Minnesota Session Laws - 1996, Regular Session

  
    
KEY: stricken = old language to be removed
     underscored = new language to be added
    
                            CHAPTER 304-H.F.No. 2044 
                  An act relating to insurance; group life and health 
                  coverages; prohibiting retroactive termination of a 
                  person's coverage without the consent of the covered 
                  person; proposing coding for new law in Minnesota 
                  Statutes, chapter 60A. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [60A.086] [RETROACTIVE TERMINATION OF COVERAGE 
        UNDER GROUP POLICIES PROHIBITED.] 
           Subdivision 1.  [APPLICABILITY.] This section applies to: 
           (1) health plans as defined in section 62A.011, issued to 
        groups; 
           (2) group accident and health insurance; 
           (3) group life insurance; 
           (4) group accidental death and dismemberment insurance; and 
           (5) group disability income insurance. 
           Subd. 2.  [REQUIREMENT.] No plan of coverage described in 
        subdivision 1 shall permit the issuer to retroactively cancel, 
        retroactively rescind, or otherwise retroactively terminate the 
        coverage of an employee, dependent, or other covered person 
        under the group coverage, without the written consent of that 
        employee, dependent, or other covered person.  For purposes of 
        this subdivision, "covered person" includes a person on 
        continuation coverage or eligible for continuation coverage. 
           Subd. 3.  [NONAPPLICABILITY.] (a) This section does not 
        apply where the group policy or contract is lawfully terminated 
        retroactively and not replaced with substantially similar 
        coverage. 
           (b) This section does not apply where the employee, 
        dependent, or other covered person committed fraud or 
        misrepresentation with respect to eligibility under the terms of 
        the group policy or contract or with respect to any other 
        material fact, but retroactive termination without written 
        consent must not be based upon the failure of the employee, 
        dependent, or other covered person to meet the group sponsor's 
        eligibility requirements, if the group sponsor requested the 
        issuer of the coverage to include the person as a covered person.
           (c) This section does not apply where the issuer of 
        coverage described in subdivision 1 retroactively terminates 
        coverage of an employee, dependent, or other covered person 
        solely because the group sponsor did not notify the issuer of 
        the coverage in advance of the employee's voluntary or 
        involuntary termination from employment, provided that the 
        retroactive termination of coverage is effective no earlier than 
        the end of the day of termination from employment.  This 
        paragraph does not affect continuation rights under federal or 
        state law and does not limit the effect of section 62Q.16. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following enactment and 
        applies to coverage issued or renewed on or after that date. 
           Presented to the governor March 12, 1996 
           Signed by the governor March 13, 1996, 2:20 p.m.