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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY D. WHITE, PILEGGI, O'PAKE, BAKER, GORDNER, ALLOWAY, RAFFERTY, BRUBAKER, ERICKSON, LOGAN, KASUNIC, WAUGH, BROWNE, ORIE, WONDERLING, BOSCOLA, EARLL, SCARNATI, CORMAN, STACK AND PIPPY, FEBRUARY 24, 2009 |
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| REFERRED TO BANKING AND INSURANCE, FEBRUARY 24, 2009 |
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| AN ACT |
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1 | Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An |
2 | act relating to insurance; amending, revising, and |
3 | consolidating the law providing for the incorporation of |
4 | insurance companies, and the regulation, supervision, and |
5 | protection of home and foreign insurance companies, Lloyds |
6 | associations, reciprocal and inter-insurance exchanges, and |
7 | fire insurance rating bureaus, and the regulation and |
8 | supervision of insurance carried by such companies, |
9 | associations, and exchanges, including insurance carried by |
10 | the State Workmen's Insurance Fund; providing penalties; and |
11 | repealing existing laws," in health and accident insurance, |
12 | providing for group health policies to continue for period of |
13 | time after termination of employment or membership in health |
14 | maintenance organizations. |
15 | The General Assembly of the Commonwealth of Pennsylvania |
16 | hereby enacts as follows: |
17 | Section 1. The act of May 17, 1921 (P.L.682, No.284), known |
18 | as The Insurance Company Law of 1921, is amended by adding a |
19 | section to read: |
20 | Section 635.4. Mini-COBRA Small Employer Group Health |
21 | Policies.--(a) A group policy delivered or issued for delivery |
22 | in this Commonwealth after the effective date of this section by |
23 | an insurer which insures employes or members and their eligible |
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1 | dependents for hospital, surgical or major medical insurance |
2 | shall provide that covered employes or eligible dependents whose |
3 | coverage under the group policy would otherwise terminate |
4 | because of a qualifying event shall be entitled to continue |
5 | their hospital, surgical or major medical coverage under that |
6 | group policy subject to the following terms and conditions: |
7 | (1) Continuation shall only be available to a covered |
8 | employe or eligible dependent who has been continuously insured |
9 | under the group policy, and for similar benefits under any group |
10 | policy which it replaced, during the entire three-month period |
11 | ending with such termination. If employment is reinstated during |
12 | the continuation period, then coverage under the group policy |
13 | must be reinstated for the covered employe and any eligible |
14 | dependents who were covered under continuation. |
15 | (2) Continuation shall not be available for any person |
16 | covered under the group policy who: |
17 | (i) is covered or is eligible for coverage under Medicare; |
18 | (ii) fails to verify that he is ineligible for employer- |
19 | based group health insurance as an eligible dependent; or |
20 | (iii) is or could be covered by any other insured or |
21 | uninsured arrangement which provides hospital, surgical or major |
22 | medical coverage for individuals in a group and under which the |
23 | person was not covered immediately prior to such termination, |
24 | excluding the medical assistance program established under the |
25 | act of June 13, 1967 (P.L.31, No.21), known as the "Public |
26 | Welfare Code." |
27 | (3) Continuation need not include dental, vision care or |
28 | prescription drug benefits or any other benefits provided under |
29 | the group policy in addition to its hospital, surgical or major |
30 | medical benefits, but continuation must include any benefits |
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1 | mandated under this or any other act if those benefits are |
2 | provided under the group policy. |
3 | (4) (i) The group policy shall provide, at the time of |
4 | commencement of coverage under the plan, written notice to each |
5 | covered employe and adult eligible dependent of the employe, if |
6 | any, of the rights provided under this section. |
7 | (ii) The employer of a covered employe under a plan must |
8 | notify the administrator or its designee of a qualifying event |
9 | within thirty days of the date of the qualifying event. |
10 | (iii) Each covered employe or eligible dependent is |
11 | responsible for notifying the administrator or its designee of |
12 | the occurrence of any qualifying event within sixty days after |
13 | the date of the qualifying event and each eligible dependent who |
