§ 26-19-113 — Continuation of group coverage after termination of employment or membership

(a) A non-COBRA group policy or certificate of insurance
on a master policy of a group delivered or issued for delivery
in this state on or after July 1, 1995, issued by any insurance
company, nonprofit health service corporation, health
maintenance organization or any other insurer that provides
hospital, surgical or major medical expense insurance or any
accommodation of these coverages on an expense incurred basis,
but not a policy that provides benefits for specific diseases or
for accidental injuries only, shall provide that employees,
members or their covered eligible dependents whose insurance
under the group policy would otherwise terminate because of
termination of employment or membership or eligibility for
coverage are entitled to continue their hospital, surgical and
major medical insurance under that group policy, for themselves,
their eligible dependents or both, subject to all of the group
policy's terms and conditions applicable to those forms of
insurance and to the following conditions:
(i) Continuation is only available to an employee or
member who has been continuously insured under the group policy
and for similar benefits under any group policy which it
replaced, during the entire three (3) month period ending with
the termination of eligibility;
(ii) Continuation is not available for any person who
is:
(A) Covered by medicare, excluding his spouse or
dependent children who shall be entitled to continuation; or
(B) Covered by any other insured or uninsured
arrangement which provides hospital, surgical or medical
coverage for individuals in a group.
(iii) Continuation need not include dental or vision
care benefits or any other benefits provided under the group
policy in addition to its hospital, surgical or major medical
benefits unless the insurer previously included such benefits
and the insured requests such benefits;
(iv) An employee or member who wishes continuation of
coverage shall request the continuation in writing within the
thirty-one (31) day period following the date of termination of
coverage;
(v) An employee or member electing continuation shall
pay to the insurer, third party administrator, group
policyholder or the employer, as designated by the employer, on
a monthly basis in advance, the amount of contribution required
by the policyholder or employer, but not more than one hundred
two percent (102%) of the group rate for the insurance being
continued under the group policy on the due date of each
payment. The employer's designation with regard to whom the
electing employee or member shall pay his contribution shall be
made in writing prior to the date the first contribution by the
employee or member is due. The employee's or member's written
election of continuation, together with the first contribution
required to establish contributions on a monthly basis in
advance, shall be given to the insurer, third party
administrator, policyholder or employer within thirty-one (31)
days of the date the employee's or member's insurance would
otherwise terminate;
(vi) Continuation of insurance under the group policy
for any person terminates when the person fails to satisfy
paragraph (ii) of this subsection or, if earlier, at the first
to occur of the following:
(A) The date twelve (12) months after the date
the employee's or member's insurance under the policy would
otherwise have terminated because of termination of employment
or membership;
(B) If the employee or member fails to make
timely payment of a required contribution, the end of the period
for which contributions were made;
(C) The date on which the group policy is
terminated or, in the case of an employee, the date the employer
terminates participation under the group policy. However, if
this subparagraph applies and the coverage ceasing by reason of
the termination is replaced by similar coverage under another
group policy, the following apply:
(I) The employee or member may become
covered under that other group policy for the balance of the
period that the employee or member would have remained covered
under the prior group policy in accordance with this paragraph
had a termination described in this subparagraph not occurred;
(II) The minimum level of benefits to be
provided by the other group policy is the applicable level of
benefits of the prior group policy reduced by any benefits
payable under that prior group policy;
(III) The prior group policy shall continue
to provide benefits to the extent of its accrued liabilities and
extensions of benefits as if the replacement had not occurred.
(vii) A notification of the continuation privilege
shall be included in each certificate of coverage;
(viii) Upon termination of the continuation period,
the member, surviving spouse or dependent is entitled to
exercise any option which is provided in the group plan to elect
a conversion policy. The member electing a conversion policy
shall notify the carrier of the election and pay the required
premium within thirty-one (31) days of the termination of the
continued coverage under the group contract.
(b) As used in subsection (a) of this section, "non-COBRA"
means any group policy or certificate of insurance on a master
policy of a group policy which is not subject to continuation of
rights as provided under the federal Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.