An Act To Promote Health Insurance Coverage for Employees of Small Businesses
Maine Legislature, Session 122, LD 0111
Committee: Insurance and Financial Services
Sponsors: CURLEY, BARTLETT, DUDLEY, GLYNN, NASS
Amends: 24-A MRSA §4222-B

Legislative Document 
No.ll1 
H.P.87 
House of Representatives, January 11,2005 
An Act To Promote Health Insurance Coverage for Employees of 
Small Businesses 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative CURLEY of Scarborough. 
Cosponsored by Senator BARTLETT of Cumberland and 
'7J1~ 1I7.1llP£~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: DUDLEY of Portland, GLYNN of South Portland, MARRACH.:E: of 
Waterville, NASS of Acton. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24·A MRSA §2809.A. sub·§l1. as amended by PL 1991, c. 
885, Pt. E, §30 and affecte~ by §47, is repealed. 
Sec. 2. 24·A MRSA §2809·A. sub·§l1·A is enacted to read: 
II-A. 
Continued group coverage; groups with felfer than 20 
employees. 
Notwithstanding any other provision of this section, 
if the termination of a member's or employee's coverage under a 
group 
policy with 
or 
fewer 
members 
is 
a 
result of 
the 
reduction of 
hours 
or 
termination of 
the 
covered employee's 
employment, 
other 
than 
termination for 
gross 
misconduct, 
th~ 
insurer shall allow the member or employee to elect, wi thin the 
time period prescribed by paragraph C, to continue coverage under 
the group policy at the 
same 
level of benefits or 
coverage 
offered to employees whose employment has not been terminated or 
reduced and at the member's or employee's expense or, at the 
member's 
or 
employee's 
option, 
to 
convert 
to 
a 
policy 
of 
individual 
coverage 
without 
evidence 
of 
insurability 
III 
accordance 
with this 
section. 
If 
the 
level 
of 
benefits 
or 
coverage offered to 
employees 
whose 
employment 
has 
not 
been 
terminated or 
reduced is modified, 
the 
level of benefits 
coverage 
offered 
to 
a 
member 
or 
employee 
pursuant 
to 
this 
subsection must be modified in the same manner. 
A. 
For 
the 
purposes 
of 
this 
subsection, 
"member 
or 
employee" means a person who has been a member or emplQ,Yf:e 
for at least 6 months. 
B. 
The employer's decision to terminate an employee for 
gross 
misconduct 
is 
conclusive 
as 
to 
the 
employee's 
ineligibility for continued coverage under this subsection. 
C. 
Within 14 days of a member's or employee's termination 
of employment or reduction of hours of employment, 
other 
than 
for 
gross misconduct, 
the 
employer 
shall give 
the 
insurer written notice on a form provided by the insurer of 
a 
member's 
or employee's eligibility for 
an election to 
continue coverage under this subsection. 
D. 
Within 14 days of the receipt of written notice from the 
employer pursuant to paragraph C, the insurer shall send the 
member 
or 
employee 
an election and 
premium notice 
form 
approved by the superintendent. 
The form must provide the 
member or employee an opportunity to elect or decline to 
elect continued coverage under the group policy and notify 
the member or employee of the applicable premium amount due 
after the election to continue coverage. 
The notice must be 
2U 
3R 
sent by first class mail to the last known mailing address 
of the member or employee. 
E. 
The member or employee has 31 days from the receipt of 
the election and premium notice form from the insurer under 
paragraph D in which to elect continued coverage in writing 
to the insurer and make the initial premium payment to the 
insurer. 
After the election, the insurer shall bill the 
member or employee for premiums once each month with a due 
date on the first of the month of coverage subject to any 
grace period for payment pursuant to this Title. 
F. 
An insurer is not required to continue coverage under a 
group or individual policy if the member or employee meets 
the conditions set out in subsection 3, paragraph A. 
G. 
The 
payment for 
continued group coverage 
under this 
subsection may not exceed 102°0 of the group rate in effect 
for a group member in the employer's group policy, including 
all employer's contribution, if any. 
H. 
At the option of the member or employee, the continueq 
group coverage may cover the member or employee, the membe~ 
or employee and any dependents or only the dependents of the 
member or employee; however, if the continued group coverage 
is for a dependent of the member or employee, the dependent 
must have been covered for 
a period of at least 3 months 
under 
the 
group 
policy, 
unless 
the 
dependent 
was 
not 
eligible 
for 
coverage until after 
the 
beginning of 
the 
)-month period. 
I. 
Except 
under this 
as provided in paragraph J, 
coverage provideq 
subsection continues for a maximum of 18 months 
from the date of termination of the prior coverage. 
J. 
Coverage 
provided 
under 
this 
subsection 
may 
be 
terminated sooner than provided under paragraph I if: 
_W 
The 
member 
or 
employee 
fails 
to 
make 
timely 
payment of a required premium amount: 
(2) 
The 
member 
or 
employee 
becomes 
eligible 
for 
coverage under another group policy or becomes entitleq 
to benefits under Title XVIII of the Social Security 
Act; or 
(3) 
The group health policy is terminated. 
K. 
At 
the 
expiration 
of 
any 
continued 
group 
coverage 
obtained under this subsection, the member or employee has 
the same conversion privileges as otherwise granted under 
this section. 
L. 
This subsection may not be construed to: 
M. 
(1) 
Prevent members or employees from negotiating for 
or 
receiving 
greater 
continued 
coverage 
of 
group 
insurance than is provided in this subsection; 
(2) 
Require 
coverage beyond the 
time limit set in 
paragraph I; or 
(3) 
Permit a member or employee to increase the level 
of benefits or coverage that the 
receives 
immediately 
before 
the 
member or employee 
termination 
of 
the 
member's or employee's coverage under the employer's 
group policy. 
This 
subsection does 
not apply to 
any group policy 
subject to the United States Consolidated Omnibus 
Budget 
Reconciliation Act, 
Public 
Law 
99-272, 
Title 
X, 
Private 
Health Insurance Coverage, Sections 10001 to 10003. 
N. 
The 
superintendent 
may 
adopt 
rules 
as 
necessary 
to 
implement 
the 
requirements 
of 
this 
subsection. 
Rules 
adopted pursuant to this subsection are routine technica.!, 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. 3. 24-A MRSA §4222-B. sub-§18. as enacted by PL 2001, c. 
410, Pt. B, §3, is amended to read: 
18. 
The 
f'eE!1;.if'emel'l.t 
requirements 
of 
section 
2809-A, 
subsection 
11-A 
to 
continue 
group 
coverage 
under 
certain 
circumstances aFF±ies ~ 
to health maintenance organizations. 
SUMMARY 
This bill gives an employee whose coverage under a group 
policy is terminated the right to maintain coverage under that 
group policy at the employee's expense for 18 months or convert 
to an individual policy without evidence of insurability. 
The 
bill applies to group policies covering fewer than 20 employees. 
The bill clarifies that the continuation or conversion privilege 
is not available if the employee's employment is terminated for 
gross misconduct.