If a small company can no longer afford group disability insurance, what happens to its employees' coverage?

When a small company can no longer afford group disability insurance, the employees typically have the option to convert their group coverage to individual policies. This process allows individuals who have been insured for a minimum period, often around three months, to apply for an individual policy without having to provide evidence of insurability. This option serves as a protective measure for employees, ensuring that they do not lose their coverage immediately when the employer can no longer sustain the group policy.

This choice is particularly beneficial because it affords employees continuity in their insurance coverage, which is critical in the event they experience a disability. By converting to an individual policy, they can maintain some level of protection, albeit potentially at a different cost and coverage level compared to their original group plan. This highlights the importance of individualized considerations in health insurance, as not having to undergo medical underwriting can make a significant difference for those with health issues.

Other options may not provide the same level of protection or continuity. For instance, immediate loss of coverage would leave employees without any safety net, and switching to a different group policy may not be feasible if the employer is unable to afford any disability insurance at all. Lastly, retaining insurance through COBRA is more applicable to group health insurance rather than disability coverage, as COB