If you lose group medical insurance coverage from your employer, you may be eligible for a conversion medical insurance policy. This insurance is an extension that allows you to remain on the former plan for a predetermined time period. Many states use the Consolidated Omnibus Budget Reconciliation Act as the standard conversion plan. Although COBRA is a federal policy, some states opt out of the program.
Qualify for Conversion Medical Insurance
Each state has a separate set of laws dictating the terms health insurance companies must offer you in the event of a recent job loss. North Dakota, for example, requires COBRA to continue offering coverage for a minimum of 36 months after the employment terminates. The amount of time varies from state to state. Your dependents may or may not be covered, depending on your specific state's laws and the policy stipulations prior to termination. If you are covered by other medical insurances at the time of termination, you may not qualify for conversion medical insurance.
Patient Protection Act
According to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, your children may no longer be denied coverage due to preexisting conditions. This includes children covered through conversion medical insurance.
New laws are being put into effect that make it illegal to terminate coverage due to any preexisting condition regardless of age. Currently, however, some policies may allow the insurer to deny conversion medical insurance due to a preexisting condition.
Conversion Medical Insurance Cost
Conversion medical insurance is the continuation of a group plan in which you were formerly enrolled. Some states require the employer and insurance company to offer the extended coverage for the same cost as when you were employed. You usually must pay any premium amount the employer once paid, however. Other states allow the insurance company to increase the premium to cover costs of administration.
What Is COBRA?
The Consolidated Omnibus Budget Reconciliation Act is the most common type of conversion medical insurance policy. Different states may use different plans. Only companies with 20 or more employees may qualify for COBRA in most instances.
Caps on Conversion Medical Insurance
A cap limits the total liability an insurance provider must take. This means that the total coverage either per year or per lifetime must not exceed a set amount. Any amount over the cap is your responsibility for payment. According to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, an insurance company may no longer place a cap on total coverage, either per lifetime or per year. This includes all forms of conversion medical insurance.
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