SENATE, No. 2052

 

STATE OF NEW JERSEY

 

INTRODUCED MAY 8, 1997

 

 

By Senator BASSANO

 

 

An Act concerning certain group life insurance and amending N.J.S.17B:27-2.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. N.J.S. 17B:27-2 is amended to read as follows:

    17B:27-2. A policy issued to an employer, or to the trustees of a fund established by an employer, which employer or trustees shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements:

    a. The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof determined by conditions pertaining to their employment or by a combination of such conditions and conditions pertaining to the family status of the employees. The policy may provide that the term "employees" shall include the employees of one or more subsidiary corporations and the employees, individual proprietors and partners of one or more affiliated corporations, proprietors or partnerships if the business of the employer and such affiliated corporations, proprietors or partnerships is under common control through stock ownership, contract or otherwise. The policy may provide that the term "employees" shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term "employees" shall include retired employees. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he is actively engaged in and devotes a substantial part of his time to the conduct of the business of the proprietor or partnership. The policy may provide that the term "employees" shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship.

    b. The premium for the policy shall be paid by the policyholder, either wholly from the employer's funds or funds contributed by him, or partly from such funds and partly from funds contributed by the insured employees. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured employees. A policy on which part of the premium is to be derived from funds contributed by the insured employees may be placed in force only if at least 75% of the then eligible employees, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured employees [must] shall insure all eligible employees [or all] , except [any as to] for those employees for whom evidence of individual insurability is not satisfactory to the insurer and those employees who notify the employer, in writing by certified mail with return receipt requested, that they do not want to be covered under the policy or want coverage of themselves under the policy discontinued. In those cases in which employees notify an employer that they want coverage of themselves under the policy discontinued, the employer shall immediately discontinue coverage and send a letter to those employees confirming the discontinuation.

    c. The policy [must] shall cover at least 10 employees at date of issue.

    d. The amounts of insurance under the policy [must] shall be based upon some plan precluding individual selection either by the employees or by the employer or trustees.

(cf: N.J.S.17B:27-2)

 

    2. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill allows employees and former employees, who are covered by, or are proposed to be covered by, a group life insurance policy provided by their employer, to refuse that coverage if they so notify the employer in writing by certified mail with return receipt requested.

 

 

                             

Allows employees and former employees to opt out of certain life insurance group coverage.