Bill Text: NJ S956 | 2010-2011 | Regular Session | Amended

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Bill Title: Provides for the continuation of health insurance coverage for certain employees and their dependents when an employer ceases to exist. *

Sponsorship: Partisan Bill (Democrat 3)

Status: (Engrossed - Dead) 2010-06-10 - Received in the Assembly, Referred to Assembly Financial Institutions and Insurance Committee [S956 Detail]

Download: New_Jersey-2010-S956-Amended.html

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[First Reprint]

SENATE, No. 956

STATE OF NEW JERSEY

214th LEGISLATURE

 

INTRODUCED FEBRUARY 4, 2010

 

 

Sponsored by:

Senator  JOSEPH F. VITALE

District 19 (Middlesex)

Senator  BARBARA BUONO

District 18 (Middlesex)

 

Co-Sponsored by:

Senator Ruiz

 

 

 

 

SYNOPSIS

Provides for the continuation of health insurance coverage for certain employees and their dependents when an employer ceases to exist.

 

CURRENT VERSION OF TEXT

     As reported by the Senate Commerce Committee on May 10, 2010, with amendments.

  

An Act concerning continuation of health benefits coverage for certain ¹[employees] persons¹ and supplementing ¹[P.L.1992, c.161 (C.17B:27A-2 et seq.)] P.L.1992, c.162 (C.17B:27A-17 et seq.)¹ and ¹chapter 27 of¹ Title 17B of the New Jersey Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    a. ¹(1)¹  Notwithstanding the provisions of any law to the contrary, whenever the employment of a covered employee under a small employer health benefits plan is terminated because the ¹[workplace] employer¹ ceases to exist, the benefits of the plan may be continued, as provided in this section, ¹for the covered employee and any spouse or dependent child who is a qualified beneficiary under the plan on the day prior to the employee's termination,¹ for a period of up to 18 months from the ¹employee's¹ termination date ¹[of the covered employee until] .

     (2)  The period of continued coverage for¹ the employee, spouse, or dependent child ¹[who was covered under the small employer health benefits plan becomes eligible for coverage under another group health plan] shall continue until the earlier of the following:

     (a)  The date upon which the 18-month period expires;

     (b)  The date upon which the continued coverage ceases under the small employer health benefits plan by reason of a failure to make timely payment of any premium required under the plan by the employee as required under subsection c. of this section.  The payment of any premium shall be considered to be timely if made within 30 days after the due date or within a longer period as may be provided for by the plan; or

     (c) The date after a date of election, by the employee, spouse, or dependent child, on which that particular individual first becomes:

     (i) covered under any other health benefits plan, as an employee or otherwise, which does not contain a provision which limits or excludes coverage with respect to any preexisting condition of a covered employee or any spouse or dependent child who is included under the coverage provided, for the period of the limitation or exclusion; or

     (ii) entitled to benefits under Title XVIII of the Social Security Act (42 U.S.C. s.1395 et seq.)¹.

     b.    The extended coverage for the period provided in subsection a. of this section shall be available to the terminated employee ¹[who was covered] and any spouse or dependent child who is a qualified beneficiary¹ under the small employer health benefits plan ¹on the day prior to the covered employee's termination because the employer ceases to exist,¹ at the monthly premium rate not to exceed 102% of the premium in effect on the day prior to the ¹[workplace] employer¹ ceasing to exist or as changed on the anniversary date of the small employer health benefits plan.  A carrier may increase rates on the plan anniversary of the discontinued plan using the filed small employer health benefits plan rates for the plan of benefits; however, the increase shall not exceed the lower of 15% or the medical trend assumption used in developing small employer health benefits plan rates.

     c.     An employee who was covered under the small employer health benefits plan that was terminated because the ¹[workplace ceased] employer ceases¹ to exist, shall elect to continue the extended coverage provided in this section no later than 30 days after the employee receives notice from the carrier, as provided in subsection d. of this section, about the availability of extended coverage.  The election shall apply to the covered employee and ¹[qualified dependents] any spouse or dependent child who is a qualified beneficiary under the plan on the day prior to the employee's termination¹.  ¹[For purposes of this section, "qualified dependent" means a spouse or child of a covered employee, subject to applicable terms of the health benefits plan covering the covered employee.]¹  The covered employee shall be responsible for the payment of monthly premiums directly to the carrier ¹[of the small employer health benefits plan that was terminated because of the workplace ceasing to exist.  The eligible employee] and¹ shall not be required to pay more than a monthly premium at one time.

     d.    (1) Whenever a small employer health benefits plan is delivered, issued, renewed, or continued to an employer and that employer ceases to exist on or after ¹[October 1, 2009] 90 days next preceding the effective date of this section¹, the small employer carrier shall make available to a covered employee ¹[,] and any¹ spouse ¹[,]¹ or dependent child ¹[, as provided in this section] who is a qualified beneficiary under the plan on the day prior to the employee's termination¹, the same benefits ¹[of the small employer health benefits] under the¹ plan in effect on the day ¹[immediately preceding] prior to¹ the date the employer ¹[ceased] ceases¹ to exist.

