House File 414

                                       HOUSE FILE       
                                       BY  THOMAS


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to employer notification to employees of
  2    cancellation of group insurance, and providing recovery for
  3    certain medical bills.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 2845HH 80
  6 jj/cl/14

PAG LIN

  1  1    Section 1.  NEW SECTION.  509C.1  DEFINITIONS.
  1  2    As provided in this chapter, unless the context otherwise
  1  3 requires:
  1  4    1.  "Employer" means as defined in section 91A.2.
  1  5    2.  "Group health insurance" means insurance provided
  1  6 pursuant to chapter 509, 509A, 509B, 513B, 514, or 514B.
  1  7    3.  "Labor commissioner" means the commissioner appointed
  1  8 pursuant to section 91.2.
  1  9    Sec. 2.  NEW SECTION.  509C.2  NOTIFICATION REQUIREMENT ==
  1 10 EMPLOYER LIABILITY.
  1 11    1.  An employer shall notify employees in writing that any
  1 12 applicable group health insurance will be canceled at least
  1 13 thirty days prior to the date of cancellation.
  1 14    a.  The employer's obligation to notify under this
  1 15 subsection applies when the employer intends to cancel the
  1 16 group health insurance, as well as when the employer is aware
  1 17 that the group health insurance will be canceled or will lapse
  1 18 for any other reason, including failure to pay premiums or
  1 19 deductibles.
  1 20    b.  If the employer becomes aware that the group health
  1 21 insurance will be canceled or will lapse less than thirty days
  1 22 prior to the date of cancellation or lapse, then the employer
  1 23 shall notify employees as soon as possible, but in no event
  1 24 later than two days after the employer became aware of the
  1 25 cancellation or lapse.
  1 26    c.  An employer may satisfy the notice provisions of this
  1 27 subsection by posting a prominent notice on an employee
  1 28 bulletin board located in the workplace, in accordance with
  1 29 rules issued by the labor commissioner.
  1 30    2.  An employer shall be liable for employee medical bills
  1 31 incurred during any time period when the group health
  1 32 insurance is canceled or lapsed, and denied for reimbursement
  1 33 by the insurer, and prior to notice being given to employees.
  1 34 The labor commissioner may seek recovery for the medical bills
  1 35 from the employer as if the unreimbursed medical bills were
  2  1 unpaid wages under chapter 91A.
  2  2                           EXPLANATION
  2  3    This bill enacts new Code chapter 509C, requiring
  2  4 notification by employers to employees prior to cancellation
  2  5 of group insurance coverage.  The bill requires a minimum of
  2  6 30 days' notice prior to cancellation, including for
  2  7 cancellation or lapse due to nonpayment of premiums or
  2  8 deductibles.  However, if the employer becomes aware of an
  2  9 impending lapse or cancellation less than 30 days prior to the
  2 10 date of the cancellation or lapse, the employer must give
  2 11 notice to the employees as soon as possible, but in no event
  2 12 later than two days after learning of the impending
  2 13 cancellation or lapse.
  2 14    The notice requirement may be satisfied by means of posting
  2 15 on an employee bulletin board in the workplace, pursuant to
  2 16 rule.
  2 17    If the insurance is canceled or lapses and the employee
  2 18 incurred unreimbursed medical bills prior to receiving
  2 19 notification from the employer, the labor commissioner may
  2 20 seek reimbursement for the medical bills from the employer, as
  2 21 if the bills were unpaid wages under Code chapter 91A.
  2 22    The bill also defines "group insurance", "labor
  2 23 commissioner", and "employer".
  2 24 LSB 2845HH 80
  2 25 jj/cl/14