Senate Bill No. 560
(By Senators Kessler, Minard, Bailey, Edgell, Sharpe and Rowe)
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[Introduced March 22, 2001; referred to the Committee on Banking
and Insurance.]
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A BILL to amend article sixteen, chapter thirty-three of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
eighteen; and to amend article twenty-five-a of said chapter
by adding thereto a new section, designated section
thirty-six, all relating to requiring continued coverage,
under certain circumstances, by group hospital, surgical and
major medical insurers and health maintenance organizations
after covered person's employment or membership has been
terminated.
Be it enacted by the Legislature of West Virginia:
That article sixteen, chapter thirty-three of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section
eighteen; and to amend article twenty-five-a of said chapter by
adding thereto a new section, designated section thirty-six, all to
read as follows:
ARTICLE 16. GROUP ACCIDENT AND SICKNESS INSURANCE.
§33-16-18. Continuation of group hospital, surgical and major
medical coverage after termination of employment or
membership.
(a) A group policy delivered, issued for delivery, renewed or
amended in this state which insures employees or members for
hospital, surgical or major medical insurance on an expense
incurred or service basis, other than for specific diseases or for
accidental injuries only, shall provide that employees or members
whose insurance under the group policy would otherwise terminate
because of termination of employment or membership due to a illness
or disability that was acquired or began while an employee or
member under the policy are entitled to continue their hospital,
surgical and major medical insurance under that group policy, for
themselves and their eligible dependents, subject to all of the
group policy's terms and conditions applicable to those forms of
insurance and to the following conditions:
(1) Continuation is not available for any person who is covered by:
(A) Medicare, except for those individuals who have been
covered under a group medicare supplement policy; or
(B) Any other insured or uninsured plan which provides
hospital, surgical or medical coverage for individuals in a group
and under which the person was not covered immediately prior to his
or her termination or who exercises his or her conversion privilege
under the group policy.
(2) Upon termination written notice of continuation shall be
presented to the employee or member by the employer or mailed by
the employer to the last known address of the employee. An
employee or member who wishes continuation of coverage must request
the continuation in writing within the ten-day period following the
later of: (i) The date of the termination; or (ii) the date the
employee is given written notice of the right of continuation by
either the employer or the group policyholder. In no event,
however, may the employee or member elect continuation more than
three months after the date of the termination. Written notice of
continuation presented to the employee or member by the
policyholder, or mailed by the policyholder to the last known
address of the employee, is the giving of notice for the purpose of this provision.
(3) An employee or member electing continuation must pay to
the group policyholder or the employer, on a monthly basis in
advance, the total amount of premium required by the insurer,
including that portion of the premium contributed by the
policyholder or employer, if any, but not more than the group rate
for the insurance being continued.
(4) Continuation of insurance under the group policy for any
person terminates when the person becomes eligible for medicare or
is covered by any other insured or uninsured plan which provides
hospital, surgical or medical coverage for individuals in a group
and under which the person was not covered immediately prior to the
termination or, if earlier, at the first to occur of the following:
(A) The date twelve 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; or
(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 occurs and
the coverage ceasing by reason of the termination is replaced by
similar coverage under another group policy, the following
applies:
(i) The employee or member has the right to 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 had a termination not occurred; and
(ii) 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.
(b) A notification of the continuation privilege shall be
included in each certificate of coverage.
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.
§33-25A-36. Continuation of coverage after termination of
employment or membership.
(a) No health maintenance organization may cancel or fail to
renew the coverage of an enrollee if the enrollee's coverage would
otherwise terminate because of termination of employment due to a
illness or disability that was acquired or began while the enrollee
was covered by the health maintenance organization. The enrollee
is permitted to maintain enrollee status, for themselves and their eligible dependents, subject to all of the health maintenance
organization's terms and conditions under the following conditions:
(1) Continued coverage is not required for any person who is
covered by medicare or by any other insured or uninsured plan which
provides hospital, surgical or medical coverage for individuals in
a group and under which the person was not covered immediately
prior to the termination or who exercises a conversion privilege
under a plan;
(2) Upon termination written notice of continued coverage
shall be presented to the employee or member by the employer or
mailed by the employer to the last known address of the employee.
An employee or member who wishes continuation of coverage must
request the continuation in writing within the ten-day period
following the later of: (i) The date of the termination; or (ii)
the date the employee is given written notice of the right of
continuation by either the employer or the group policyholder. In
no event, however, may the employee or member elect continuation
more than three months after the date of the termination. Written
notice of continued coverage presented to the enrollee by the
employer, or mailed by the employer to the last known address of
the enrollee, is the giving of notice for the purpose of this provision;
(3) An enrollee electing continued coverage must pay to the
employer, on a monthly basis in advance, the total amount of
premium required by the health maintenance organization, including
that portion of the premium contributed by the employer, if any,
but not more than the rate for the enrollee at the time of
termination;
(4) Continued coverage under the health maintenance
organization for any person terminates when the person becomes
eligible for medicare or is covered by any other insured or
uninsured plan which provides hospital, surgical or medical
coverage for individuals in a group and under which the person was
not covered immediately prior to the termination or, if earlier, at
the first to occur of the following:
(A) The date twelve months after the date the enrollee's
coverage under the health maintenance organization would otherwise
have terminated because of termination of employment or membership;
(B) If the enrollee fails to make timely payment of a required
contribution, the end of the period for which contributions were
made; or
(C) The date on which the coverage terminates under a contract with the employer. However, if this occurs and the coverage
ceasing by reason of the termination is replaced by similar
coverage under another group policy or plan, the enrollee has the
right to become covered under that other group policy or plan, for
the balance of the period that the employee or member would have
remained covered by the health maintenance organization had the
termination not occurred.
(b) A notification of the continuation privilege shall be
included in each evidence of coverage.
NOTE: The purpose of this bill is to
require, under certain
circumstances, continued coverage by group hospital, surgical and
major medical insurers and health maintenance organizations after
a covered person's employment or membership has been terminated.
These sections are new; therefore, strike-throughs and
underscoring have been omitted.