2003 Minnesota Statutes

     61A.092 Continuation of coverage for life insurance. 

    Subdivision 1.    Continuation of coverage.  Every group 
 insurance policy issued or renewed within this state after 
 August 1, 1987, providing coverage for life insurance benefits 
 shall contain a provision that permits covered employees who are 
 voluntarily or involuntarily terminated or laid off from their 
 employment, if the policy remains in force for any active 
 employee of the employer, to elect to continue the coverage for 
 themselves and their dependents. 

    An employee is considered to be laid off from employment if 
 there is a reduction in hours to the point where the employee is 
 no longer eligible for coverage under the group life insurance 
 policy.  Termination does not include discharge for gross 
 misconduct. 

    Subd. 2.    Responsibility of employee.  Every covered 
 employee electing to continue coverage shall pay the employee's 
 former employer, on a monthly basis, the cost of the continued 
 coverage.  In no event shall the amount of premium charged 
 exceed 102 percent of the cost to the plan for such period of 
 coverage for other similarly situated employees with respect to 
 whom neither termination nor layoff has occurred, without 
 respect to whether such cost is paid by the employer or 
 employee.  The employee is eligible to continue the coverage 
 until the employee obtains coverage under another group policy, 
 or for a period of 18 months after the termination or layoff 
 from employment, whichever is shorter. 

    Subd. 3.    Notice of options.  Upon termination of or 
 layoff from employment of a covered employee, the employer shall 
 inform the employee of: 

    (1) the employee's right to elect to continue the coverage; 

    (2) the amount the employee must pay monthly to the 
 employer to retain the coverage; 

    (3) the manner in which and the office of the employer to 
 which the payment to the employer must be made; and 

    (4) the time by which the payments to the employer must be 
 made to retain coverage. 

    The employee has 60 days within which to elect coverage.  
 The 60-day period shall begin to run on the date coverage would 
 otherwise terminate or on the date upon which notice of the 
 right to coverage is received, whichever is later. 

    If the covered employee or covered dependent dies during 
 the 60-day election period and before the covered employee makes 
 an election to continue or reject continuation, then the covered 
 employee will be considered to have elected continuation of 
 coverage.  The estate of the former employee or covered 
 dependent would then be entitled to a death benefit equal to the 
 amount of insurance that could have been continued less any 
 unpaid premium owing as of the date of death.  

    Notice must be in writing and sent by first class mail to 
 the employee's last known address which the employee has 
 provided to the employer. 

    A notice in substantially the following form is 
 sufficient:  "As a terminated or laid off employee, the law 
 authorizes you to maintain your group insurance benefits, in an 
 amount equal to the amount of insurance in effect on the date 
 you terminated or were laid off from employment, for a period of 
 up to 18 months.  To do so, you must notify your former employer 
 within 60 days of your receipt of this notice that you intend to 
 retain this coverage and must make a monthly payment of 
 $............ at ............. by the ............. of each 
 month." 

    Subd. 4.    Responsibility of employer and insurer.  If 
 the employer fails to notify a covered employee of the options 
 set forth in subdivision 3, or if after timely receipt of the 
 monthly payment from a covered employee the employer fails to 
 make the payment to the insurer, with the result that the 
 employee's coverage is terminated, the employer is still liable 
 for the employee's coverage to the same extent as the insurer 
 would be if the coverage were still in effect. 

    Subd. 5.    Conversion to individual policy.  A group 
 insurance policy that provides posttermination or layoff 
 coverage as required by this section must also include a 
 provision allowing a covered employee, surviving spouse, or 
 dependent at the expiration of the posttermination or layoff 
 coverage provided by subdivision 2 to obtain from the insurer 
 offering the group policy, at the employee's, spouse's, or 
 dependent's option and expense, without further evidence of 
 insurability and without interruption of coverage, an individual 
 policy of insurance contract providing the same or substantially 
 similar benefits. 

    A policy providing reduced benefits at a reduced premium 
 rate may be accepted by the employee, the spouse, or a dependent 
 in lieu of the coverage otherwise required by this subdivision.  

    Subd. 6.    Application.  This section applies to a 
 policy, certificate of insurance, or similar evidence of 
 coverage issued to a Minnesota resident or issued to provide 
 coverage to a Minnesota resident.  This section does not apply 
 to:  (1) a certificate of insurance or similar evidence of 
 coverage that meets the conditions of section 61A.093, 
 subdivision 2; or (2) a group life insurance policy that 
 contains a provision permitting the certificate holder, upon 
 termination or layoff from employment, to retain the coverage 
 provided under the group policy by paying premiums directly to 
 the insurer, provided that the employer shall give the employee 
 notice of the employee's and each related certificate holder's 
 right to continue the insurance by paying premiums directly to 
 the insurer.  The insurer may reserve the right to increase 
 premium rates after the first 18 months of continued coverage 
 provided for under clause (2).  A related certificate holder is 
 an insured spouse or dependent child of the employee.  Upon 
 termination of this group policy or at the option of the insured 
 who has continued coverage under clause (2), each covered 
 employee, spouse, and dependent child is entitled to have issued 
 to them a life conversion policy as prescribed in section 
 61A.09, subdivision 1, paragraph (h). 

    HIST: 1987 c 337 s 42; 1989 c 330 s 6; 1994 c 485 s 22; 1995 c 
 258 s 17,18; 2000 c 483 s 10; 2002 c 307 art 2 s 1; 2002 c 330 s 
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