Massachusetts Health & Accident Insurance Practice Exam

Who is eligible to exercise the conversion privilege?

1. Any family member of the insured

2. Only current employees of the group

3. Employees whose group coverage has been terminated

4. New hires within 30 days

The correct answer is: Employees whose group coverage has been terminated

The conversion privilege allows individuals who were covered under a group health insurance policy to convert their group coverage to an individual policy when certain conditions are met. This is particularly important because it provides a safety net for insured individuals when they lose their group coverage due to events such as termination of employment or the loss of eligibility in the group plan. In this context, employees whose group coverage has been terminated are indeed the ones eligible to exercise the conversion privilege. This provision ensures that they can obtain individual health insurance without having to provide evidence of insurability, which means they cannot be denied coverage based on health status or pre-existing conditions at the time of conversion. The other options do not accurately reflect eligibility criteria relevant to the conversion privilege. Family members of the insured typically do not have rights to convert based solely on the insured’s loss of group coverage unless they themselves also lose coverage. Current employees generally remain under group benefits and are not at the point of needing conversion. New hires would not be eligible yet for conversion as they would not have lost coverage; rather, they would typically have their own group coverage as new participants.