Conversion of Benefits
Conversion of benefits is the option that allows an individual to transfer or “convert” their group insurance coverage into a personal plan when they lose eligibility under their employer’s group policy. This typically occurs when someone leaves a job, retires, or loses coverage due to a change in employment status. The conversion option ensures continuity of protection without requiring new medical evidence of insurability, as long as the application is submitted within a specific eligibility window, usually 60 to 90 days.
How It Works
Group insurance conversion typically occurs when a person leaves a job, retires, or is terminated and their group benefits stop. A conversion privilege provision requires the insurer to allow the insured to switch to an individual policy upon termination from group coverage. Group insurance providers in Canada typically include this provision in life, accidental death and dismemberment, extended health and dental, and sometimes disability policies, so depending on what the group plan offered, conversion can apply to health, dental, life, and disability insurance. Because you were already approved under the group plan, you do not have to submit evidence of good health, provided you apply to convert within a specified time period. Employers are required to give each terminated employee notice of their conversion options and the timing to act.
Example:
Suppose a worker in Manitoba leaves their job and their employer-provided extended health and dental benefits end. Because they had health and dental coverage under a recognized Canadian group plan, they can apply for a conversion plan such as Manitoba Blue Cross Blue Choice Conversion within 60 days of the group coverage ending. Approval is guaranteed with no medical questionnaire, so their prescription drug, dental, and vision coverage continues without a gap, though the individual plan's benefit limits and copay structure differ from the former group plan.
What to Watch For:
A converted plan can guarantee coverage with no interruption, which is particularly important for anyone with a pre-existing condition who might otherwise be declined when applying for individual coverage with medical underwriting. For a Blue Choice Conversion plan, the application must be made within 60 days of the employer group coverage ending, and approval is guaranteed with no medical questionnaire regardless of which carrier provided the group plan. Conversion generally does not require a medical exam, but the insurer assesses the applicant's age when calculating the new individual premium, which may increase or decrease the cost compared with the group plan.
