SENATE DOCKET, NO. 567        FILED ON: 1/13/2009

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 504

The Commonwealth of Massachusetts

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In the Year Two Thousand Nine

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An Act increasing options in the case of loss of group health insurance coverage..

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1.   Chapter one hundred and seventy five is hereby amended by adding the following new section one hundred and ten L after section one hundred and ten K:

Section 110L.   Short-Term Conversion Coverage.

 (a) Every general, blanket, or group policy of health, accident and sickness insurance issued or delivered within or without the commonwealth by an insurer licensed under chapter one hundred and seventy five which covers residents of the commonwealth shall contain a provision that, in the event the carrier ceases to provide coverage under the policy, the carrier shall offer short-term conversion coverage to any individual covered under that policy who is not eligible for an alternative general, blanket or group policy or otherwise eligible for continued group coverage.

(b) Short-term conversion coverage shall: (1) consist of coverage which is identical to the coverage that the carrier had provided under the prior policy; and (2) extend at the option of the insured for up to, but no longer than, six months after the date the carrier ceases to provide the coverage under the general, blanket or group policy.

(c) The carrier may require payment of a premium for any period of short-term conversion coverage, except that such premium shall not exceed one hundred and ten percent of the premium that the carrier would have charged such person for similar coverage under the prior policy.   At the election of the payor, premium payments may be made in monthly installments.

(d) Within fourteen days of the date on which the carrier ceases to provide the general, blanket or group policy, or, in the event that a policy is terminated retroactively because the group failed to pay premiums, within sixty days of the retroactive policy termination date, the carrier shall provide written notice explaining short-term conversion coverage to every individual who was covered under the policy; provided, however, the carrier shall not provide such notice when all individuals who were covered under the ceased policy have access to an alternative group health benefit plan.  Individuals shall have thirty days from the date of the carrier’s written notice to elect to participate in short-term conversion coverage, which coverage shall begin on the date that the general, blanket or group policy ceased to provide coverage.

(e) Short-term conversion coverage may not be conditioned upon, or discriminate on the basis of lack of, evidence of insurability.

(f) Short-term conversion coverage issued in accordance with this section shall not be subject to chapter one hundred and seventy-six M.  Nothing in this section shall prohibit a carrier that is required to offer short-term conversion coverage from concurrently offering a conversion nongroup health plan as that term is defined in chapter one hundred and seventy-six M.

(g) Short-term conversion coverage issued under this section shall be considered a health plan and a qualifying health plan pursuant to chapter one hundred and seventy-six N.

SECTION 2.Chapter one hundred and seventy six A is hereby amended by adding the following new section eight W after section eight V.

Section 8W.Short-Term Conversion Coverage.

(a) Every group hospital service plan issued or delivered within or without the commonwealth by a nonprofit hospital service corporation which covers residents of the commonwealth shall contain a provision that, in the event the nonprofit hospital service corporation ceases to provide coverage under the plan, the corporation shall offer short-term conversion coverage to any individual covered under that plan who is not eligible for an alternative group health benefit plan or otherwise eligible for continued group coverage.

(b) Short-term conversion coverage shall: (1) consist of coverage which is identical to the coverage that the corporation had provided under the group hospital service plan; and (2) extend at the option of the insured for up to, but no longer than, six months after the date the corporation ceases to provide the coverage under the hospital service plan.

(c) The corporation may require payment of a premium for any period of short-term conversion coverage, except that such premium shall not exceed one hundred and ten percent of the premium that the corporation would have charged such person for similar coverage under the prior plan.   At the election of the payor, premium payments may be made in monthly installments.

(d) Within fourteen days of the date on which the corporation ceases to provide the group hospital service plan, or, in the event that a group hospital service plan is terminated retroactively because the group failed to pay premiums, within sixty days of the retroactive group plan termination date, the corporation shall provide written notice explaining short-term conversion coverage to every individual who was covered under the group plan; provided, however, the corporation shall not provide such notice when all individuals who were covered under the ceased plan have access to an alternative group health benefit plan.  Individuals shall have thirty days from the date of the corporation’s written notice to elect to participate in short-term conversion coverage, which coverage shall begin on the date that the group hospital service plan ceased to provide coverage.

