State Codes and Statutes

Statutes > Connecticut > Title38a > Chap700c > Sec38a-537

      Sec. 38a-537. (Formerly Sec. 38-262c). Notice of cancellation or discontinuation to covered employees. Fine. Notice of transfer of coverage. Failure to procure coverage. Retroactive coverage. (a) Any individual, partnership, corporation, or unincorporated association providing group health insurance coverage for its employees shall furnish each insured employee, upon cancellation or discontinuation of such health insurance, notice of the cancellation or discontinuation of such insurance. The notice shall be mailed or delivered to the insured employee not less than fifteen days next preceding the effective date of cancellation or discontinuation. Any individual or any such entity that fails to provide timely notice shall be fined not more than two thousand dollars for each violation. The Labor Commissioner shall have the authority to assess all such fines. This section shall apply to any such individual, partnership, corporation or unincorporated association that substitutes one policy providing group health insurance coverage for another such policy with no interruption in coverage.

      (b) If any individual or any such entity fails to furnish notice pursuant to subsection (a) of this section, the individual or entity shall be liable for benefits to the same extent as the insurer, hospital or medical service corporation or health care center would have been liable if coverage had not been cancelled or discontinued.

      (c) Any individual, partnership, corporation, or unincorporated association which makes deductions from an employee's wages for group health insurance coverage and fails to procure such coverage shall be liable for benefits to the same extent as the insurer, hospital or medical service corporation or health care center would have been liable if coverage had been procured. If any corporation makes deductions from an employee's wages for group health insurance coverage and fails to procure such coverage, any officer of the corporation responsible for procuring such coverage for employees who wilfully failed to procure such coverage shall be personally liable for benefits to the same extent as the insurer, hospital or medical service corporation or health care center would have been liable if coverage had been procured, provided that personal liability shall only be imposed against the officer in the event that an amount owed an employee due to the officer's failure cannot otherwise be collected from the corporation itself.

      (d) Whenever an employer ceases doing business, any terminated employee whose group health insurance was discontinued on or before the date of termination of employment and who did not receive notice of such discontinuation pursuant to subsection (a) of this section shall be eligible for ninety days from the date of discontinuation to purchase as a conversion privilege an individual comprehensive health care plan for himself and any dependents covered by the discontinued group health insurance plan from the former insurer, hospital or medical service corporation, health care center or the Health Reinsurance Association, if any insurer is not issuing such coverage, with coverage retroactive to the date of discontinuation. The employee shall pay the premiums for the period of retroactive coverage. No retroactive coverage may be purchased for a period during which the employee is eligible for benefits under another group plan.

      (P.A. 75-402; P.A. 82-159, S. 1; P.A. 85-269; P.A. 89-69; P.A. 90-243, S. 118; P.A. 08-178, S. 17.)

      History: P.A. 82-159 provided that notice of "discontinuation" of insurance be given and that, in the event timely notice is not provided, the employer shall be fined in Subsec. (a) and added Subsecs. (b) and (c) providing that the employer who fails to furnish notice shall be liable for benefits to the same extent as the insurer and that retroactive coverage may be purchased by eligible employees; P.A. 85-269 amended Subsec. (a) to grant to the labor commissioner the authority to assess fines under the subsection; P.A. 89-69 added Subsec. (c) concerning the liability of an individual, partnership, corporation or unincorporated association for making deductions for certain insurance coverage and failing to procure the coverage and an officer's personal liability in such cases; P.A. 90-243 substituted "health" for "life, hospital or medical" insurance, "the" for "such" and added a reference for "health care center"; Sec. 38-262c transferred to Sec. 38a-537 in 1991; P.A. 08-178 amended Subsec. (a) by making technical changes and increasing maximum fine from $1,000 to $2,000 per violation.