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Minnesota Legislature

Office of the Revisor of Statutes

    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 beneficiary
previously selected by 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
    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).
History: 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 7; 2006 c 255 s 6