§ 24-A §2809-A — Conversion on termination of policy or eligibility

1.
A group policy issued prior to January 1, 1996, that provides hospital, surgical or major medical expense insurance or any combination thereof, other than a policy that provides benefits for specific diseases or accidental injuries only, must contain a provision that if the insurance on an employee or member ceases because of termination of employment or termination of the policy or any portion of a policy, and the person has been continuously insured for a period of at least 3 months under the group policy or under the group policy and any prior group policy or contract providing similar benefits that it replaces, that person is entitled to have issued to that person by the insurer, without evidence of insurability, an individual policy or, at the insurer's option, a group certificate of health insurance, provided that application is made and the first premium paid to the insurer within 90 days after that termination. At the option of the employee or member, the converted policy may cover the employee or member, the employee or member and the employee or member's dependents or the dependents of the employee or member if, in the latter 2 cases, the dependents have been covered for a period of at least 3 months under the group policy, unless the dependent persons were not eligible for coverage until after the beginning of the 3-month period. The insurer has the option to provide the required coverage upon conversion through either a group or individual policy, and may issue a separate converted policy to cover any dependent. An insurer is not required to provide a conversion privilege if termination of insurance under the group policy occurred because the employee or member failed to pay any required contribution or if any discontinued group coverage is replaced by continuous and substantially similar group coverage within 31 days.
1-A.
Notification of cancellation.
An insurer may not cancel or refuse to renew any policy for hospital, surgical, dental or major medical expense insurance until the insurer has provided by first class mail at least 10 days' prior notification according to this section. The notice must include the date of cancellation of coverage and, if applicable, the time period for exercising policy conversion rights. The notice also must include an explanation of any applicable grace period. Notification is not required when the insurer has received written notice from the group policyholder that replacement coverage has been obtained.
1-B.
Notification of availability of individual coverage.
An insurer shall provide forms to group policyholders, and certificate holders when required by subsection 1‑A, for the purpose of informing terminating group members of their right to purchase any individual health plan available in this State, including their eligibility for any special enrollment period to purchase an individual health plan pursuant to the federal Affordable Care Act, and of the availability of public health coverage options available in this State, including but not limited to MaineCare coverage. An adequate supply of forms must be provided to each group policyholder when the policy is issued and at least annually after the policy is issued. The superintendent may prescribe the content of the form by routine technical rule pursuant to Title 5, chapter 375, subchapter 2‑A. The form must include at least the following:
2.
If a conversion privilege is applicable pursuant to subsection 1, it must also be available:
3.
The insurer shall not be required to issue a converted policy covering an otherwise eligible person:
3-A.
Policies issued or renewed on or after January 1, 1996.
An insurer that offers individual health plans pursuant to section 2736‑C is permitted, but not required, to include a conversion privilege in group policies issued or renewed on or after January 1, 1996. If the insurer does include a conversion privilege in those policies, individuals exercising these rights must be offered a choice of any individual health plan offered by the insurer. An insurer that does not offer individual health plans pursuant to section 2736‑C may not include a conversion privilege in group policies issued or renewed on or after January 1, 1996.
4.
The premium on the converted policy must be determined in accordance with premium rates applicable to individually underwritten standard risks for the age and class of risk of each person to be covered and the type and amount of insurance provided. Experience under converted policies is not an acceptable basis for establishing rates for converted policies, except to the extent permitted by rules adopted by the superintendent.
5.
The effective date of the converted policy shall be the date of termination of the individual's insurance under the group policy.
6.
A converted policy issued under this section must conform to rules adopted by the superintendent. These rules must ensure that continuity of coverage with similar benefits as determined by the superintendent is offered. The rules must also specify plans with more limited benefits that must be offered, but may not require an insurer to provide benefits in excess of those provided under the group policy from which conversion is made.
7.
Notice.
Notice of the conversion privilege, if one is applicable, must be included in each certificate of coverage.
8.
A converted policy issued pursuant to this section which is delivered outside this State may be on such form as the insurer may then be offering for that conversion in the jurisdiction where the delivery is to be made.
9.
Refusal to renew.
A policy issued pursuant to the conversion privilege provided by this section may provide that the insurer may refuse to renew the policy or coverage of any person insured only as permitted by section 2736‑C.
10.
Additional conversion period for injured workers.
11.
Continued group coverage; certain circumstances.
Notwithstanding this section, if the termination of an individual's group insurance coverage is for one of the reasons listed in paragraph A‑1, the insurer shall allow the member or employee to elect, within the time period prescribed by paragraph B, to continue coverage under the group policy at no higher level than the level of benefits or coverage received by the employee immediately before termination and at the member's or employee's expense or, at the member's or employee's option, to convert to a policy of individual coverage without evidence of insurability in accordance with this section.
12.
This section applies to all policies issued in other states to the extent they cover employees whose primary workplace is in this State.

Legislative History

PL 1981, c. 606, §2 (NEW). PL 1983, c. 91, §2 (AMD). PL 1985, c. 684, §2 (AMD). PL 1987, c. 25, §§3,4 (AMD). PL 1989, c. 447, §2 (AMD). PL 1991, c. 668, §§2,3 (AMD). PL 1991, c. 822, §§3,4 (AMD). PL 1991, c. 822, §6 (AFF). PL 1991, c. 885, §§E29,30 (AMD). PL 1991, c. 885, §E47 (AFF). PL 1995, c. 189, §2 (AMD). PL 1995, c. 189, §4 (AFF). PL 1995, c. 332, §§A8-14 (AMD). PL 1995, c. 625, §A25 (AMD). PL 1997, c. 604, §B3 (AMD). PL 2003, c. 156, §§2-4 (AMD). PL 2003, c. 428, §B2 (AMD). PL 2007, c. 199, Pt. F, §1 (AMD). PL 2009, c. 439, Pt. A, §1 (AMD). PL 2009, c. 574, §1 (AMD). PL 2021, c. 80, §1 (AMD). RR 2021, c. 1, Pt. B, §243 (COR).