     (2)   Upon receipt of information that an employer ¹[has ceased] ceases¹ to exist, the small employer carrier shall promptly notify all covered employees of that employer, in writing, about the availability of extended coverage pursuant to this section.

     e.     The provisions of this section shall be in effect for the duration of federal premium assistance for continuation coverage, as provided in ¹section 3001(a)(12)(A) of title III of division B of¹ the "American Recovery and Reinvestment Act of 2009," Pub.L.111-5 ¹(26 U.S.C. s.6432)¹.

 

     2.    a.  ¹(1)¹  Notwithstanding the provisions of any law to the contrary, whenever the employment of a covered employee under a group health ¹benefits¹ plan is terminated because the ¹[workplace] employer¹ ceases to exist, the benefits of the plan may be continued, as provided in this section, ¹for the covered employee and any spouse or dependent child who is a qualified beneficiary under the plan on the day prior to the employee's termination,¹ for a period of up to 18 months from the ¹employee's¹ termination date ¹[of the covered employee until] .

     (2)   The period of continued coverage for¹ the employee, spouse, or dependent child ¹[who was covered under the group health plan becomes eligible for coverage under another group health plan] shall continue until the earlier of the following:         

     (a)   The date upon which the 18-month period expires;

     (b)   The date upon which the continued coverage ceases under the group health benefits plan by reason of a failure to make timely payment of any premium required under the plan by the employee as required under subsection c. of this section.  The payment of any premium shall be considered to be timely if made within 30 days after the due date or within a longer period as may be provided for by the plan; or

     (c)   The date after a date of election, by the employee, spouse, or dependent child, on which that particular individual first becomes:

     (i)    covered under any other health benefits plan, as an employee or otherwise, which does not contain a provision which limits or excludes coverage with respect to any preexisting condition of a covered employee or any spouse or dependent child who is included under the coverage provided, for the period of the limitation or exclusion; or

     (ii)   entitled to benefits under Title XVIII of the Social Security Act (42 U.S.C. s.1395 et seq.)¹.

     b.    The extended coverage for the period provided in subsection a. of this section shall be available to the terminated employee ¹[who was covered] and any spouse or dependent child who is a qualified beneficiary¹ under the group health ¹benefits¹ plan ¹on the day prior to the covered employee's termination because the employer ceases to exist,¹ at the monthly premium rate not to exceed 102% of the premium in effect on the day prior to the ¹[workplace] employer¹ ceasing to exist or as changed on the anniversary date of the group health plan.  A health insurer may increase rates on the plan anniversary of the discontinued plan; however, the increase shall not exceed the lower of 15% or the medical trend assumption used in developing group health plan rates for comparable plans issued by the insurer.  A health insurer that increases rates shall promptly notify the Department of Banking and Insurance, in writing, concerning the medical trend assumption that it used in developing the rates.

     c.     An employee who was covered under the group health plan that was terminated because the ¹[workplace ceased] employer ceases¹ to exist shall elect to continue the extended coverage provided in this section no later than 30 days after the employee receives notice from the health insurer, as provided in subsection d. of this section, about the availability of extended coverage.  The election shall apply to the covered employee and ¹[qualified dependents] any spouse or dependent child who is a qualified beneficiary under the plan on the day prior to the employee's termination¹.  ¹[For purposes of this section, "qualified dependent" means a spouse or child of a covered employee, subject to applicable terms of the group health plan covering the covered employee.]¹  The covered employee shall be responsible for the payment of monthly premiums directly to the health insurer ¹[of the group health plan that was terminated because of the workplace ceasing to exist.  The eligible employee] and¹ shall not be required to pay more than a monthly premium at one time.

     d.    (1) Whenever a group health ¹benefits¹ plan is delivered, issued, renewed, or continued to an employer and that employer ceases to exist on or after ¹[October 1, 2009] 90 days next preceding the effective date of this section¹, the health insurer shall make available to a covered employee ¹[,] and any¹ spouse¹[,]¹ or dependent child ¹[, as provided in this section] who is a qualified beneficiary under the plan on the day prior to the employee's termination¹, the same benefits ¹[of the group health] under the¹ plan in effect on the day ¹[immediately preceding] prior to¹ the date the employer ¹[ceased] ceases¹ to exist.

     (2)   Upon receipt of information that an employer ¹[has ceased] ceases¹ to exist, the health insurer shall promptly notify all covered employees of that employer, in writing, about the availability of extended coverage pursuant to this section.

     e.     As used in this section, "health insurer" shall have the same meaning as provided in section 14 of P.L.1997, c.146 (C.17B:27-54).  

     f.     The provisions of this section shall be in effect for the duration of federal premium assistance for continuation coverage, as provided in ¹section 3001(a)(12)(A) of title III of division B of¹ the "American Recovery and Reinvestment Act of 2009," Pub.L.111-5 ¹(26 U.S.C. s.6432)¹.

 

     3.    This act shall take effect immediately.