(e) Short-term conversion coverage may not be conditioned upon, or discriminate on the basis of lack of, evidence of insurability.

(f) Short-term conversion coverage issued in accordance with this section shall not be subject to chapter one hundred and seventy-six M. Nothing in this section shall prohibit a nonprofit hospital service corporation that is required to offer short-term conversion coverage from concurrently offering a conversion nongroup health plan as that term is defined in chapter one hundred and seventy-six M

(g) Short-term conversion coverage issued under this section shall be considered a health plan and a qualifying health plan pursuant to chapter one hundred and seventy-six N.

SECTION 3. Chapter one hundred and seventy six B is hereby amended by adding the following new section six C after section six B.

Section 6C.Short-Term Conversion Coverage.

(a) Every group medical service agreement issued or delivered within or without the commonwealth by a medical service corporation which covers residents of the commonwealth shall contain a provision that, in the event the corporation ceases to provide coverage under the service agreement, the medical service corporation  shall offer short-term conversion coverage to any individual covered under that group service agreement who is not eligible for an alternative group health benefit plan or otherwise eligible for continued group coverage.

(b) Short-term conversion coverage shall: (1) consist of coverage which is identical to the coverage that the corporation had provided under the prior group service agreement; and (2) extend at the option of the insured for up to, but no longer than, six months after the date the corporation ceases to provide the coverage under the group medical service agreement.

(c) The corporation may require payment of a premium for any period of short-term conversion coverage, except that such premium shall not exceed one hundred and ten percent of the premium that the corporation would have charged such person for similar coverage under the prior group medical service agreement.   At the election of the payor, premium payments may be made in monthly installments.

(d) Within fourteen days of the date on which the corporation ceases to provide the group medical service agreement, or, in the event that a group service agreement is terminated retroactively because the group failed to pay premiums, within sixty days of the retroactive  termination date, the corporation shall provide written notice explaining short-term conversion coverage to every individual who was covered under the group medical service agreement; provided, however, the corporation shall not provide such notice when all individuals who were covered under the ceased service agreement have access to an alternative group health benefit plan.  Individuals shall have thirty days from the date of the corporation’s written notice to elect to participate in short-term conversion coverage, which coverage shall begin on the date that the group medical service agreement ceased to provide coverage.

(e) Short-term conversion coverage may not be conditioned upon, or discriminate on the basis of lack of, evidence of insurability.

(f) Short-term conversion coverage issued in accordance with this section shall not be subject to chapter one hundred and seventy-six M.  Nothing in this section shall prohibit a medical service corporation that is required to offer short-term conversion coverage from concurrently offering a conversion nongroup health plan as that term is defined in chapter one hundred and seventy-six M

(g) Short-term conversion coverage issued under this section shall be considered a health plan and a qualifying health plan pursuant to chapter one hundred and seventy-six N.

SECTION 4.   Chapter one hundred and seventy six G is hereby amended by adding the following new section five B after section five A.

Section 5B.Short-Term Conversion Coverage.

(a) Every group health maintenance contract issued or delivered within or without the commonwealth by a health maintenance organization which covers residents of the commonwealth shall contain a provision that, in the event the health maintenance organization ceases to provide coverage under the contract, the health maintenance organization shall offer short-term conversion coverage to any individual covered under that contract who is not eligible for an alternative group health benefit plan or otherwise eligible for continued group coverage.

(b) Short-term conversion coverage shall: (1) consist of coverage which is identical to the coverage that the health maintenance organization had provided under the prior contract; and (2) extend at the option of the insured for up to, but no longer than, six months after the date the health maintenance organization ceases to provide the coverage under the group contract.

(c) The health maintenance organization may require payment of a premium for any period of short-term conversion coverage, except that such premium shall not exceed one hundred and ten percent of the premium that the health maintenance organization would have charged such person for similar coverage under the prior group contract.   At the election of the payor, premium payments may be made in monthly installments.

