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| PRIOR PRINTER'S NOS. 446, 748 | PRINTER'S NO. 783 |
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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, PIPPY, VANCE AND WASHINGTON, FEBRUARY 24, 2009 |
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| AS AMENDED ON THIRD CONSIDERATION, MARCH 31, 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 in effect or delivered or issued | <-- |
22 | for delivery in this Commonwealth on or after the effective date | <-- |
23 | of this section by an insurer which insures employes or members | <-- |
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1 | and their eligible dependents for hospital, surgical or major |
2 | medical insurance shall provide that covered employes or |
3 | eligible dependents whose coverage under the group policy would |
4 | otherwise terminate because of a qualifying event shall be |
5 | entitled to continue their hospital, surgical or major medical |
6 | coverage under that group policy subject to the following terms |
7 | and conditions: |
8 | (1) Continuation shall only be available to a covered |
9 | employe or eligible dependent who has been continuously insured |
10 | under thea group policy, and or for similar benefits under any | <-- |
11 | group policy which it replaced, during the entire three-month |
12 | period ending with such termination. If employment is reinstated |
13 | during the continuation period, then coverage under the group |
14 | policy must be reinstated for the covered employe and any |
15 | eligible dependents who were covered under continuation. |
16 | (2) Continuation shall not be available for any person |
17 | covered under the group policy who: |
18 | (i) is covered or is eligible for coverage under Medicare; |
19 | (ii) fails to verify that he is ineligible for employer- |
20 | based group health insurance as an eligible dependent; or |
21 | (iii) is or could be covered by any other insured or |
22 | uninsured arrangement which provides hospital, surgical or major |
23 | medical coverage for individuals in a group and under which the |
24 | person was not covered immediately prior to such termination, |
25 | excluding the medical assistance program established under the |
26 | act of June 13, 1967 (P.L.31, No.21), known as the "Public |
27 | Welfare Code."Code," the children's health care program | <-- |
28 | established under Article XXIII or the adult basic coverage |
29 | insurance program established under Chapter 13 of the act of |
30 | June 26, 2001 (P.L.755, No.77), known as the "Tobacco Settlement |
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1 | Act," and any successors thereto. |
2 | (3) Continuation need not include dental, vision care or | <-- |
3 | prescription drug benefits or any other benefits provided under |
4 | the group policy in addition to its hospital, surgical or major |
5 | medical benefits, but continuation |
6 | (3) Continuation must include any benefits mandated under | <-- |
7 | this or any other act if those benefits are provided under the |
8 | group policy. |
9 | (4) (i) The group policy shall provide, at the time of | <-- |
10 | commencement of coverage under the plan, written notice to each |
11 | covered employe and adult eligible dependent of the employe, if |
12 | any, notice to the policyholder of the rights provided under | <-- |
13 | this section. Unless already provided in the group policy, an | <-- |
14 | insurer who has issued a group policy in effect as of the |
15 | effective date of this section shall provide such notice to the |
16 | policyholder within 45 days of the effective date. |
17 | (ii) The employer of a covered employe under a plangroup | <-- |
18 | policy must notify the administrator or its designee, the | <-- |
19 | covered employe and the insurer of a qualifying event within |
20 | thirty days of the date of the qualifying event.qualifying | <-- |
21 | event. Notice to the covered employe shall include notice of the |
22 | rights set forth in this section. |
23 | (iii) Each covered employe or eligible dependent is | <-- |
24 | responsible for notifyingshall notify the administrator or its | <-- |
25 | designee of the occurrence of any qualifying event within sixty | <-- |
26 | days after the date of the qualifying event and each eligible |
27 | dependent who is determined, under Title II or XVI of the Social |
