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State Conversion Rights

An individual may convert employer group coverage to an individual policy after being on state extension or Federal COBRA extension, however, conversion maybe chosen without taking the state extension or COBRA first.

Conversion Requirements and Applicable Code Sections

Eligibility

  • An individual whose insurance under the group policy has been terminated for any reason.
  • The individual has previously been insured under the group policy or its predecessor.
  • The individual’s termination of group coverage did not occur because of their failure to pay required contribution.
  • The individual does not acquire other group coverage covering all preexisting conditions.
  • The individual is not eligible to continue coverage under existing group policy in accordance with the terms of the policy.

Rules and procedures

  • Written application for the converted policy must be made and the first premium must be paid to the insurer no later than 60 days after termination of the group insurance.
  • The converted policy shall be issued without evidence of insurability.
  • The initial premium for the first 12 months and subsequent renewal premiums shall be in compliance with the Utah Code Annotated (UCA) Section 31A-30-106.5.
  • The premium is payable as required by the insurer for the policy selected unless another mode of payment is mutually agreed upon.
  • The converted policy becomes effective at the time the group policy terminates.
  • The converted policy covers the employee and dependents who where covered by the group policy at the date of termination of insurance.

Conversion policy provisions

  • A converted policy may include a provision which allows the insurer to request information whether there is other coverage in advance of any premium payment due date.
  • The insurer may refuse to renew the policy for any of the following reasons:
    • Nonpayment of premiums.
    • Fraud or intentional misrepresentation of material fact under the terms of the coverage.
    • If the insurer is ceasing to offer coverage in the individual market.
    • If the individual no longer resides, lives or works in the service area.
  • No insurer may be required to issue a converted policy, which provides benefits in excess of those provided under the group policy from which conversion is made.
  • No converted policy may exclude a preexisting condition not excluded under the group policy.

Conversion health benefit pan

  • The employee or member must be offered basic coverage as defined in UCA 31A-30-103(4).

HIPAA sections

  • P.L. 104-191, 110 Stat. 1979 Sec. 2741(e)(2)
  • Health Insurance Portability for Group Health Plans; Interim Rules and Proposed Rule. Federal Register / Vol. 62, No. 67/ Tuesday, April 8, 1997/ Rules and Regulation.
  • Section 148.122(2)
  • Section 148.102,(a)(1)

US Department of Labor’s Employee Benefits Security Administration