Just got devastating news - UPDATE

[Ms. Toad]

155. Different portions of HIPAA provide different benefits

One (described on the page you linked to) lets you transfer from one employer's insurance to another employer's insurance without a waiting period for pre-existing conditions to be covered (assuming you had been covered in the past) - or decreasing the waiting period if there was a gap in coverage.

The second aspect of HIPAA is the circumstance the friend was in. She has prior group coverage and exhausted COBRA. At that time the HIPAA individual insurance option kicked in People who are "HIPAA-eligible and are guaranteed the right to purchase some form of individual insurance coverage without preexisting condition exclusions under HIPAA if they meet the following criteria:

1) they have had at least 18 months of previous health insurance coverage without a break in coverage lasting 63 days or more;
2) their most recent period of coverage was under an employer-sponsored group plan, a church plan, or a government plan;
3) they did not lose insurance coverage due to fraud or failure to pay premiums;
4) they are ineligible for or have exhausted their COBRA coverage options or similar state continuation coverage; and
5) they are not eligible for any other employer-sponsored group plan, Medicaid, or Medicare."

http://www.familiesusa.org/issues/private-insurance/legal-rights/hipaa-definitions.html and also here.