Sections 38.2-3416 and 38.2-3541 of the Code of Virginia require insurers to offer group policyholders the option of allowing individuals covered under the policy or subscription contract (i) to convert to an individual accident and sickness policy or contract without evidence of insurability upon termination of group coverage eligibility or (ii) to continue coverage for a period of ninety days at the existing group rate. However, if a person is insurable under a replacement group policy that does not impose additional waiting periods or preexisting condition limitations, then the conversion or continuation of coverage is not required. In addition, a conversion policy need not contain the same level of benefits as the group policy. Section 38.2-3416 was enacted in 1984.

Insurers having an applicable policy in effect before January 1, 1985 may be exempted from offering a conversion policy. However, in the absence of a conversion alternative, a person whose eligibility under the group policy is terminated may elect to continue coverage under the group plan at the group rate as long as the affected person elects or as long as the insurer is not required to offer an acceptable conversion policy.

The Special Advisory Commission on Mandated Health Insurance Benefits (Advisory Commission) reviewed the mandated offer of conversion or continuation of coverage in 1993. The Advisory Commission held a public hearing during its October 4, 1993 meeting to receive comments regarding the conversion or continuation offer. Written comments were received from two parties. No interested parties offered oral comments.