AN ACT Relating to group insurance for unemployed persons; amending RCW 48.21.250, 48.44.360, and 48.46.440; adding a new section to chapter 48.21 RCW; adding a new section to chapter 48.44 RCW; and adding a new section to chapter 48.46 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 48.21 RCW to read as follows:

(1) Any group disability insurance policy issued, renewed, or amended on or after October 1, 1986, that provides coverage for hospital or medical expenses shall contain a provision granting the person covered by the policy the right to continue coverage under the group policy for one hundred eighty days from the date the person's eligibility for coverage under the policy is terminated.

(2) Continuation of coverage under this section need not be offered to:

(a) A person who was not covered under the group policy for at least three continuous months before termination of employment or membership; or

(b) A person whose employment or membership was terminated for misconduct.

(3) Upon termination of a person's eligibility for coverage, the insurer shall provide written notice to the person of the continuation rights under this section. If the person applies for unemployment insurance benefits in connection with termination of employment, the employment security department shall provide written notice to the person of the continuation rights. A person who wishes to continue coverage under this section must request continuation in writing not later than ten days after the later of the date on which eligibility for coverage ended and the date on which the person was first notified in writing of the right to continue coverage. However, a person may not make a request for continuation of coverage more than thirty-one days after the date of termination of group coverage.

(4) A person who requests continuation of coverage may be required to pay the contribution required by the employer or group policyholder, on a monthly basis and in advance, as provided in this subsection. The person shall pay the contribution to the insurer, employer, or policyholder, whichever the group policy provides. The required contribution may not exceed the group premium rate for the insurance being continued under the group policy as of the date the contribution is due. The person must pay the first contribution not later than thirty-one days after the date on which the person's coverage under the group policy would otherwise end.

(5) Continuation of coverage shall end before the one hundred eighty-day period if:

(a) The person fails to make timely payment of a required contribution; or

(b) The group policy is terminated or the employer or other group terminates participation under the policy. However, if the employer or other group replaces the group coverage with similar coverage under another group policy a person may continue coverage as provided in subsection (6) of this section.

(6) A person may obtain coverage under the replacement group policy for the balance of the period that remained under the replaced group policy. The replacement policy shall not duplicate benefits still payable under the replaced policy. The replaced policy shall continue to provide benefits to a person to the extent of that policy's accrued liabilities and extension of benefits as if the replacement had not occurred.

Sec. 2. Section 2, chapter 190, Laws of 1984 and RCW 48.21.250 are each amended to read as follows:

Every insurer that issues policies providing group coverage for hospital or medical expense shall offer the policyholder an option to include a policy provision granting a person who becomes ineligible for coverage under the group policy and whose right to continuation of coverage under section 1 of this act has expired, the right to continue the group benefits for a period of time and at a rate agreed upon. The policy provision shall provide that when such coverage terminates, the covered person may convert to a policy as provided in RCW 48.21.260.

NEW SECTION. Sec. 3. A new section is added to chapter 48.44 RCW to read as follows:

(1) Any group health care service contract issued, renewed, or amended on or after October 1, 1986 that provides coverage for hospital or medical expenses shall contain a provision granting the person covered by the contract the right to continue coverage under the group contract for one hundred eighty days from the date the person's eligibility for coverage under the contract is terminated.

(2) Continuation of coverage under this section need not be offered to:

(a) A person who was not covered under the group contract for at least three continuous months before termination of employment or membership; or

(b) A person whose employment or membership was terminated for misconduct.

(3) Upon termination of a person's eligibility for coverage, the health care service contractor shall provide written notice to the person of the continuation rights under this section. If the person applies for unemployment insurance benefits in connection with termination of employment, the employment security department shall provide written notice to the person of the continuation rights. A person who wishes to continue coverage under this section must request continuation in writing not later than ten days after the later of the date on which employment or membership ended and the date on which the person was first notified in writing of the right to continue coverage. However, a person may not make a request for continuation of coverage more than thirty-one days after the date of termination of group coverage.

