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Leaving An Employer's Group Health Insurance

Right To Individual Health Insurance Provided By Contract

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Many employer group health insurance policies provide at least a limited right to convert the group policy to an individual policy. If your policy has this provision, you will be entitled to convert your health insurance to a policy of your own with the same health insurance company.

Generally the individual coverage must begin within 31 days of losing the group coverage.

An advantage to converting is that, without any questions asked, every health claim will be covered from day one of the new coverage. This includes claims for the health condition you had when you left your old employer.

Health insurance companies know that most of the people who exercise the right to convert a group health coverage have a health condition which prevents them from buying coverage on the open market. As a result, the insurance company will tell you which plan or plans are available to you. Most of the plans to which you can convert have low benefits and high premiums. It is not uncommon for a conversion plan to provide only $150 or $200 per day for hospitalization, a very low schedule of surgery fees, and no prescription coverage at all. These plans typically cost anywhere from $300 to $1,200 per month per person.

It is easy to see why this type of coverage is considered the last resort, when nothing else is available. However, there may be better coverage guaranteed to you under HIPAA, which is discussed next.


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