Section Ins 3.75 - Continuation of discontinued employer provided health group policy coverage for employees and their dependents(1) PURPOSE. The purpose of this section is to allow assistance eligible individuals to elect continued coverage provided under s. 632.897, Stats., in circumstances where the group policy is discontinued on or after June 30, 2009, and not replaced. The rule applies only to individuals who are eligible for a premium subsidy under the federal American Recovery and Reinvestment Act of 2009 P.L. 111-5, as amended. The federal act makes the premium subsidy available to those individuals who are eligible due to an involuntary employment termination prior to June 1, 2010.(2) DEFINITIONS. In addition to the definitions in section 9126 of 2009 Wisconsin Act 11, in this section, unless the context requires otherwise:(a) "Assistance eligible individual" has the meaning provided in section 3001 (a) (3) of the federal act.(b) "Federal act" means the American Recovery and Reinvestment Act of 2009, P.L. 111-5, as amended by section 1010 of the federal department of defense appropriations act, 2010 (P.L. 111-118), the temporary extension act of 2010 (P.L. 111-144) and the continuing extension act of 2010 (P.L. 111-157).(c) "Terminated insured" means a n insured under s. 632.897(1) (f) and (2) (b) 2, Stats., whose employment has been involuntarily terminated on or after September 1, 2008, and prior to June 1, 2010, who has been continuously covered under a group policy for at least 3 months and who satisfies one of the following: 1. Would be entitled to elect continued coverage under s. 632.897, Stats., but for the fact that the group policy was discontinued on or after June 30, 2009, and not replaced by another group policy offered by the employer during the terminated insured's 30-day election period under s. 632.897(3) (a), Stats.2. Is receiving, on behalf of themselves and, if applicable, a spouse or dependents, continued coverage under s. 632.897, Stats., due to an involuntary termination of employment that occurred on or after September 1, 2008, but prior to June 1, 2010, and, on or after June 30, 2009, the group policy is discontinued and not replaced by a group policy offered by the employer.(3) ADDITIONAL CONTINUATION COVERAGE ELECTION OPPORTUNITY FOR ASSISTANCE ELIGIBLE INDIVIDUALS WHEN AN EMPLOYER DISCONTINUES AND DOES NOT REPLACE GROUP POLICY COVERAGE. (a) Except as provided in pars. (c) and (d), an insurer shall permit a terminated insured to elect continuation of coverage under the terms of an employer's group policy if the group policy is discontinued on or after June 30, 2009.(b) An insurer shall permit a terminated insured to elect continuation of coverage on behalf of themselves and the terminated insured's spouse and dependents if the spouse or dependents were covered under the group policy at the time the group policy was discontinued.(c) An insurer may limit continuation of coverage under this section to individuals who are under the federal act who are assistance eligible individuals.(d) This section does not require continuation of coverage if the individual satisfies all of the following: 1. Establishes residence outside this state.2. Fails to make timely payment of a required premium amount after notice as required under s. 631.36(2) (b), Stats.3. Becomes eligible for similar coverage under another employer's group policy or for benefits under title XVIII of the Social Security Act.4. Ceases to be eligible for premium assistance under section 3001 (a) (2) of the federal act.5. The individual's eligibility for continued coverage would have otherwise ceased under s. 632.897, Stats., if the group policy had not been discontinued.(e) Coverage under this section, if elected under par. (a), shall continue uninterrupted from the date of the employer's discontinuance of the group policy. An insurer is not required to continue coverage for a period covered by a conversion policy issued under s. 632.897, Stats., for the period prior to the date of election of continuation coverage.(f) An insurer shall provide a right to an individual conversion policy on termination of continuation of coverage under this section if the terminated insured tenders the first premium within 30 days after the continued coverage terminates. The insurer shall either include notice of this right and a description of how to make payment of premium in the notice required under sub. (4) (b) or shall provide notice prior to termination of the continuation coverage. The conversion policy shall conform to the requirements of s. 632.897(4), Stats. An insurer is not required to issue a conversion policy under this paragraph if issuance of an individual conversion policy is not required under the standards established in s. 632.897(4) (d), Stats.(4) NOTICE. (a) An employer shall provide written notice in the form required by par. (b) to each terminated insured prior to the date of discontinuance of the group policy. An employer or insurer is not required to give notice to a terminated insured who is not, or who is not entitled to elect coverage for, an assistance eligible individual.(b) The notice required under this subsection shall include a description of the discontinuance of the group policy; the right to continuation under sub. (3) (a) and (b); an explanation of the procedure for electing continued coverage; the payment amounts required for continuation coverage; and the manner, place, and time in which the payments shall be paid. The notice shall also include a description of the premium subsidy, the notice required under section 3001 (a) (7) of the federal act, and a description of when the continuation coverage will discontinue, including a description of discontinuance under sub. (3) (d) 4.