14 | is determined, under Title II or XVI of the Social Security Act |
15 | (49 Stat. 620, 42 U.S.C. § 301 et seq.), to have been disabled |
16 | at any time during the first sixty days of continuation coverage |
17 | under this section is responsible for notifying the plan |
18 | administrator or its designee of such determination within sixty |
19 | days after the date of the determination and for notifying the |
20 | plan administrator or its designee within thirty days after the |
21 | date of any final determination under Title II or XVI of the |
22 | Social Security Act that the eligible dependent is no longer |
23 | disabled. |
24 | (iv) In the case of a qualifying event described in |
25 | subsection (e)(5)(i), (ii), (iv) or (vi), the administrator or |
26 | its designee shall notify any eligible dependent with respect to |
27 | such event, of such dependent's rights under this section. |
28 | (v) In the case of a qualifying event described in |
29 | subsection (e)(iii) or (v) where the covered employe notifies |
30 | the administrator or its designee under subparagraph (iii), the |
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1 | administrator or its designee shall notify any eligible |
2 | dependent with respect to such event of such dependent's rights |
3 | under this section. |
4 | (vi) For purposes of subparagraph (iv) and (v), any |
5 | notification shall be made within fourteen days of the date on |
6 | which the administrator or its designee is notified under |
7 | subparagraph (ii) or (iii), whichever is applicable, and any |
8 | such notification to an eligible dependent who is the parent or |
9 | guardian of one or more eligible dependents shall be treated as |
10 | notification to all other eligible dependents residing with such |
11 | parent or guardian at the time such notification is made. |
12 | (vii) Except as otherwise specified in an election, any |
13 | election of continuation coverage by an eligible dependent shall |
14 | be deemed to include an election of continuation coverage on |
15 | behalf of any other eligible dependent who would lose coverage |
16 | under the plan by reason of the qualifying event. If there is a |
17 | choice among types of coverage under the plan, each eligible |
18 | dependent is entitled to make a separate selection among such |
19 | types of coverage. |
20 | (5) (i) The covered employe or eligible dependent |
21 | requesting the continuation of coverage must pay to the group |
22 | policyholder, on a monthly basis, the amount of contribution |
23 | required to continue the coverage. |
24 | (ii) The premium contribution may not be more than one |
25 | hundred five percent of the group rate of the insurance being |
26 | continued on the due date of each payment; but, if any benefits |
27 | are omitted as provided by paragraph (3), the premium |
28 | contribution shall be reduced accordingly. |
29 | (iii) Nothing in this section shall require the employer to |
30 | contribute to the deductible of the employe holding an HSA as |
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1 | defined in the Internal Revenue Code of 1986 (Public Law 99-514, |
2 | 26 U.S.C. § 223(d)) as a component of the group policy after the |
3 | termination date as long as scheduled payments have been made. |
4 | (6) Continuation of coverage under the group policy for any |
5 | covered employe or eligible dependent shall terminate upon |
6 | failure to satisfy paragraph (2) or, if earlier, at the first to |
7 | occur of the following: |
8 | (i) the date nine months after the date the covered |
9 | employe's or eligible dependent's coverage under the group would |
10 | have terminated because of a qualifying event; |
11 | (ii) if the employe or member fails to make timely payment |
12 | of a required premium contribution, the end of the period for |
13 | which contributions were made; |
14 | (iii) the date on which the group policy is terminated. |
15 | (b) A covered employe shall be entitled to obtain a |
16 | conversion policy as stated in section 621.2. The right to a |
17 | converted policy pursuant to this act for a covered employe or |
18 | eligible dependent entitled to continuation of coverage under |
19 | this act shall commence upon termination of the continued |
20 | coverage provided for under this act. |
21 | (c) Coverage as required by this section may not be |
22 | conditioned upon, or discriminated on, the basis of lack of |
23 | evidence or insurability. |
24 | (d) This section shall only apply to those persons who |
25 | satisfy both of the following criteria: |
26 | (1) Persons who are not subject to the continuation and |
27 | conversion provisions set forth in Title 1, Subtitle B, Part 6 |
28 | of the Employee Retirement Income Security Act of 1974 (Public |
29 | Law 93-406, 88 Stat. 829) or Title XXII of the Public Health |
