26-19-113. Continuation of group coverage after termination of employment or membership.

(a) A non-COBRA group policy or certificate of insurance on a master policy of a group delivered or issued for delivery in this state on or after July 1, 1995, issued by any insurance company, nonprofit health service corporation, health maintenance organization or any other insurer that provides hospital, surgical or major medical expense insurance or any accommodation of these coverages on an expense incurred basis, but not a policy that provides benefits for specific diseases or for accidental injuries only, shall provide that employees, members or their covered eligible dependents whose insurance under the group policy would otherwise terminate because of termination of employment or membership or eligibility for coverage are entitled to continue their hospital, surgical and major medical insurance under that group policy, for themselves, their eligible dependents or both, subject to all of the group policy's terms and conditions applicable to those forms of insurance and to the following conditions:

(i) Continuation is only available to an employee or member who has been continuously insured under the group policy and for similar benefits under any group policy which it replaced, during the entire three (3) month period ending with the termination of eligibility;

(ii) Continuation is not available for any person who is:

(A) Covered by medicare, excluding his spouse or dependent children who shall be entitled to continuation; or

(B) Covered by any other insured or uninsured arrangement which provides hospital, surgical or medical coverage for individuals in a group.

(iii) Continuation need not include dental or vision care benefits or any other benefits provided under the group policy in addition to its hospital, surgical or major medical benefits unless the insurer previously included such benefits and the insured requests such benefits;

(iv) An employee or member who wishes continuation of coverage shall request the continuation in writing within the thirty-one (31) day period following the date of termination of coverage;

(v) An employee or member electing continuation shall pay to the insurer, third party administrator, group policyholder or the employer, as designated by the employer, on a monthly basis in advance, the amount of contribution required by the policyholder or employer, but not more than one hundred two percent (102%) of the group rate for the insurance being continued under the group policy on the due date of each payment. The employer's designation with regard to whom the electing employee or member shall pay his contribution shall be made in writing prior to the date the first contribution by the employee or member is due. The employee's or member's written election of continuation, together with the first contribution required to establish contributions on a monthly basis in advance, shall be given to the insurer, third party administrator, policyholder or employer within thirty-one (31) days of the date the employee's or member's insurance would otherwise terminate;

(vi) Continuation of insurance under the group policy for any person terminates when the person fails to satisfy paragraph (ii) of this subsection or, if earlier, at the first to occur of the following:

(A) The date twelve (12) months after the date the employee's or member's insurance under the policy would otherwise have terminated because of termination of employment or membership;

(B) If the employee or member fails to make timely payment of a required contribution, the end of the period for which contributions were made;

(C) The date on which the group policy is terminated or, in the case of an employee, the date the employer terminates participation under the group policy. However, if this subparagraph applies and the coverage ceasing by reason of the termination is replaced by similar coverage under another group policy, the following apply:

(I) The employee or member may become covered under that other group policy for the balance of the period that the employee or member would have remained covered under the prior group policy in accordance with this paragraph had a termination described in this subparagraph not occurred;

(II) The minimum level of benefits to be provided by the other group policy is the applicable level of benefits of the prior group policy reduced by any benefits payable under that prior group policy;

(III) The prior group policy shall continue to provide benefits to the extent of its accrued liabilities and extensions of benefits as if the replacement had not occurred.

(vii) A notification of the continuation privilege shall be included in each certificate of coverage;

(viii) Upon termination of the continuation period, the member, surviving spouse or dependent is entitled to exercise any option which is provided in the group plan to elect a conversion policy. The member electing a conversion policy shall notify the carrier of the election and pay the required premium within thirty-one (31) days of the termination of the continued coverage under the group contract.

(b) As used in subsection (a) of this section, "non-COBRA" means any group policy or certificate of insurance on a master policy of a group policy which is not subject to continuation of rights as provided under the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.