“Conversion” is the right to convert to an individual policy when group coverage ends. Michigan requires that conversion be offered when coverage terminate for certain reasons under a hospital, medical, surgical, or sick-care group policy if the individual had been covered for the previous 3 months (MI Stat. Sec. 500.3612). Events terminating coverage that trigger the right to conversion include:
• Discontinuance of a group policy in its entirety or with respect to an insured class
• Voluntary or involuntary termination of employment except if due to gross misconduct
• Death of the employee
• An event that causes an employee's spouse or dependent to cease to be a qualified family member under the group policy
Notification of the conversion privilege must be included in each policy and certificate of coverage. Employers must give written notice to an individual eligible for conversion within 14 days after the group policy is terminated or the employee is terminated. Employees are required to notify the insurer of their election to convert to an individual conversion policy not later than 30 days after termination of coverage. The first premium is to be paid to the insurer at the time the individual elects to convert.
Federal law requires group plans that make conversion options available to other participants to also offer qualified beneficiaries the right to ...