Iowa Code 509B.3 – Continuation of benefits
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A group policy delivered or issued for delivery in this state which insures employees or members for accident or health insurance on an expense-incurred or service basis, other than for specific diseases or for accidental injuries only, shall provide that employees or members whose coverage under the group policy would otherwise terminate because of termination of employment or membership may continue their accident or health insurance under that group policy, for themselves and their eligible dependents, subject to all of the group policy’s terms and conditions applicable to those forms of insurance and subject to all of the following conditions:
1. Continuation shall only be available to an employee or member if the employee or member was continuously insured under the group policy, and for similar benefits under any group policy which it replaced, during the entire three months’ period immediately preceding the termination.
Terms Used In Iowa Code 509B.3
- Accident or health insurance: means hospital, surgical, or major medical insurance, or a combination of these. See Iowa Code 509B.1
- Dependent: A person dependent for support upon another.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Group policy: means a group accident or health insurance policy issued by an insurance company under chapter 509, a group accident or health contract issued by a health service corporation under chapter 514, or a plan for health care services provided by a health maintenance organization under chapter 514B, or issued or provided by any similar corporation or organization. See Iowa Code 509B.1
- insured: refer to coverage under a group policy, individual policy, or converted policy on a premium-paying basis, and do not include coverage provided solely as an accrued liability or by reason of a disability extension. See Iowa Code 509B.1
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Medicare: means Tit. See Iowa Code 509B.1
- person: means individual, corporation, limited liability company, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity. See Iowa Code 4.1
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
- termination of employment or membership: includes but is not limited to termination because of permanent or temporary layoff or approved leave of absence. See Iowa Code 509B.2
2. Continuation shall not be available for a person who is or could be covered by Medicare. Continuation shall not be available for a person who is or is eligible to be covered by another group insured or uninsured arrangement which provides accident or health coverage, unless the person was covered by that other group policy immediately prior to the termination.
3. Continuation may exclude dental care, vision care, or prescription drug benefits or other benefits provided under the group policy which benefits are in addition to accident or health benefits.
4. a. An employee or member who wishes continuation of coverage must request continuation in writing to the employer or group policyholder within the ten-day period following the later of either of the following:
(1) The date of the termination.
(2) The date the employee is given notice of the right of continuation as provided in section 509B.5 by either the employer or the group policyholder.
b. If proper notice is given, the employee or member is not eligible to elect continuation more than thirty-one days after the date of termination.
5. An employee or member electing continuation shall pay monthly to the employer or group policyholder, in advance, the amount of contribution required by the employer or group policyholder, but not more than the group rate otherwise due for the insurance being continued under the group policy. If proper notice is given, the election of continuation by the employee or member together with the first contribution required to establish contributions on a monthly basis in advance, shall be given to the employer or group policyholder within thirty-one days of the date the group insurance would otherwise terminate.
6. Continuation of insurance under the group policy for any person shall terminate when the person becomes eligible for Medicare or another group insured or uninsured accident or health arrangement, or earlier, when any of the following first occurs:
a. Nine months after the date the employee’s or member’s insurance under the policy would otherwise have terminated because of termination of employment or membership.
b. At the end of the period for which contributions were made if the employee or member fails to make timely payment of a required contribution and if proper notice is given as provided in section 509B.5, subsection 2.
c. If the person covered is a former spouse, upon the former spouse’s remarriage.
d. The date on which the group policy is terminated or, in the case of an employee, the date the employer terminates participation under the group policy. However, if this paragraph applies and the coverage which would cease because of the employer’s termination is replaced by similar coverage under a different group policy, all of the following apply:
(1) The employee, member, spouse, or eligible dependent may become covered under the different group policy, for the balance of the period that the employee or member would have remained covered under the prior group policy had a termination of the group policy as specified in paragraph “d” not occurred.
(2) The minimum level of benefits to be provided by the different group policy shall be the applicable level of benefits of the prior group policy, reduced by any benefits payable under the prior group policy.
(3) The prior group policy shall continue to provide benefits to the extent of its accrued liabilities and extensions of benefits as if the prior group policy had not been replaced by the different group policy.
7. A notification of the continuation privilege shall be included with or in each certificate of coverage and as otherwise provided in section 509B.5 and shall contain the time limits for requesting the continued coverage.
8. The spouse of an employee or member, and any covered dependent children of the employee or member, whose coverage under the group policy would otherwise terminate because of dissolution or annulment of marriage or death of the employee or member shall have the same contribution and notice responsibilities and privileges as provided under this chapter to the employee or member upon termination of employment or membership.