This document includes Senate Committee Amendments incorporated into the bill on Wed, Mar 4, 2020 at 9:16 AM by lpoole.
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7 LONG TITLE
8 General Description:
9 This bill amends provisions relating to the requirement that an employer provide notice
10 regarding mini-COBRA coverage.
11 Highlighted Provisions:
12 This bill:
13 ▸ creates penalties for an employer who fails to provide certain information regarding
14 mini-COBRA coverage; and
15 ▸ requires an employer or an entity that contracts with an employer to provide health
16 insurance coverage to include information regarding mini-COBRA coverage in the
17 notice of cancellation of coverage.
18 Money Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 None
22 Utah Code Sections Affected:
23 AMENDS:
24 31A-22-722, as last amended by Laws of Utah 2019, Chapter 193
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26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 31A-22-722 is amended to read:
28 31A-22-722. Utah mini-COBRA benefits for employer group coverage.
29 (1) An employer's group policy shall offer an employee's coverage to be extended
30 under the current employer's group policy for a period of 12 months, except as provided in
31 Subsection (2). The right to extend coverage includes:
32 (a) voluntary termination;
33 (b) involuntary termination;
34 (c) retirement;
35 (d) death;
36 (e) divorce or legal separation;
37 (f) loss of dependent status;
38 (g) sabbatical;
39 (h) a disability;
40 (i) leave of absence; or
41 (j) reduction of hours.
42 (2) (a) Notwithstanding Subsection (1), an employee may not extend coverage under
43 the current employer's group insurance policy if the employee:
44 (i) fails to pay premiums or contributions in accordance with the terms of the insurance
45 policy;
46 (ii) acquires other group coverage covering all preexisting conditions including
47 maternity, if the coverage exists;
48 (iii) performs an act or practice that constitutes fraud in connection with the coverage;
49 (iv) makes an intentional misrepresentation of material fact under the terms of the
50 coverage;
51 (v) is terminated from employment for gross misconduct;
52 (vi) is not continuously covered under the current employer's group policy for a period
53 of three months immediately before the termination of the insurance policy due to an event set
54 forth in Subsection (1);
55 (vii) is eligible for an extension of coverage required by federal law;
56 (viii) establishes residence outside of this state;
57 (ix) moves out of the insurer's service area;
58 (x) is eligible for similar coverage under another group insurance policy; or
59 (xi) has the employee's coverage terminated because the employer's coverage is
60 terminated, except as provided in Subsection (8).
61 (b) The right to extend coverage under Subsection (1) applies to spouse or dependent
62 coverage, including a surviving spouse or dependents whose coverage under the insurance
63 policy terminates by reason of the death of the employee or member.
64 (3) (a) The employer shall notify the following in writing of the right to extend group
65 coverage and the payment amounts required for extension of coverage, including the manner,
66 place, and time in which the payments shall be made:
67 (i) a terminated insured;
68 (ii) an ex-spouse of an insured; or
69 (iii) if Subsection (2)(b) applies:
70 (A) a surviving spouse; and
71 (B) the guardian of surviving dependents, if different from a surviving spouse.
72 (b) The notification required in Subsection (3)(a) shall be sent first class mail within 30
73 days after the termination date of the group coverage to:
74 (i) the terminated insured's home address as shown on the records of the employer;
75 (ii) the address of the surviving spouse, if different from the insured's address and if
76 shown on the records of the employer;
77 (iii) the guardian of any dependents address, if different from the insured's address, and
78 if shown on the records of the employer; and
79 (iv) the address of the ex-spouse, if shown on the records of the employer.
80 (4) The insurer shall provide the employee, spouse, or any eligible dependent the
81 opportunity to extend the group coverage at the payment amount stated in Subsection (5) if:
82 (a) the employer policyholder does not provide the terminated insured the written
83 notification required by Subsection (3)(a); and
84 (b) the employee or other individual eligible for extension contacts the insurer within
85 60 days of coverage termination.
86 (5) (a) A premium amount for extended group coverage may not exceed 102% of the
87 group rate in effect for a group member, including an employer's contribution, if any, for a
88 group insurance policy.
89 (b) Except as provided in Subsection (5)(a), an insurer may not charge an insured an
90 additional fee, an additional premium, interest, or any similar charge for electing extended
91 group coverage.
92 (6) Except as provided in this Subsection (6), coverage extends without interruption for
93 12 months and may not terminate if the terminated insured or, with respect to a minor, the
94 parent or guardian of the terminated insured:
95 (a) elects to extend group coverage within 60 days of losing group coverage; and
96 (b) tenders the amount required to the employer or insurer.
97 (7) The insured's coverage may be terminated before 12 months if the terminated
98 insured:
99 (a) establishes residence outside of this state;
100 (b) moves out of the insurer's service area;
101 (c) fails to pay premiums or contributions in accordance with the terms of the insurance
102 policy, including any timeliness requirements;
103 (d) performs an act or practice that constitutes fraud in connection with the coverage;
104 (e) makes an intentional misrepresentation of material fact under the terms of the
105 coverage;
106 (f) becomes eligible for similar coverage under another group insurance policy; or
107 (g) has the coverage terminated because the employer's coverage is terminated, except
108 as provided in Subsection (8).
109 (8) If the current employer coverage is terminated and the employer replaces coverage
110 with similar coverage under another group insurance policy, without interruption, the
111 terminated insured, spouse, or the surviving spouse and guardian of dependents if Subsection
112 (2)(b) applies, may obtain extension of coverage under the replacement group insurance policy:
113 (a) for the balance of the period the terminated insured would have extended coverage
114 under the replaced group insurance policy; and
115 (b) if the terminated insured is otherwise eligible for extension of coverage.
116 (9) An insurer shall require an insured employer to offer to the following individuals an
117 open enrollment period at the same time as other regular employees:
118 (a) an individual who extends group coverage and is current on payment; and
119 (b) during the applicable grace period described in Subsection (3) or (4), an individual
120 who is eligible to elect to extend group coverage.
121 (10) Ŝ→ [
122 shall require an
122a a ←Ŝ group policy to Ŝ→ an employer shall ←Ŝ
123 provide a notice with the information described in Subsection (3)(a) in the notice of
124 cancellation of coverage that is sent to an employee by the insurer or the third party
125 administrator.
126 (11) (a) An employer who fails to comply with the notice requirement described in
127 Subsection (3) or (4) is subject to a fine of up to $25 a day for each day after the date of the
128 failure.
129 (b) The penalty under Subsection (11)(a):
130 (i) does not apply to an employer that is subject to the requirements of the
131 Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat. 82;
132 (ii) may not be imposed if a penalty has been imposed under federal law for the same
133 failure; and
134 (iii) may not exceed $500.
135 (c) An employer is not liable under Subsection (11)(a) if the employer is able to
136 demonstrate that the failure resulted from matters reasonably beyond the control of the
137 employer.
138 (d) Each violation under Subsection (11)(a) with respect to each individual described
139 in Subsection (3)(a)(i) through (iii) is a separate violation of this section.