CHAPTER 58-18C
CONTINUATION OF HEALTH CARE COVERAGE
58-18C-1 Continuation of coverage after employer ceases operations, fails to pay premiums, or cancels coverage--Persons covered--Time.
58-18C-2 58-18C-2. Repealed by SL 2005, ch 270, § 7.
58-18C-3 Eligibility requirements.
58-18C-4 Notice of termination required.
58-18C-5 Exercising continuation rights--Option to decrease benefits.
58-18C-6 58-18C-6. Repealed by SL 2005, ch 270, § 8.
58-18C-7 Continuation policy not required in certain circumstances.
58-18C-8 Premiums for continuation policies.
58-18C-9 Notification of continuation rights.
58-18C-10 58-18C-10. Repealed by SL 2005, ch 270, § 9.
58-18C-11 Enforceability of chapter under Employee Retirement Income Security Act.
58-18C-1. Continuation of coverage after employer ceases operations, fails to pay premiums, or cancels coverage--Persons covered--Time.
Every policy of group health insurance providing benefits for hospital or medical expenses delivered or issued for delivery in this state, by a commercial health insurance company, by a nonprofit medical and surgical service plan corporation, by a nonprofit hospital service plan corporation, by a health maintenance organization, or by any other similar mechanism shall, in addition to the provisions required by law, include the right of each employee, upon their employer ceasing operations and the termination of the policy or contract, to have the coverage continue for themselves and their eligible dependents, effective as of the date of loss of the previous group coverage, for a period of twelve months for which the employee shall be financially responsible. In addition, if an employer either fails to submit premium payment to the insurance company resulting in loss of coverage to its employees or cancels the coverage and does not notify the employees of such loss of coverage, the employees and their dependents are then eligible for continuation pursuant to this section if election is made within sixty days of the date of their being notified of the loss of coverage. The employer shall provide notice of any nonpayment of premiums or cancellation of coverage to employees as soon as reasonably possible but no later than ten days after the date of cancellation. If the employer fails to notify the employees and their dependents of the termination of coverage within ten days, the employees and dependents may not be denied coverage by the insurer provided timely election is made after actual receipt of notice. Whether notice is provided or not, the election period for continuation of coverage may expire ninety days from the date the group coverage terminated. Any premiums due for the continuation of coverage may be required to be paid by the employee or dependent as a condition of providing continuation coverage.
Any former employee who is under continuation coverage at the time an employer ceases operation and terminates the policy, or fails to make premium payments resulting in loss of coverage, or cancels the insurance without notice, is eligible to remain on continuation coverage for the remainder of the continuation term or twelve months, whichever is less, if timely election is made and continuation payments received.
For purposes of this section, the phrase, employer ceasing operations, means that the business has closed or discontinued its business operations or, in the case of a sole proprietorship or an owner-operated business, the sale of such business that results in the purchaser establishing its own taxpayer identification number.
Source: SL 1998, ch 294, § 1; SL 2001, ch 280, § 1; SL 2005, ch 270, § 10; SL 2008, ch 267, § 1.
58-18C-3. Eligibility requirements.
Continuation is only available to an employee who has been continuously insured under the group policy or under any creditable coverage which it replaced during the entire six-month period ending with such termination.
Source: SL 1998, ch 294, § 3; SL 2005, ch 270, § 2; SL 2008, ch 268, § 1.
58-18C-4. Notice of termination required.
Written notice of termination of group coverage shall be provided by the employer to each employee having coverage within ten days of termination. The notice shall contain such information as required by the director.
Source: SL 1998, ch 294, § 4.
58-18C-5. Exercising continuation rights--Option to decrease benefits.
Any employee may exercise the right to continuation within thirty days of receipt of due notice of termination of coverage of the group and upon payment of premiums from the date of termination.
Any insurer providing continuation coverage pursuant to § 58-18C-1 shall offer to all beneficiaries who are eligible to elect to continue coverage the option to decrease benefits of the continued coverage. The options shall include, at a minimum, those coverage options that would have been otherwise available to employees or dependents who initially enrolled into the coverage if the options decrease coverage or a carrier may offer a standardized plan to all those eligible for continuation that contains similar benefits to the beneficiaries prior coverage but at a higher deductible or other reduced benefit features.
Source: SL 1998, ch 294, § 5; SL 2005, ch 270, § 3; SL 2008, ch 266, § 2.
58-18C-7. Continuation policy not required in certain circumstances.
No insurer may be required to offer or renew a continuation policy covering any person if:
(1) The person is covered for similar benefits by another individual or group policy;
(2) Similar benefits are provided for or available to such person, by reason of any state or federal law;
(3) The benefits under sources of the kind referred to in subdivision (1) for such person or benefits provided or available under sources of the kind referred to in subdivision (2) for such person, together with the continued policy's benefits, would result in overinsurance according to the insurer's standards for overinsurance;
(4) There has been fraud or material misrepresentation in applying for any benefits under continued or converted policy;
(5) The person failed to pay any required contribution; or
(6) Cancellation of all similar insurance policies in the entire state.
Source: SL 1998, ch 294, § 7; SL 2005, ch 270, § 4.
58-18C-8. Premiums for continuation policies.
The premium for a continuation policy may not be greater than one hundred twenty-five percent of the group rate under which a person is covered.
Source: SL 1998, ch 294, § 8; SL 2005, ch 270, § 5.
58-18C-9. Notification of continuation rights.
A notification of the continuation rights shall be included in each certificate of coverage.
Source: SL 1998, ch 294, § 9; SL 2005, ch 270, § 6.
58-18C-11. Enforceability of chapter under Employee Retirement Income Security Act.
Nothing in this chapter is enforceable to the extent such enforcement violates the Employee Retirement Income Security Act.
Source: SL 1998, ch 294, § 11.