28 | Security Act (49 Stat. 620, 42 U.S.C. § 301 et seq.), to have |
29 | been disabled at any time during the first sixty days of |
30 | continuation coverage under this section is responsible for |
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1 | notifying the plan administrator or its designee of such |
2 | determination within sixty days after the date of the |
3 | determination and for notifying the plan administrator or its |
4 | designee within thirty days after the date of any final |
5 | determination under Title II or XVI of the Social Security Act |
6 | that the eligible dependent is no longer disabled. |
7 | (iv) In the case of a qualifying event described in |
8 | subsection (e)(5)(i), (ii), (iv) or (vi), the administrator or |
9 | its designee shall notify any eligible dependent with respect to |
10 | such event, of such dependent's rights under this section. |
11 | (v) In the case of a qualifying event described in |
12 | subsection (e)(iii) or (v) where the covered employe notifies |
13 | the administrator or its designee under subparagraph (iii), the |
14 | administrator or its designee shall notify any eligible |
15 | dependent with respect to such event of such dependent's rights |
16 | under this section. |
17 | (vi) For purposes of subparagraph (iv) and (v), any |
18 | notification shall be made within fourteen days of the date on |
19 | which the administrator or its designee is notified under |
20 | subparagraph (ii) or (iii), whichever is applicable, and any |
21 | such notification to an eligible dependent who is the parent or |
22 | guardian of one or more eligible dependents shall be treated as |
23 | notification to all other eligible dependents residing with such |
24 | parent or guardian at the time such notification is made. |
25 | (vii)its election of continuation coverage under this section | <-- |
26 | within thirty days of notice under subparagraph (ii). The |
27 | coverage shall be effective as of the date of the qualifying |
28 | event and shall be the same as the coverage in effect at the |
29 | time of the qualifying event or any replacement coverage. |
30 | (iv) An administrator or its designee notified under |
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1 | subparagraph (iii) of an election of continuation coverage shall |
2 | notify the insurer within fourteen days of the covered employe's |
3 | or eligible dependent's election. |
4 | (v) Except as otherwise specified in an election, any |
5 | election of continuation coverage by an eligible dependent shall |
6 | be deemed to include an election of continuation coverage on |
7 | behalf of any other eligible dependent who would lose coverage |
8 | under the plan by reason of the qualifying event. If there is a | <-- |
9 | choice among types of coverage under the plan, each eligible |
10 | dependent is entitled to make a separate selection among such |
11 | types of coverage. |
12 | (5) (i) The covered employe or eligible dependent |
13 | requesting the continuation of coverage must pay to the group | <-- |
14 | policyholderadministrator or its designee, on a monthly basis, | <-- |
15 | the amount of contribution required to be paid by the covered | <-- |
16 | employe or eligible dependent to continue the coverage. |
17 | (ii) The premium contribution may not be more than one |
18 | hundred five percent of the group rate of the insurance being |
19 | continued on the due date of each payment; but, if any benefits | <-- |
20 | are omitted as provided by paragraph (3), the premium |
21 | contribution shall be reduced accordingly. |
22 | (iii) Nothing in this section shall require the employer to |
23 | contribute to the deductible of the employe holding an HSA a | <-- |
24 | health savings account as defined in the Internal Revenue Code |
25 | of 1986 (Public Law 99-514, 26 U.S.C. § 223(d)) or other medical | <-- |
26 | spending account as a component of the group policy after the |
27 | termination date as long as scheduled payments have been made. |
28 | (6)(6) (i) Continuation of coverage under the group policy | <-- |
29 | for any covered employe or eligible dependent shall terminate |
30 | upon failure to satisfy paragraph (2) or, if earlier, at the |
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1 | first to occur of the following: |
2 | (i)(A) the date nine months after the date the covered | <-- |
3 | employe's or eligible dependent's coverage under the group would |