(4) A person who requests continuation of coverage may be required to pay the contribution required by the employer or group contract holder, on a monthly basis and in advance, as provided in this subsection. The person shall pay the contribution to the contractor, employer, or contract holder, whichever the group contract provides. The required contribution may not exceed the group premium rate for the coverage being continued under the group contract as of the date the contribution is due. The person must pay the first contribution not later than thirty-one days after the date on which the person's coverage under the group contract would otherwise end.

(5) Continuation of coverage shall end before the one hundred eighty-day period if:

(a) The person fails to make timely payment of a required contribution; or

(b) The group contract is terminated or the employer or other group terminates participation under the contract. However, if the employer or other group replaces the group coverage with similar coverage under another group contract a person may continue coverage as provided in subsection (6) of this section.

(6) A person may obtain coverage under the replacement group contract for the balance of the period that remained under the replaced group contract. The replacement contract shall not duplicate benefits still payable under the replaced contract. The replaced contract shall continue to provide benefits to a person to the extent of that contract's accrued liabilities and extension of benefits as if the replacement had not occurred.

Sec. 4. Section 5, chapter 190, Laws of 1984 and RCW 48.44.360 are each amended to read as follows:

Every health care service contractor that issues group contracts providing group coverage for hospital or medical expense shall offer the contract holder an option to include a contract provision granting a person who becomes ineligible for coverage under the group contract and whose right to continuation of coverage under section 3 of this act has expired, the right to continue the group benefits for a period of time and at a rate agreed upon. The contract provision shall provide that when such coverage terminates, the covered person may convert to a contract as provided in RCW 48.44.370.

NEW SECTION. Sec. 5. A new section is added to chapter 48.46 RCW to read as follows:

(1) Any group health maintenance agreement issued, renewed, or amended on or after October 1, 1986, that provides coverage for hospital or medical expenses shall contain a provision granting the person covered by the agreement the right to continue coverage under the group agreement for one hundred eighty days from the date the person's eligibility for coverage under the agreement is terminated.

(2) Continuation of coverage under this section need not be offered

(a) A person who was not covered under the group agreement for at least three continuous months before termination of employment or membership; or

(b) A person whose employment or membership was terminated for misconduct.

(3) Upon termination of a person's eligibility for coverage, the health maintenance organization shall provide written notice to the person of the continuation rights under this section. If the person applies for unemployment insurance benefits in connection with termination of employment, the employment security department shall provide written notice to the person of the continuation rights. A person who wishes to continue coverage under this section must request continuation in writing not later than ten days after the later of the date on which employment or membership ended and the date on which the person was first notified in writing of the right to continue coverage. However, a person may not make a request for continuation of coverage more than thirty-one days after the date of termination of group coverage.

(4) A person who requests continuation of coverage may be required to pay the contribution required by the employer or group agreement holder, on a monthly basis and in advance, as provided in this subsection. The person shall pay the contribution to the health maintenance organization, employer, or agreement holder, whichever the group agreement provides. The required contribution may not exceed the group premium rate for the coverage being continued under the group agreement as of the date the contribution is due. The person must pay the first contribution not later than thirty-one days after the date on which the person's coverage under the group agreement would otherwise end.

(5) Continuation of coverage shall end before the one hundred eighty-day period if:

(a) The person fails to make timely payment of a required contribution; or

(b) The group agreement is terminated or the employer or other group terminates participation under the agreement. However, if the employer or other group replaces the group coverage with similar coverage under another group agreement a person may continue coverage as provided in subsection (6) of this section.

(6) A person may obtain coverage under the replacement group agreement for the balance of the period that remained under the replaced group agreement. The replacement agreement shall not duplicate benefits still payable under the replaced agreement. The replaced agreement shall continue to provide benefits to a person to the extent of that agreement's accrued liabilities and extension of benefits as if the replacement had not occurred.

Sec. 6. Section 8, chapter 190, Laws of 1984 and RCW 48.46.440 are each amended to read as follows:

Every health maintenance organization that issues agreements providing group coverage for hospital or medical care shall offer the agreement holder an option to include an agreement provision granting a person who becomes ineligible for coverage under the group agreement and whose right to continuation of coverage under section 5 of this act has expired, the right to continue the group benefits for a period of time and at a rate agreed upon. The agreement provision shall provide that when such coverage terminates the covered person may convert to an agreement as provided in RCW 48.46.450.

NEW SECTION. Sec. 7. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.