When you leave group coverage, you may also be able to buy a conversion policy. This is an individual health policy from the insurance company that covered your former group.
When do I have to be offered conversion coverage?
- If you were covered under a fully insured group health plan for 6 months, you may be able to buy a conversion policy. You can buy a conversion policy if you lost your group coverage because you left your job or because the group coverage was terminated. However, before being eligible for a conversion policy, you must exhaust any COBRA or state continuation coverage that was available to you.
What will a conversion policy cover?
- If your prior coverage offered benefits that were at least equal to the individual market basic benefits plan, then you must be offered a conversion policy that covers benefits that are, at the very least, equal to the benefits required under the basic plan. If you group plan coverage was less comprehensive than the basic plan, then you may be offered a conversion policy that is similar to your prior group plan, even if it is less comprehensive than the basic plan.
What about coverage for my pre-existing condition?
- Conversion policies 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.
What can I be charged for a conversion Policy?
- If you are buying a conversion policy, there are limits on what you can be charged because of health status, age, or other characters. These rates are based, in part, on average premiums in the small group market and may include some consideration of your health status. Your premiums will probably be more expensive than if you buy an individual health insurance policy.
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 plans, continue to live in the plan service area.