4 | have terminated because of a qualifying event; |
5 | (ii)(B) if the employe or member fails to make timely | <-- |
6 | payment of a required premium contribution, the end of the |
7 | period for which contributions were made; |
8 | (iii)(C) the date on which the group policy is terminated. | <-- |
9 | (ii) A covered employe or eligible dependent shall provide | <-- |
10 | written notice to the administrator or its designee within |
11 | fourteen days if, pursuant to paragraph (2), coverage should not |
12 | occur. |
13 | (b) A covered employe shall be entitled to obtain a |
14 | conversion policy as stated in section 621.2. The right to a |
15 | converted policy pursuant to this act for a covered employe or |
16 | eligible dependent entitled to continuation of coverage under |
17 | this act shall commence upon termination of the continued |
18 | coverage provided for under this act. |
19 | (c) Coverage as required by this section may not be |
20 | conditioned upon, or discriminated on, the basis of lack of |
21 | evidence orof insurability. | <-- |
22 | (d) In the case of a qualifying event consisting of the | <-- |
23 | involuntary termination of the covered employe's employment |
24 | occurring on or after the effective date of this section and |
25 | before January 1, 2010, or such other date as specified by any |
26 | amendment to or successor of section 3001 of Division B, Title |
27 | III of the American Recovery and Reinvestment Act of 2009 |
28 | (Public Law 111-5, 123 Stat. 115), a covered employe or eligible |
29 | dependent shall be entitled to premium assistance as provided in |
30 | section 3001 of Division B, Title III of the American Recovery |
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1 | and Reinvestment Act of 2009, pursuant to the procedures and |
2 | requirements set forth therein. |
3 | (e) This section shall only apply to those persons who |
4 | satisfy both of the following criteria: |
5 | (1) Persons who are not subject to the continuation and |
6 | conversion provisions set forth in Title 1, Subtitle B, Part 6 |
7 | of the Employee Retirement Income Security Act of 1974 (Public |
8 | Law 93-406, 88 Stat. 82929 U.S.C. § 1161 et seq.) or Title XXII | <-- |
9 | of the Public Health Service Act (58 Stat. 682, 42 U.S.C. § 201 | <-- |
10 | et seq.Public Law 99-272, 42 U.S.C. § 300bb-1 et seq.). | <-- |
11 | (2) Persons, and the eligible dependents of such persons, |
12 | who are employed by an employer that normally employed between |
13 | two and nineteen employes on a typical business day during the |
14 | preceding year. |
15 | (e)(f) The department may promulgate regulations as | <-- |
16 | necessary for the implementation and administration of this |
17 | section. |
18 | (g) For purposes of this section, the following words and |
19 | phrases shall have the meanings given to them in this subsection |
20 | unless the context clearly indicates otherwise: |
21 | (1) "Administrator" means the person specifically designated | <-- |
22 | by an employer by written agreement to manage the administration |
23 | of a group policy issued to an employer or, if an administrator |
24 | is not so designated, the employer. |
25 | (2) "Covered employe" means an individual who is or was |
26 | provided coverage under a group policy by virtue of the |
27 | performance of services by the individual for one or more |
28 | persons maintaining the policy, including as an employe defined |
29 | in section 401(c)(1) of the Internal Revenue Code of 1986 |
30 | (Public Law 99-514, 26 U.S.C. § 1 et seq.401(c)(1)). Such term | <-- |
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1 | includes employes and members as those terms are used in section |
2 | 621.2. |
3 | (2) "Election period" means the period which: | <-- |
4 | (i) begins not later than the date on which coverage |
5 | terminates under the plan by reason of a qualifying event; |
6 | (ii) is of at least sixty days' duration; and |
7 | (iii) ends not earlier than sixty days after the later of: |
8 | (A) the date described in subparagraph (i); or |
9 | (B) in the case of any eligible dependent who receives |
10 | notice under subsection (a)(4)(iv), the date of such notice. |
11 | (3) "Eligible dependent" means: | <-- |
12 | (i) With respect to a covered employe under a group health |
13 | plan, any other individual who on the day before the qualifying |