(d) Within fourteen days of the date on which the health maintenance organization ceases to provide the group contract, or, in the event that a contract is terminated retroactively because the group failed to pay premiums, within sixty days of the retroactive contract termination date, the health maintenance organization shall provide written notice explaining short-term conversion coverage to every individual who was covered under the contract; provided, however, the health maintenance organization shall not provide such notice when all individuals who were covered under the ceased contract have access to an alternative group health benefit plan.  Individuals shall have thirty days from the date of the health maintenance organization’s written notice to elect to participate in short-term conversion coverage, which coverage shall begin on the date that the group contract ceased to provide coverage.

(e) Short-term conversion coverage may not be conditioned upon, or discriminate on the basis of lack of, evidence of insurability.

(f) Short-term conversion coverage issued in accordance with this section shall not be subject to chapter one hundred and seventy-six M.  Nothing in this section shall prohibit a health maintenance organization that is required to offer short-term conversion coverage from concurrently offering a conversion nongroup health plan as that term is defined in chapter one hundred and seventy-six M

(g) Short-term conversion coverage issued under this section shall be considered a health plan and a qualifying health plan pursuant to chapter one hundred and seventy-six N.

SECTION 5.   Chapter one hundred and seventy six I is hereby amended by adding the following new section twelve after section eleven.

Section 12.Short-Term Conversion Coverage.

(a) Every insured group health benefit plan that includes a preferred provider arrangement issued or delivered within or without the commonwealth by an organization pursuant to chapter one hundred and seventy-six I which covers residents of the commonwealth shall contain a provision that, in the event the organization ceases to provide coverage under the health benefit plan, the organization shall offer short-term conversion coverage to any individual covered under that plan who is not eligible for an alternative group health benefit plan or otherwise eligible for continued group coverage.

(b) Short-term conversion coverage shall: (1) consist of coverage which is identical to the coverage that the organization had provided under the prior group plan; and (2) extend at the option of the insured for up to, but no longer than, six months after the date the organization ceases to provide the coverage under the group health benefit plan.

(c) The organization may require payment of a premium for any period of short-term conversion coverage, except that such premium shall not exceed one hundred and ten percent of the premium that the organization would have charged such person for similar coverage under the prior health benefit plan.   At the election of the payor, premium payments may be made in monthly installments.

(d) Within fourteen days of the date on which the organization ceases to provide the group health benefit plan, or, in the event that a plan is terminated retroactively because the group failed to pay premiums, within sixty days of the retroactive plan termination date, the organization shall provide written notice explaining short-term conversion coverage to every individual who was covered under the group plan; provided, however, the organization shall not provide such notice when all individuals who were covered under the ceased policy have access to an alternative group health benefit plan.  Individuals shall have thirty days from the date of the organization’s written notice to elect to participate in short-term conversion coverage, which coverage shall begin on the date that the group health benefit plan ceased to provide coverage.

(e) Short-term conversion coverage may not be conditioned upon, or discriminate on the basis of lack of, evidence of insurability.

(f) Short-term conversion coverage issued in accordance with this section shall not be subject to chapter one hundred and seventy-six M.  Nothing in this section shall prohibit an organization that is required to offer short-term conversion coverage from concurrently offering a conversion nongroup health plan as that term is defined in chapter one hundred and seventy-six M

(g) Short-term conversion coverage issued under this section shall be considered a health plan and a qualifying health plan pursuant to chapter one hundred and seventy-six N.

SECTION 6.   Section 1 of Chapter 176K is hereby amended to add the following definition:

"Retirement association plan", any successor policy or contract providing healthcare benefits to a group of retired employees of an employer which previously maintained a healthcare policy or contract exempt from the provisions of this chapter pursuant to section 8, which policy or contract has terminated or is no longer providing healthcare benefits to retired employees.”

SECTION 7.   Section 8 of Chapter 176K is hereby amended to add the following after the first full sentence of the Section: “This chapter shall not apply to a retirement association plan, except that no retirement association plan may contain any waiting period or pre-existing condition limitation or exclusion."