AN ACT CONCERNING EMPLOYER HEALTH INSURANCE PREMIUM PAYMENTS FOR TERMINATED EMPLOYEES.

AN ACT CONCERNING EMPLOYER HEALTH INSURANCE PREMIUM PAYMENTS FOR TERMINATED EMPLOYEES.

This bill permits an employer to stop paying group health insurance premiums related to an employee and his or her dependents 72 hours after the employee quits or is terminated, if it makes an election that satisfies the bill's provisions.

It outlines related requirements and conditions for the (1) employer and (2) applicable insurer, HMO, hospital or medical service corporation, or fraternal benefit society to which the employer paid premiums for the insurance.

The bill does not apply if (1) an employee is laid off or (2) a collective bargaining agreement requires that an employer pay an employee's insurance premiums after his or her termination.

An employer making a permissible election must notify the affected employee and insurer within 72 hours of the employee's termination. (It appears that the notification requirement applies also with respect to an HMO, hospital or medical service corporation, or fraternal benefit society. )

The bill requires an employer to reimburse the affected employee his or her portion, if any, of premiums that the insurance carrier credits or refunds to the employer.

An insurer, HMO, hospital or medical service corporation, or fraternal benefit society must:

1. when a policy is issued or renewed, give an employer information about the election, including a notice that it is the employer's responsibility to return to an affected employee his or her portion of credited premiums;

2. credit prepaid premiums to an employer that (a) makes a permissible election and (b) notifies the employee and insurer within 72 hours of the employee's termination; and

3. apply the credit to the employer's next monthly premium bill or, if the policy is not renewed, issue the employer a refund.

Under the bill, the premium credit or refund equals the amount of premium previously paid that is attributable to insuring the employee and his or her dependents for a period after the employee's termination date. But, the bill specifies that no credit will be made for the first 72 hours following the employee's termination (which is the time period in which the employer must give notice of its election to the employee and insurer).

Under the bill, “employer” means any owner, person, partnership, corporation, limited liability company, or association acting as or on behalf of an employer, or in an employer's interest in relation to employees, including the state and any state political subdivision.

Yea

Nay

(02/10/2009)