Group Health Insurance Conversion Options – What To Look Out For

• are in the process of retiring 

• have been laid off

• are over-age dependents (persons over the age of 21 who are not currently enrolled in school) that are no longer eligible under parents plan

• have terminated employment and existing medical issues

• move from full-time to part-time and therefore may not be eligible for benefits

Group Health Insurance Conversion Options: What to look out for?

Be aware that this option to convert is only available in most cases within 60 days following the termination from the benefits plan. It has been my experience over the years that many employers fail to educate and remind outgoing employees of this important option deadline.

You need to look at your current coverage and compare them with those being offered through individual plans. There will be many similarities with the type of coverage offered; however the limits being offered will be much lower. For example, your employee benefits plan for prescription drugs will, within most plans, have no limit for annual coverage. An individual plan, on the other hand, will offer anywhere from $500 to $1,500 per year maximum. Dental coverage from an employer plan will have between $750 and $1,500 coverage and individual plans from $300 and have a tiered system each year to a maximum of $500 in most cases.

Finally, understand the impact of “deductibles” which is the cost that you share with the insurer. In many plans, you may be paying 20% of the total cost of prescription drugs. The other 80% to the maximum covered amount is what the insurer will pay.

Industry trends

As we head into 2019, some trends that emerged in the latter part of 2018 will continue to be hot topics. In October, Manulife announced on their individual plans the inclusion of medical marijuana under the prescription drug coverage. I am sure many other carriers will offer similar options as this drug continues to gain traction in all news mediums.

The other trend is that of mental health or mental injury which has had considerable growing attention and focus over the past few years and rightfully so. A better understanding of this critical topic is needed in a world that has seen a dramatic rise in cases afflicting many individuals. I am so pleased to see insurance carriers finally taking an active role in education, awareness and treatment in all aspects of  mental health. At SAFG Benefits, we are fortunate to have one of the pioneers in mental health awareness and treatment as our board chair. Joseph Ricciuti is a passionate advocate in the industry and recently teamed up with other professionals to launch a solution called Mental Health in a Box which allows for some wonderful self-diagnosis tools and resources. 

These and other emerging “voluntary” trends will continue to evolve rapidly in the ever-changing benefits landscape.

Insiders tips

• Understand that you have more than just one option. You can convert to your employer carrier OR explore the many other insurance carrier plans on the market as they are also eligible for conversion. 
• Use the expertise of a qualified insurance agent to assist in your research for the available plans and compare options to fit your needs. Your employer plan usually has an assigned insurance agent who services the plan and should be able to offer assistance. You may also look to your current insurance advisor if you have one.
• Calculate premiums versus current dental expenses to determine if the cost makes sense. Keep in mind that individual dental plans will not cover major restorative or will offer very low coverage. Most dental expenses will result in basic cleanings one to two times per year depending on the individual.
• If you leave an employer plan to become a self-employed individual you will definitely want to explore a Healthcare Spending Account as an option. This type of plan or a traditional individual health plan will provide a tax deduction for the cost for self-employed. Look for our future article for greater insights!
• BEST TIP: If you are in relatively good health and NOT taking any prescribed medication my advice would be to explore plans that require a short medical questionnaire. These plans have much higher coverage limits than the conversion plans since those plans assume the applicant and/or family are currently on medications etc.

Manulife’s Conversion Project:

Sample 2019 rates for Manulife FollowMe Conversion Product*:

*Rates subject to change. This is to be used as a product guide.

Jason Julian’s Bio

I have been in the Financial Services industry for 27 years. I started in the banking sector in 1991 for Canada Trust in Hamilton later to begin an insurance career as an agent with Prudential of America in 1995. The majority of my selling career was spent in Hamilton Ontario at one of Canada’s leading brokerages; Dan Lawrie Insurance Brokers Ltd.

I went on to work as a Life Member of MDRT and two-time Court of the Table producer along with Top 10 status for 7 years with Unity Life before joining the company in 2007. After selling my book of business, I joined the corporate side serving as Director of Sales for Southwestern Ontario for Unity Life/Foresters 2007 to 2012 before becoming AVP Ontario Sales. In 2014, I worked with National Accounts to oversee growth as well as Business Development in 2017.

In 2018 I took on the role as Senior VP at a growing benefits company (SAFG Benefits Solutions Inc.) to grow the brand and market our unique value proposition to brokers and employers using the latest technology platform and best of class services including Mental Health, Meschino Wellness, EQ Care virtual doctors and Pharmacogenetics.