Individuals with 11 months of prior creditable coverage could face a maximum limitation period of 1 month. **Once a 12-month limitation period is met, no new limitation may ever be imposed as long as continuous coverage is maintained** (that is, there is no break in coverage lasting longer than 62 days), even if there is a change in jobs or health plans."

It looks to me that this indicates that it’s illegal for Blue Cross to impose a waiting period if I had 12 months’ continuous coverage before beginning coverage with them. Am I correct?

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