(a) Employees.

1. (1) An employee shall be eligible for coverage under the plan for himself and for his dependents, if any, subject to the provisions of this Part and of the appropriate contracts applicable to employees and their dependents.
2. (2) Coverage for any employee or any employee's dependents may be effective on the first day of employment. However, a participating employer may require the employee to complete up to six months of service before coverage for the employee and the employee's eligible dependents becomes effective.

3. (3) Coverage for any employee and his dependents shall cease without notice on the date of termination of his status as an employee as defined in section 73.1 of this Part. The status of any person as an employee shall be deemed to terminate upon his severance from the payroll, except that, for the purpose of continuing his coverage under the plan, the status of such person as an employee shall be deemed to continue:

   1. (i) during any period of authorized leave without pay or while a vested employee;
   2. (ii) during any period for which payment of benefits is made under a State income protection plan;
   3. (iii) during any period, not to exceed one year or until reemployment by the State or reemployment by another employer, whichever first occurs, or such shorter period as may be established by collective negotiations, in which the employee is suspended and his name is placed on a preferred list for reinstatement; provided, however, that such continuance shall be permissive for any participating employer;
   4. (iv) in the event of the employee's retirement, if the employee has completed at least five years of service with the employer from whose service the employee has retired if such employee was hired prior to April 1, 1975 and such employer elected to participate in the plan prior to March 1, 1972; provided further that an employer may establish a service requirement greater than five years for purposes of determining eligibility for retirement for any employee hired after April 1, 1975 and may elect not to provide continuance of coverage for any employee hired on or after April 1, 1977. An employer so electing shall agree to do so for all employees or all employees in a class or category who, on retirement, meet the conditions specified;
   5. (v) in the event of the retirement of an employee who has met the conditions specified in subparagraph (iv) of this paragraph from the service of an employer which elected to participate in the plan on or after March 1, 1972, if such employer elects, at its option, to treat such retiree as an employee. An employer so electing shall agree to do so for all employees who, on retirement, meet the conditions specified in subparagraph (iv) of this paragraph;
   6. (vi) in the event of the employee's retirement with less than five years of service with the employer from whose service the employee has retired, or less service than established by such employer, pursuant to subparagraph (iv) of this paragraph, such employer, at its option, may provide for the continuance of coverage for such employee, provided that the applicable period of required service has been met through employment with one or more public employers and such employee has served a minimum of one year with the employer from whose service the employee has retired. An employer so electing to provide continuance of coverage shall agree to do so for all employees or all employees in a class or category who, on retirement, meet the conditions specified;
   7. (vii) in the event the employee is, or has been, granted a service-connected disability retirement by a retirement or pension plan or system administered and operated by the State of New York or a civil division thereof, including the New York State Teachers' Retirement System, regardless of the employee's service with the employer;
   8. (viii) in the event of the retirement of an unpaid local elective official with 20 years or more service in such position with a participating employer that elects to permit enrollment for such officials, or an unpaid local elective official who has at least five or more years service with a participating employer and who also meets or exceeds a locally established service requirement which is not less than that established for other employees of that locality; or
   9. (ix) in the event of the retirement of a publicly elected member of a school board with 20 years' or more service in such position with a participating employer that elects to permit enrollment for such members.
4. (4) Notwithstanding the foregoing provisions, coverage under the plan for any person whose status as an employee terminates may continue for the period for which the required contributions of both the employee and the employer on account of such coverage were made, provided such contributions were payable to the Health Insurance Fund on or prior to the date of the termination of the status of such person as an employee. However, a participating employer may establish that coverage for any category of employees will cease on the last day of the month during which status as an employee terminates. In the event that no contributions are required of an employee for such coverage, coverage under the plan may continue, in the case of an employee paid on a biweekly basis, through the 28th day following the last day of the last payroll period during which the employee was employed and, in the case of an employee paid on a monthly basis, through the last day of the calendar month next following the last month during which the employee was employed, unless an earlier termination date for a particular category of employees has been established.

5. (5) Notwithstanding any of the foregoing provisions of this section, if the regular work schedule of an employee has been not less than 20 hours per week for at least one year and then is reduced to less than 20 hours per week under circumstances not expressly excepted under section 73.1(c)(1) of this Part, the president may, in his discretion and upon the request of the employer, deem such person's status as an employee to continue for a period not exceeding one year for the purpose of continuing his coverage under the plan. Thereafter, if the regular work schedule of such employee continues to be less than 20 hours per week, the president may, from time to time, review the case and, in his discretion, grant extensions not exceeding one year each during which such person's status as an employee may be deemed to continue.

   1. (i) In the event both husband and wife elect coverage under the plan as employees as defined in section 73.1 of this Part, there shall be coordination of benefits.
   2. (ii) No employee may elect coverage under the plan with more than one employer. A person having elected coverage with two or more employers shall terminate coverage with all but one of such employers. If the employee does not do so forthwith, the employee shall be deemed to terminate coverage with all but the employer with whom coverage was first acquired.

