How Do Conversion Policies For Health Insurance Work?
Many individuals are not fully aware of the options open to them when employer-sponsored group coverage is discontinued. Most states require that health insurance providers offer employees leaving group coverage the opportunity to convert their prior insurance into an individual plan. Applicants who qualify for a health insurance conversion policy are guaranteed issue and cannot be denied coverage because of their health.
The specific rules for activating a conversion plan differ from state to state. In most cases, employees included in the group plan for at least 3 months can apply, but must do so within 63 days of terminating previous coverage.
How Does a Conversion Policy Affect Your Coverage?
With a health insurance conversion policy you are not guaranteed the same benefits and premiums. You may receive less coverage and the cost is always higher because you are solely responsible for paying the premiums. Rates on conversion policies are rarely subject to rate caps, but depending on location, the insurance company may have to present at least three choices of plans in different price ranges.
Who is Eligible for a Conversion Policy?
Since federal COBRA continuation benefits are available to employee groups of 20 or more, conversion policies are only available to individuals who don’t qualify for COBRA coverage or have already exhausted those benefits. This also applies in states that have mini-COBRA laws for smaller employee groups. If your group insurance was terminated by the employer/provider due to your failure to comply with the contract terms or proof of false information in the application, you are not entitled to a conversion plan.
A health insurance conversion policy may be available to spouses and children of a deceased employee in some states. For more information on conversion coverage for families, visit your state’s Health Insurance Department.
Related posts:
- Where Can I Sign Up for Group Health Insurance?
- Who Offers the Best Health Insurance?
- What Does New York Health Insurance Law Cover?
- What Kind Of Health Insurance Can You Get When Cobra Runs Out?
- What Are Employer Obligations When Offering Health Insurance?
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