THE NONPROFIT HEALTH CARE CORPORATION REFORM ACT (EXCERPT)
Act 350 of 1980
550.1410a Provisions of group certificate; electing coverage under group conversion certificate; notice of conversion privilege; requirements of group conversion certificate; premium; issuance; compliance.
(1) A group certificate that is issued or renewed in this state after December 31, 1990 shall include provisions consistent with this section.
(2) If an individual subscriber has been continuously covered under a group certificate for at least 3 months immediately prior to termination, the individual subscriber and his or her covered spouse and dependents may elect coverage under a group conversion certificate upon termination. As used in this section, termination includes, but is not limited to, the following:
(a) Discontinuance of a group certificate in its entirety or with respect to a covered class.
(b) Loss of coverage due to voluntary or involuntary termination of employment except for termination of employment because of gross misconduct.
(c) For a surviving spouse or dependent, death of an individual subscriber covered under a group certificate.
(d) An event that causes a person, who is a spouse or dependent of an individual subscriber at the time of the event, to cease to be a qualified family member under a group certificate.
(3) Coverage under a group conversion certificate shall take effect immediately upon the termination of coverage under the group certificate.
(4) Notification of the conversion privilege shall be included in each certificate of coverage.
(5) A master certificate holder shall give written notice to an individual subscriber of the option to elect a group conversion certificate within 14 days after the occurrence of subsection (2)(a) or (b).
(6) An individual subscriber shall notify the health care corporation of his or her election to convert to a group conversion certificate not later than 30 days after termination of coverage. The first premium shall be paid to the health care corporation at the time the individual elects to convert to a group conversion certificate.
(7) A group conversion certificate under this section:
(a) Shall be issued without evidence of insurability.
(b) Shall not use conditions pertaining to health as a basis for classification.
(c) Shall not exclude a preexisting condition that is not excluded by the group certificate solely because it is a preexisting condition.
(d) May provide that benefits may be reduced by the amount of benefits paid for a specific covered service pursuant to the group certificate that has been terminated.
(8) The premium for a group conversion certificate under this section shall be determined using the aggregate experience for all such certificates issued in this state by the health care corporation and in accordance with premium rates applicable to the age, class of risk, and the type and amount of coverage provided. The experience of an individual under a group conversion certificate shall not be an acceptable basis for establishing that individual's rate for his or her group conversion certificate.
(9) A health care corporation is not required to issue a group conversion certificate under this section if any of the following circumstances apply:
(a) The individual is covered for similar benefits and to a similar extent by another expense-incurred hospital, medical, surgical, or sick-care insurance policy or certificate, hospital or medical service subscriber contract, medical practice or other prepayment plan, or other expense-incurred plan or program.
(b) The individual is covered under title XVIII of the social security act, chapter 531, 49 Stat. 620, 42 U.S.C. 1395 to 1395b, 1395b-2, 1395c to 1395i, 1395i-1a to 1395i-3, 1395j to 1395dd, 1395ff to 1395mm, and 1395oo to 1395ccc.
(c) If termination of an individual's coverage under a group certificate occurred because of any of the following:
(i) The individual failed to pay any required contribution.
(ii) Discontinued group coverage was replaced by group coverage.
(iii) The individual acted to defraud the health care corporation.
(10) A group conversion certificate under this section delivered outside this state for a group certificate that was issued and delivered in this state shall comply with this section.
History: Add. 1989, Act 260, Imd. Eff. Dec. 26, 1989
Popular Name: Blue Cross-Blue Shield
Popular Name: Act 350
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