(c) If an employer that is required to provide the notice as required under pars. (a) and (b) fails to provide the notice within the time required, the insurer shall provide the notice specified in par. (b) within 10 days after the date the insurer acquires knowledge the employer has not provided the notice or the date the insurer exercising due diligence should know that the employer has not provided the notice.(d) Insurance intermediaries shall provide reasonable assistance to insurers by notifying employers of the requirement to provide notice under this subsection and by making reasonable efforts to assist insurers in determining whether the employer complies and, if not, by making reasonable efforts to assist the insurer in giving notice.(e) A terminated insured may elect continuation of coverage by electing continuation coverage and paying the premium due under sub. (5) (a) to either the employer or the insurer, as directed by the notice required under par. (b), within 30 days after notice is given as required under par. (a) or (c).(5) PREMIUM. (a) The insurer may charge for coverage continued under this section an amount no more than 100% of the cost the employer incurred for providing the group policy coverage, including group rate adjustments on the date the group policy would have renewed that are based on applying rating factors to group changes that occurred prior to the discontinuance of the group policy. The employer or insurer shall collect only 35% of that amount from the terminated insured. The insurer may collect any premium subsidy available under the federal act.(b) An insurer may require payment of premium for all required continuation coverage periods, including for periods prior to the date of election.(c) An employer, if requested by the insurer, shall collect and remit to the insurer premium due under this section. An insurer may require the employer to collect and remit premium due from a terminated insured, spouse, or dependent under this section. An insurer may not condition continuation of coverage on the employer collection and remittance of premium. An insurer shall treat payment by a terminated insured, spouse, or dependent to the employer as receipt and payment to the insurer unless the insurer directs that payment be made to the insurer. An insurer may direct a terminated insured, spouse, or dependent to pay the premium to either the employer or to the insurer, including by direction in the notice under sub. (4) (b).(d) An employer must notify an insurer when the employer discontinues a group policy and does not replace the group policy. An insurer may require the employer to give it notice when it discontinues a group policy and does not replace the group policy. An insurer may not condition continuation of coverage under this section on employer notice of such discontinuance.(6) PORTABILITY. For an individual who elects continuation of coverage under this section, the period, if any, from the date of the termination of the individual's group policy coverage to the commencement of continuation of coverage under this section shall be disregarded for the purpose of determining the 63-day period under s. 632.746(3) (b), Stats.(7) CONTRACT TERMS PRESERVED. An insurer may restrict coverage provided under this section to the terms of the group policy to the extent the terms do not conflict with this section. Nothing in this section prohibits an insurer from applying deductibles and other cost sharing according to the terms of the group policy, including according to policy periods based on renewal dates that would have occurred had the policy not been discontinued. An insurer may apply policy modifications that were included in notice given to the employer under s. 631.36, Stats., or requested by the employer, that took effect or would have taken effect prior to or on the date of the discontinuance of the policy. An insurer may include provisions for administration of this section in its group policy and certificates.(8) EXTENDED PREMIUM PAYMENT RIGHT, COVERAGE, AND NOTICE PURSUANT TO SECTION 1010 OF THE FEDERAL DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2010. An insurer must provide the rights provided by, and must comply with the provisions of, section 1010 (c) of the federal department of defense appropriation act, 2010 (P.L. 111-118), for assistance eligible individuals who are or were eligible for coverage under this section or s. 632.897, Stats., including: (a) The rules relating to 2009 extension, including the right to elect to pay premiums retroactively and maintain coverage under this section or s. 632.897, Stats.(b) The rules relating to notification as provided under section 1010 (c) of the federal department of defense appropriation act, 2010 (P.L. 111-118), as amended.Wis. Admin. Code Office of the Commissioner of Insurance Ins 3.75
EmR0925: emerg. cr., eff. 10-2-09; EmR0945: emerg. am. (2) (c), cr. (8), eff. 1-7-10; CR 09-096 and CR 10-038: cr. Register December 2010 No. 660, eff. 1-1-11; correction in (7) made under s. 13.92(4) (b) 7, Stats., Register December 2010 No. 660.Amended by, CR 17-015: am. (6) Register December 2017 No. 744, eff. 1/1/2018