April 21, 2010, Introduced by Senator SWITALSKI and referred to the Committee on Economic Development and Regulatory Reform.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
(MCL 500.100 to 500.8302) by adding section 3704.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3704. (1) A carrier providing a health benefit plan to a
small employer shall provide that, if all or any portion of the
coverage of a covered individual ceases because of death or
termination of employment or membership in the class eligible for
coverage under the health benefit plan, the covered individual may
continue coverage as provided in this section.
(2) The time period that a covered individual may continue
coverage under this section is a period of 18 months from the date
the covered individual's employment is terminated but not to exceed
the time from the date the covered individual's employment is
terminated until the covered individual, surviving spouse of a
deceased covered individual, or any other dependent of the covered
individual who was covered under the health benefit plan becomes
employed by another employer and eligible for benefits under
another health maintenance organization contract, expense-incurred
hospital, medical, or surgical policy or certificate, health care
corporation certificate, or other health coverage plan.
(3) A carrier shall make the extended coverage available to
the covered individual, the surviving spouse of a deceased covered
individual, and any other dependent of the covered individual who
was covered under the health benefit plan for the period under
subsection (2) at a monthly premium not to exceed 102% of the
monthly premium for the group in which he or she was previously a
member or at a monthly premium not to exceed 102% of the monthly
premium as may be in effect from time to time for the same group
the date the covered individual's employment is terminated. The
covered individual, the surviving spouse of a deceased covered
individual, and any other dependent of the covered individual who
was covered under the health benefit plan shall not be required to
pay more than 1 monthly premium per month at a time.
(4) To elect to continue coverage under this section, the
covered individual, the surviving spouse of a deceased covered
individual, and any other dependent of the covered individual who
was covered under the health benefit plan shall make the election
in the form prescribed by the carrier within 60 days after the date
the covered individual's employment is terminated and shall pay the
required monthly premium to the employer or to the carrier or its
producer, throughout the extended coverage period.
(5) If an employer receives the monthly premium on a timely
basis from the covered individual, the surviving spouse of a
deceased covered individual, or any other dependent of the covered
individual who was covered under the health benefit plan, and the
employer fails to make payment to the carrier with the result that
coverage is terminated, the employer is liable for benefits to the
same extent as the carrier would have been liable if coverage had
not been terminated. As used in this subsection, "receives the
monthly premium on a timely basis" means the employer's receipt of
the monthly premium for the extended coverage from the covered
individual, the surviving spouse of a deceased covered individual,
or any other dependent of the covered individual who was covered
under the health benefit plan occurred within the dates or by the
date indicated by the employer as a requirement of this section at
the time of the election of the extended coverage. This subsection
does not apply to an employer whose workplace ceases to exist.
(6) Upon termination of the extended coverage period, the
covered individual, the surviving spouse of a deceased covered
individual, or any other dependent of the covered individual who
was covered under the health benefit plan is entitled to exercise
any option that is provided in the health benefit plan to elect an
individual conversion policy, as described in section 3612 or
section 410a of the nonprofit health care corporation act of 1980,
1980 PA 350, MCL 550.1410a.
(7) A small employer that provides a health benefit plan to
its employees shall post a conspicuous notice to the employees of
their options under this section.
(8) As used in this section only, "small employer" means any
person, firm, corporation, partnership, limited liability company,
or association actively engaged in business who, on at least 50% of
its working days during the preceding and current calendar years,
employed at least 2 but not more than 19 eligible employees.