6.1 Pennsylvania Group Life Insurance Requirements
Key Takeaways
- Pennsylvania requires minimum group sizes for employer-sponsored group life insurance
- Group life must be offered on a non-discriminatory basis to all eligible employees
- The conversion period for group life insurance is 31 days from termination
- Certificates of insurance must be provided to all covered group members
- Pennsylvania regulates both contributory and non-contributory group plans
Pennsylvania has specific regulations for group life insurance policies to ensure fair treatment of employees and proper plan administration.
Eligible Groups
Pennsylvania allows group life insurance for:
| Group Type | Requirements |
|---|---|
| Employer Groups | Minimum number of employees |
| Labor Unions | Members of bona fide unions |
| Associations | Groups formed for purposes other than insurance |
| Creditor Groups | Debtors of a creditor |
| Multiple Employer Trusts | Approved by Insurance Department |
Employer Group Requirements
Eligibility and Participation
| Requirement | Description |
|---|---|
| Non-Discrimination | Must cover all eligible employees |
| Eligibility Classes | Defined by conditions of employment |
| Waiting Period | Reasonable periods allowed |
| Evidence of Insurability | Limited requirements for eligible employees |
Coverage Structure
Group life coverage may be determined by:
- Salary or compensation (multiples of salary)
- Job classification or position
- Length of service
- Flat amount by category
Exam Tip: Coverage formulas must be applied consistently and cannot discriminate unfairly among eligible employees.
Certificate of Insurance
Certificate Requirements
Every covered employee must receive:
| Element | Description |
|---|---|
| Coverage Summary | Amount and type of coverage |
| Beneficiary Info | How to designate and change |
| Contribution | Employee premium share (if any) |
| Claims | How to file a claim |
| Conversion Rights | Explanation of conversion privilege |
Conversion Rights
Pennsylvania requires conversion privileges for group life insurance:
Conversion Period
| Element | Requirement |
|---|---|
| Timeframe | 31 days from termination |
| Notification | Employer must inform employee |
| Evidence | No evidence of insurability required |
| Coverage Type | Individual permanent life policy |
When Conversion Applies
Employees have conversion rights when:
- Employment terminates (any reason)
- No longer eligible for group coverage
- Policy terminates for their class
- Dependent coverage ends
Conversion Limitations
| Limitation | Description |
|---|---|
| Policy Type | Usually whole life only |
| Premium Basis | Attained age rates |
| Maximum Amount | Up to group coverage (may have limits) |
| Health Questions | None required |
Continuation of Coverage
Situations Requiring Continuation
| Situation | Continuation Required |
|---|---|
| FMLA Leave | Yes, under federal law |
| Military Leave | USERRA protections apply |
| Disability | Per policy provisions |
| Layoff | Per policy provisions |
Premium Arrangements
Contributory Plans
| Feature | Description |
|---|---|
| Employee Pays | Portion of premium |
| Participation | Usually 75% minimum required |
| Payroll Deduction | Standard method |
Non-Contributory Plans
| Feature | Description |
|---|---|
| Employer Pays | 100% of premium |
| Participation | 100% of eligibles covered |
| No Evidence | No insurability questions |
How long does a Pennsylvania employee have to exercise conversion rights for group life insurance?
What document must Pennsylvania employers provide to employees covered by group life insurance?
In a non-contributory group life plan in Pennsylvania, what percentage of eligible employees must be covered?
When a Pennsylvania employee converts group life insurance, they typically receive:
Group life coverage formulas in Pennsylvania must be: