Continuation Coverage

Minnesota law requires every group life insurance plan to let employees who are voluntarily or involuntarily terminated or laid off elect to continue the coverage for themselves and their dependents, as long as the policy remains in force for any active employee of the employer.218 An employee is considered laid off when a reduction in hours leaves the employee no longer eligible for coverage under the policy.219 Termination does not include discharge for gross misconduct.220

A terminated or laid-off employee is eligible to continue the coverage until the employee obtains coverage under another group policy, or for 18 months after the termination or layoff, whichever is shorter.221

When you terminate or lay off a covered employee, you have a duty to inform the employee within 14 days of:

  • the employee’s right to continue the life insurance coverage;
  • the amount the employee must pay you each month to retain the coverage;
  • the manner in which and the office to which the employee must send the payment; and
  • the time by which the employee must make payments to retain coverage.

You must give the notice in writing and send it by first class mail to the employee’s last known address that the employee provided to you.222 The employee then has 60 days within which to elect coverage.223

Conversion to Individual Policy

A group life insurance plan that is required to provide this continuation coverage must also allow a covered employee, a surviving spouse, or a dependent to obtain from the insurer an individual policy providing the same or substantially similar benefits when the continuation coverage ends. The employee, spouse, or dependent obtains the conversion policy at his or her own option and expense, does not have to provide further evidence of insurability, and coverage must not be interrupted.224

CREDITS: This is an excerpt from An Employer’s Guide to Employment Issues in Minnesota, provided by the Minnesota Department of Employment and Economic Development & Linquist & Vennum P.L.L.P., Tenth Edition, 2009. Copies are available without charge from the Minnesota Department of Employment and Economic Development, Small Business Assistance Office.

This post is also part of a series of posts covering the Continuation of Group Health and Life Insurance Coverage Law. This information is not legal advice. You should consult with an experienced employment attorney before dealing with group insurance continuation-of-coverage issues.

218 Minn. Stat. § 61A.092, subd. 1 (2024) (available at https://www.revisor.mn.gov/statutes/cite/61A.092).
219 Minn. Stat. § 61A.092, subd. 1 (2024) (available at https://www.revisor.mn.gov/statutes/cite/61A.092).
220 Minn. Stat. § 61A.092, subd. 1 (2024) (available at https://www.revisor.mn.gov/statutes/cite/61A.092).
221 Minn. Stat. § 61A.092, subd. 2 (2024) (available at https://www.revisor.mn.gov/statutes/cite/61A.092).
222 Minn. Stat. § 61A.092, subd. 3 (2024) (available at https://www.revisor.mn.gov/statutes/cite/61A.092).
223 Minn. Stat. § 61A.092, subd. 3 (2024) (available at https://www.revisor.mn.gov/statutes/cite/61A.092).
224 Minn. Stat. § 61A.092, subd. 5 (2024) (available at https://www.revisor.mn.gov/statutes/cite/61A.092).