Texas General Lines — Life, Accident, Health and HMOHealth InsuranceMedium
Which provision in a group health insurance policy allows a departing employee to convert their group coverage to an individual policy without evidence of insurability?
- ACoordination of Benefits
- BContinuation of Coverage (COBRA)
- CConversion Privilege
- DEnrollment Period
Show answer & explanationAnswer & explanation
Correct answer: C. Conversion Privilege
The Conversion Privilege is a standard provision in group health insurance that permits an employee whose group coverage terminates to convert to an individual policy with the same insurer without having to provide evidence of insurability. This is crucial for maintaining continuous coverage.
Why the other options are wrong
- A. Coordination of Benefits prevents overpayment when an individual has multiple health plans.
- B. COBRA allows for temporary continuation of group coverage, not conversion to an individual policy.
- D. An enrollment period is the time during which an eligible individual can sign up for coverage.
Conversion Privilege (Group Health)
A provision in a group health insurance policy that allows an eligible individual to convert their group coverage to an individual health insurance policy upon termination of employment or group eligibility, without providing evidence of insurability.
- Must be exercised within a specific timeframe (e.g., 31 days).
- Individual policy premiums are typically higher.
- Benefits may be less comprehensive than the group plan.
- Protects against loss of coverage due to job change.
Memory trick: Group provisions: COB for multiple policies, Conversion for individual, COBRA for temporary group extension.