   (6)

6. (7) Notwithstanding any other provisions of this Part for the purpose of determining an employee's eligibility to apply accumulated but unused sick leave credits against the employee's cost of health insurance in retirement, an employee whose services are terminated on account of the abolition of positions in the State service and who retires within one year following such termination, shall be deemed to have been on leave without pay and thus eligible to have such credits applied.

   (b) Continued coverage of dependents on death of employee or retired employee.

7. (1) Notwithstanding any other provisions of this Part in the event of the death of an employee or retired employee for whom charges are paid on a biweekly basis, the coverage hereunder of his dependents shall continue, following the payroll period in which death occurs, for the payroll periods for which contributions were made by such employee for coverage of such dependents and, in addition, thereafter, for the five next succeeding payroll periods. If such coverage has been provided by the employer without cost to the employee or retired employee, the coverage of such dependents shall continue for the seven biweekly payroll periods next succeeding the payroll period in which the employee's death occurs. In the event of the death of an employee or retired employee for whom charges are paid on a monthly basis, the coverage hereunder of his dependents shall continue, following the month in which death occurs, for the month or months for which contributions were made by such employee or retired employee for coverage of such dependents and, in addition, thereafter for the two next succeeding months, but in no event shall coverage extended under this paragraph exceed the three-month period next succeeding the month in which the employee's or retired employee's death occurs. If such coverage has been provided by the employer without cost to the employee or retired employee, the coverage of such dependents shall continue for the three-month period next succeeding the month in which the employee's or retired employee's death occurs.
8. (2) Where the circumstances of death of the covered employee are such that an accidental death benefit from a retirement system or pension plan administered by the State or a civil division or a death benefit under the Workers' Compensation Law is payable, dependents shall be eligible for continued coverage, following expiration of the period of coverage provided in paragraph (1) of this subdivision, in accordance with and subject to the provisions of subdivision 2 of section 165 of the Civil Service Law. If an application or claim has been made for an accidental death benefit from a retirement system or pension plan or for death benefits under the Workers' Compensation Law, such dependents shall be eligible for continued coverage under this paragraph pending determination of such application or claim and provided the same is diligently prosecuted by the applicant or claimant. Coverage of dependents may be continued under this paragraph only if written application for such continued coverage is filed with the Department of Civil Service within 90 days after the death of the employee. In the case of dependents of an employee who died before July 1, 1964, such dependents who would otherwise be eligible for coverage under subdivision 2 of section 165 of the Civil Service Law if such section had been in effect at the time of such death shall be eligible for coverage under the plan, provided written application for such coverage is filed with the Department of Civil Service on or before December 31, 1964. Coverage of dependents of a deceased employee under this paragraph may be continued only for so long as such dependents would otherwise be eligible for coverage if the employee had lived and continued to be covered in the health insurance plan, and the surviving spouse for only so long as he or she remains unremarried.

9. (3) Notwithstanding any other provisions of this Part, in the event of the death of an employee or retired employee on or after September 1, 1968, who was an employee of the State and/or of a political subdivision thereof for not less than 10 years and who had been a participant in any of the health insurance plans, the unremarried spouse of such deceased employee or retired employee and/or the other qualified dependents, if any, may elect in writing to continue their present health insurance coverage, provided that the election to continue such coverage and tender of a premium payment equal to one quarter of the full share annual premium is made prior to the cessation of such coverage. If the spouse has remarried at the time of the election to continue coverage or remarries at any time after the election, he or she is ineligible to continue in the plan, but the other dependents, if any, may continue in the plan as provided by this Part.

   (c) Prior retirees.

   Upon the extension of the plan to prior retirees of an employer, each such prior retiree shall be eligible for coverage under the plan for himself and his dependents, if any, subject to the provisions of this Part and of the appropriate contracts applicable to prior retirees and their dependents, provided he makes application for such coverage within the time specified therefor by the president.

   (d) Cessation of eligibility upon termination of the plan or participation of employer.

   Upon the termination of the plan by the State, or of the status of an employer as a participating employer by reason of default in the payment of charges, or by withdrawal or expulsion or otherwise, the coverage and eligibility for coverage of its employees and retired employees shall cease as of the end of the last period for which the required contributions of both employer and employee have been paid to the Health Insurance Fund.

   (e) Disqualification.

   The president may disqualify from participation in the health insurance plan and from receiving benefits thereunder any employee or retired employee or dependent of an employee or retired employee who has secured or attempted to secure participation in the health insurance plan or benefits under the plan for himself or another by fraud, deception or a false statement of a material fact, or who has accepted benefits for himself or another knowing he was not entitled thereto. No person shall be disqualified or denied benefits pursuant to this subdivision unless he is first given a written statement of the reasons therefor and afforded an opportunity to make an explanation and submit facts in opposition to such action. Such employee, retired employee or dependent of an employee or retired employee may be restored to eligibility for coverage under the plan only on approval of the president and subject to such conditions as may be imposed by the president, including repayment of sums expended for benefits obtained by fraud, deception or false statement of a material fact, or accepted by the employee with knowledge that he was not entitled thereto.