Conversion Coverage

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When am I eligible for a conversion policy?

· In California, if you have coverage through an employer’s fully insured group health plan and you lose it, you may be eligible to buy conversion coverage. This is an individual policy you get from the company that insured your employer’s group plan.

The employee who lost coverage is eligible for conversion as is the spouse and any dependent children who were covered under the plan when the coverage was terminated. In addition, spouses and dependent children can elect conversion coverage following the death of a covered employee. Spouses also can elect conversion coverage following divorce or termination of marriage and children when they reach an age where they cease to qualify as dependents.

· To qualify for a conversion policy, you must have had at least 3 months of continuous coverage through an employer’s fully insured group health plan. However, insurers may refuse to offer you a conversion policy if your fully insured group health plan is terminated due to nonpayment, good cause or fraud. In addition if you are covered for similar benefits by another individual policy or contract or covered under Medicare or another group health plan, then your group plan is not required to offer you a conversion policy.

· If you elect a conversion policy, you will no longer be HIPAA eligible.

What does a conversion policy cover?

· Conversion policies are required to meet minimum standards set out in state law. Even so, the benefits may be less generous than what you received under your former group coverage.

What about coverage for my pre-existing condition?

· Your conversion policy cannot impose a new pre-existing condition exclusion period. However, you might have to satisfy the unexpired portion of any pre-existing condition exclusion period from your former health plan.

How much can I be charged for my conversion policy?

· Generally premiums for conversion policies can vary depending on your health status, age, and other factors. However, if your prior group coverage was a fully insured HMO, then California law limits the premium you can be charged. Even so, you may find that your premiums are quite expensive.

· Contact the California Department of Managed Care or California Department of Insurance, if you have questions about conversion policy premiums.

Can my conversion policy be canceled?

· Your coverage cannot be canceled because you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in the case of managed care plan, continue to live in the plan service area.


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