Section 1 modifies state law requirements for continuation of health benefits to survivors of a deceased insured, allowing survivors to be terminated upon enrollment in Medicare, or after 36 months.  The survivors may be required to pay an additional two percent of the premium cost on a monthly basis for the continuation coverage.

Section 2 allows termination of group health insurance for a covered employee who becomes totally disabled while employed upon the earliest of the following:

(1) 29 months;

(2) enrollment in other group coverage or Medicare; or

(3) the date the coverage would otherwise end.

An employer may require the disabled employee to pay up to 102 percent of the premium for the first 18 months of coverage and up to 150 percent of the premium for months 19 through 29.  At any time after the first 18 months of continuation coverage, the disabled employee may enroll in specified conversion coverage, or enroll in MCHA with a waiver of the pre-existing condition limitation.

Section 3 adds a GAP policy (as defined in subdivision 7) as an option for a terminated employee to continue health coverage.  Every eligible employee must have the right to obtain from the group health carrier a direct GAP policy without first enrolling in and completing continuation coverage.  Options for deductibles and out-of-pocket costs under the GAP policy are specified.  GAP coverage must be available on a guaranteed issue basis. 

Section 4 provides that continuation coverage of a spouse and other dependents of an insured who becomes eligible for Medicare may expire at the time the spouse or dependent children become covered under Medicare. 

Section 5 further limits continuation privileges under a health insurance policy for a former spouse and dependent children after a divorce to 36 months of coverage. 

CBS:cs