Conversions, Continued�

Yesterday, I promised to elucidate [ed-Oooh! A $10 word!] how group conversion plans work. As you may have guessed, there�s not a lot of �there, there� so this will be a brief post.
In Ohio, carriers in the group market must make available a conversion plan for those who lose their jobs and are not eligible to continue their coverage under either COBRA or state continuation rules. The idea is that someone with a serious pre-existing condition may find it difficult or impossible to obtain (adequate) coverage in the individual market.
As you may recall, HIPAA is rather a one-way street; that is, group plans must (generally) recognize coverage from individual plans, but the reverse is not true. Individual plans can limit or exclude coverage for pre-ex, or even decline to insure one who is seriously ill. The conversion rule requires that the carrier offer some plan, one that doesn�t exclude pre-ex. But these plans are notoriously bad deals for those who can qualify for a regular policy. It�s true that the conversion plan can�t exclude a pre-exiting condition, but the benefits in such policies are quite stingy. There is usually a high deductible, no office visit co-pays or drug cards, and other limitations. And they are VERY expensive.
But not all carriers choose to do these conversions in-house. Many out-source this product to other carriers. Recently, I had occasion to do two conversions for folks who didn�t qualify under COBRA or state continuation. Interestingly, the carrier sent me to another insurer, which uses HIPAA plans (perfectly legit). This has the effect of moderating the premiums, offers a choice of two plans (instead of just one), and has a few �bells and whistles� built in (network discounts and an rx card). They�re still pricey (my sister calls this �spendey�), but they don�t seem to be as bad as the traditional conversion plans.
Have a great weekend, and a Happy Easter!

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