Sec. 1. 24-A MRSA §2809-A, sub-§11, as amended by PL 1991, c. 885, Pt. E, §30 and affected by §47, is repealed.

Sec. 2. 24-A MRSA §2809-A, sub-§11-A is enacted to read:

11-A.__Continued group coverage; groups with fewer than 20 employees.__Notwithstanding any other provision of this section, if the termination of a member's or employee's coverage under a group policy with 20 or fewer members is a result of the reduction of hours or termination of the covered employee's employment, other than termination for gross misconduct, the insurer shall allow the member or employee to elect, within the time period prescribed by paragraph C, to continue coverage under the group policy at the same level of benefits or coverage offered to employees whose employment has not been terminated or reduced and at the member's or employee's expense or, at the member's or employee's option, to convert to a policy of individual coverage without evidence of insurability in accordance with this section.__If the level of benefits or coverage offered to employees whose employment has not been terminated or reduced is modified, the level of benefits or coverage offered to a member or employee pursuant to this subsection must be modified in the same manner.

A.__For the purposes of this subsection, "member or employee" means a person who has been a member or employee for at least 6 months.

B.__The employer's decision to terminate an employee for gross misconduct is conclusive as to the employee's ineligibility for continued coverage under this subsection.

C.__Within 14 days of a member's or employee's termination of employment or reduction of hours of employment, other than for gross misconduct, the employer shall give the insurer written notice on a form provided by the insurer of a member's or employee's eligibility for an election to continue coverage under this subsection.

D.__Within 14 days of the receipt of written notice from the employer pursuant to paragraph C, the insurer shall send the member or employee an election and premium notice form approved by the superintendent.__The form must provide the member or employee an opportunity to elect or decline to elect continued coverage under the group policy and notify the member or employee of the applicable premium amount due after the election to continue coverage.__The notice must be