If you lose coverage under a fully insured group health plan in Nevada, and meet other requirements, you are guaranteed the right to buy a conversion policy. This is an individual policy sold by the insurance company that covered your former group.
Indemnity health insurance companies in Nevada are required to include conversion rights in their fully insured group health plan policies. HMOs are not required to offer conversion rights, but many do. HMO conversion plans, when available, must follow the same rules that apply to indemnity health plan conversion policies.
- In Nevada, if you have 3 months of coverage through an employer’s fully insured group health plan, and you leave that plan, you are eligible to buy a conversion policy. This is an individual policy you get from the company that insured your employer’s group plan. All persons seeking conversion coverage must not have or be eligible for other health coverage, including Medicare, group health insurance, or substantially similar individual insurance.
Conversion rights are also available to a surviving spouse and children upon the death of the insured, to a child when the child reaches that age at which dependent coverage is terminated, and to a former spouse and children at divorce
You do not need to use up your COBRA or state continuation coverage first to buy a conversion policy. However, if you purchase a conversion policy, you will no longer be able to become HIPAA eligible
- Your employer must notify you of your conversion rights within 16 days of termination of your prior group coverage. You must then elect conversion coverage within 15 days of receiving notification. Typically, this is 31 days following termination of group coverage, but in no case more than 91 days following termination of group coverage.
- You will not have a new pre-existing condition exclusion period for your conversion policy. The conversion policy can only exclude coverage for pre-existing conditions that were excluded under the prior group health plan.
- You must be offered a choice of two conversion plans. Insurers must offer a basic and a standard health benefit plan for the conversion plan.
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- The basic policy covers hospital, skilled nursing, rehabilitation, hospice, emergency care, physician services, laboratory and X-ray services, and prescription drugs. These services are covered with a 50% coinsurance. The lifetime maximum benefit is $1 million. The basic policy does not cover mental health services, substance abuse services, and maternity care.
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- The standard policy covers everything that the basic policy covers. Those services are covered with a 20% coinsurance. In addition, the standard policy covers maternity care and limited mental health services, substance abuse services. The lifetime maximum benefit is also $1 million.
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- Coverage under a conversion plan probably will not be the same as under your prior group health plan, and will probably offer fewer benefits.
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- Contact the Nevada Division of Insurance for more information about covered benefits or visit the Division’s website Here for the summary of benefits for conversion basic and standard health benefit plans.
Conversion policy premiums can be much more expensive than your former group plan premiums. There are limits on what you can be charged for a conversion policy, dependant on your health status, age, and other factors they will all be taken into consideration in figuring your premiums
- Your conversion coverage cannot be cancelled because you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in the case of managed care plans, continue to live in the plan service area.
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