14 | event for that employe is a beneficiary under the plan: |
15 | (A) as the spouse of the covered employe; or |
16 | (B) as the dependent child of the employe. |
17 | (ii) In the case of a qualifying event described in |
18 | paragraph (6)(ii), the term includes a covered employe. |
19 | (iii) In the case of a qualifying event described in |
20 | paragraph (6)(vi), the term includes a covered employe who had |
21 | retired on or before the date of substantial elimination of |
22 | coverage and any other individual who, on the day before such |
23 | qualifying event, is a beneficiary under the plan: |
24 | (A) as the spouse of the covered employe; |
25 | (B) as the dependent child of the employe; or |
26 | (C) as the surviving spouse of the covered employe. |
27 | The term shall also include a child who is born to or placed for |
28 | adoption with a covered employe during the period of |
29 | continuation coverage under this section. |
30 | (3)(4) "Group policy" means any group health insurance | <-- |
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1 | policy, subscriber contract, certificate or plan which provides |
2 | health or sickness and accident coverage which is offered by an |
3 | insurer. The term shall not include any of the following: |
4 | (i) An accident only policy. |
5 | (ii) A credit only policy. |
6 | (iii) A long-term care or disability income policy. |
7 | (iv) A specified disease policy. |
8 | (v) A Medicare supplement policy. |
9 | (vi) A Civilian Health and Medical Program of the Uniformed |
10 | Services (CHAMPUS) supplement policy. |
11 | (vii) A fixed indemnity policy. |
12 | (viii) A dental only policy. |
13 | (ix) A vision only policy. |
14 | (x) A workers' compensation policy. |
15 | (xi) An automobile medical payment policy under 75 Pa.C.S. |
16 | (relating to vehicles). |
17 | (xii) Any other similar policies providing for limited |
18 | benefits. |
19 | (4)(5) "Insurer" means a company or health insurance entity | <-- |
20 | licensed in this Commonwealth to issue any health, sickness or |
21 | accident policy or subscriber contract or certificate or plan |
22 | that provides medical or health care coverage by a health care |
23 | facility or licensed health care provider that is offered or |
24 | governed under Article XXIV or other provision of this act or | <-- |
25 | any of the following: |
26 | (i) The act of December 29, 1972 (P.L.1701, No.364), known |
27 | as the "Health Maintenance Organization Act." |
28 | (ii) The act of May 18, 1976 (P.L.123, No.54), known as the | <-- |
29 | "Individual Accident and Sickness Insurance Minimum Standards |
30 | Act." |
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1 | (iii)(ii) 40 Pa.C.S. Ch. 61 (relating to hospital plan | <-- |
2 | corporations) or 63 (relating to professional health services |
3 | plan corporations). |
4 | (5)(6) "Qualifying event" means, with respect to any covered | <-- |
5 | employe, any of the following events which, but for the |
6 | continuation of coverage required under this section, would |
7 | result in the loss of coverage of an eligible dependent: |
8 | (i) The death of a covered employe. |
9 | (ii) The termination, other than by reason of such employe's |
10 | gross misconduct, or reduction of hours of the covered employe's |
11 | employment. |
12 | (iii) The divorce or legal separation of the covered employe |
13 | from an eligible dependent. |
14 | (iv) The covered employe becoming entitled to benefits under |
15 | Title XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. |
16 | § 3011395 et seq.). | <-- |
17 | (v) A dependent child ceasing to be a dependent child under |
18 | the generally applicable requirements of the plan. |
19 | (vi) A proceeding in a case under 11 U.S.C. (relating to |
20 | bankruptcy), with respect to the employer from whose employment |
21 | the covered employe retired at any time. In the case of an event |
22 | described in this subparagraph, a loss of coverage includes a |
23 | substantial elimination of coverage with respect to an eligible |
24 | dependent within one year before or after the date of |
25 | commencement of the proceeding. |
26 | (f) The department may promulgate regulations as necessary | <-- |
27 | for the implementation and administration of this section. |
28 | Section 2. This act shall take effect in 12030 days. | <-- |
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