Industry Frequently Asked Questions

Group Accident and Health Insurance

What type of notice does an employer have to give to employees who are leaving employment concerning State continuation rights for group accident and health insurance?

Answer: Very often we receive calls from employers who are subject to state, rather than federal continuation requirements concerning what they must do when employees leave employment. Part of the answer is to be found in the Labor Law (Sections 195 and 217) but part is also to be found in Sections 3221 and 4305 of the Insurance Law.

Section 195 provides that departing employees must receive notice from their employers of various items available to them including the right to continue group accident and health insurance coverage under the group plan. The law requires that the notice be provided within 5 working days of termination of employment. There is no precise format for the notice. The notice must identify the exact date of cancellation of employee benefits.

For purposes of continuation, there are three elements that a notice should contain: the employee has the right to elect to continue on the group plan; the employee has 60 days from the later of receipt of the notice or termination of employment to decide; and, if the employee chooses to continue, he/she must notify the employer in writing and enclose the appropriate premium amount (this amount is the monthly cost of the insurance to which the employer may add 2% for administrative expenses). Future premiums will be due monthly in advance for up to the length of times indicated in the statute. For details about this item the employer may consult their group insurance policy.