30 | Service Act (58 Stat. 682, 42 U.S.C. § 201 et seq.). |
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1 | (2) Persons, and the eligible dependents of such persons, |
2 | who are employed by an employer that normally employed between |
3 | two and nineteen employes on a typical business day during the |
4 | preceding year. |
5 | (e) For purposes of this section, the following words and |
6 | phrases shall have the meanings given to them in this subsection |
7 | unless the context clearly indicates otherwise: |
8 | (1) "Covered employe" means an individual who is or was |
9 | provided coverage under a group policy by virtue of the |
10 | performance of services by the individual for one or more |
11 | persons maintaining the policy, including as an employe defined |
12 | in section 401(c)(1) of the Internal Revenue Code of 1986 |
13 | (Public Law 99-514, 26 U.S.C. § 1 et seq.). Such term includes |
14 | employes and members as those terms are used in section 621.2. |
15 | (2) "Election period" means the period which: |
16 | (i) begins not later than the date on which coverage |
17 | terminates under the plan by reason of a qualifying event; |
18 | (ii) is of at least sixty days' duration; and |
19 | (iii) ends not earlier than sixty days after the later of: |
20 | (A) the date described in subparagraph (i); or |
21 | (B) in the case of any eligible dependent who receives |
22 | notice under subsection (a)(4)(iv), the date of such notice. |
23 | (3) "Group policy" means any group health insurance policy, |
24 | subscriber contract, certificate or plan which provides health |
25 | or sickness and accident coverage which is offered by an |
26 | insurer. The term shall not include any of the following: |
27 | (i) An accident only policy. |
28 | (ii) A credit only policy. |
29 | (iii) A long-term or disability income policy. |
30 | (iv) A specified disease policy. |
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1 | (v) A Medicare supplement policy. |
2 | (vi) A Civilian Health and Medical Program of the Uniformed |
3 | Services (CHAMPUS) supplement policy. |
4 | (vii) A fixed indemnity policy. |
5 | (viii) A dental only policy. |
6 | (ix) A vision only policy. |
7 | (x) A workers' compensation policy. |
8 | (xi) An automobile medical payment policy under 75 Pa.C.S. |
9 | (relating to vehicles). |
10 | (xii) Any other similar policies providing for limited |
11 | benefits. |
12 | (4) "Insurer" means a company or health insurance entity |
13 | licensed in this Commonwealth to issue any health, sickness or |
14 | accident policy or subscriber contract or certificate or plan |
15 | that provides medical or health care coverage by a health care |
16 | facility or licensed health care provider that is offered or |
17 | governed under this act or any of the following: |
18 | (i) The act of December 29, 1972 (P.L.1701, No.364), known |
19 | as the "Health Maintenance Organization Act." |
20 | (ii) The act of May 18, 1976 (P.L.123, No.54), known as the |
21 | "Individual Accident and Sickness Insurance Minimum Standards |
22 | Act." |
23 | (iii) 40 Pa.C.S. Ch. 61 (relating to hospital plan |
24 | corporations) or 63 (relating to professional health services |
25 | plan corporations). |
26 | (5) "Qualifying event" means, with respect to any covered |
27 | employe, any of the following events which, but for the |
28 | continuation of coverage required under this section, would |
29 | result in the loss of coverage of an eligible dependent: |
30 | (i) The death of a covered employe. |
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1 | (ii) The termination, other than by reason of such employe's |
2 | gross misconduct, or reduction of hours of the covered employe's |
3 | employment. |
4 | (iii) The divorce or legal separation of the covered employe |
5 | from an eligible dependent. |
6 | (iv) The covered employe becoming entitled to benefits under |
7 | Title XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. |
8 | § 301 et seq.). |
9 | (v) A dependent child ceasing to be a dependent child under |
10 | the generally applicable requirements of the plan. |
11 | (vi) A proceeding in a case under 11 U.S.C. (relating to |
12 | bankruptcy), with respect to the employer from whose employment |
13 | the covered employe retired at any time. In the case of an event |
14 | described in this subparagraph, a loss of coverage includes a |
15 | substantial elimination of coverage with respect to an eligible |
16 | dependent within one year before or after the date of |
17 | commencement of the proceeding. |
18 | (f) The department may promulgate regulations as necessary |
19 | for the implementation and administration of this section. |
20 | Section 2. This act shall take effect in 120 days. |
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