(A) As used in this section:

1. (1) "Group contract" means a group health insuring corporation contract covering employees that meets either of the following conditions:

   1. (a) The contract was issued by an entity that, on June 4, 1997, holds a certificate of authority or license to operate under Chapter 1738. or 1742. of the Revised Code, and covers an employee at the time the employee's employment is terminated.
   2. (b) The contract is delivered, issued for delivery, or renewed in this state after June 4, 1997, and covers an employee at the time the employee's employment is terminated.

2. (2) "Eligible employee" means an employee to whom all of the following apply:

   1. (a) The employee has been continuously covered under a group contract or under the contract and any prior similar group coverage replaced by the contract, during the entire three-month period preceding the termination of the employee's employment.
   2. (b) The employee did not voluntarily terminate the employee's employment and the termination of employment is not a result of any gross misconduct on the part of the employee.
   3. (c) The employee is not, and does not become, covered by or eligible for coverage by medicare.
   4. (d) The employee is not, and does not become, covered by or eligible for coverage by any other insured or uninsured arrangement that provides hospital, surgical, or medical coverage for individuals in a group and under which the employee was not covered immediately prior to the termination of employment. A person eligible for continuation of coverage under this section, who is also eligible for coverage under section 3923.123 of the Revised Code, may elect either coverage, but not both. A person who elects continuation of coverage may elect any coverage available under section 3923.123 of the Revised Code upon the termination of the continuation of coverage.

(C) All of the following apply to the continuation of group coverage required under division (B) of this section:

1. (1) Continuation need not include any supplemental health care services benefits or specialty health care services benefits provided by the group contract.
2. (2) The employer shall notify the employee of the right of continuation at the time the employer notifies the employee of the termination of employment. The notice shall inform the employee of the amount of contribution required by the employer under division (C)(4) of this section.

3. (3) The employee shall file a written election of continuation with the employer and pay the employer the first contribution required under division (C)(4) of this section. The request and payment must be received by the employer no later than the earlier of any of the following dates:

   1. (a) Thirty-one days after the date on which the employee's coverage would otherwise terminate;
   2. (b) Ten days after the date on which the employee's coverage would otherwise terminate, if the employer has notified the employee of the right of continuation prior to this date;
   3. (c) Ten days after the employer notifies the employee of the right of continuation, if the notice is given after the date on which the employee's coverage would otherwise terminate.
4. (4) The employee must pay to the employer, on a monthly basis, in advance, the amount of contribution required by the employer. The amount required shall not exceed the group rate for the insurance being continued under the policy on the due date of each payment.

5. (5) The employee's privilege to continue coverage and the coverage under any continuation ceases if any of the following occurs:

   1. (a) The employee ceases to be an eligible employee under division (A)(2)(c) or (d) of this section;
   2. (b) A period of twelve months expires after the date that the employee's coverage under the group contract would otherwise have terminated because of the termination of employment;
   3. (c) The employee fails to make a timely payment of a required contribution, in which event the coverage shall cease at the end of the coverage for which contributions were made;

   4. (d) The group contract is terminated, or the employer terminates participation under the contract, unless the employer replaces the coverage by similar coverage under another contract or other group health arrangement. If the employer replaces the contract with similar group health coverage, all of the following apply:

      1. (i) The member shall be covered under the replacement coverage, for the balance of the period that the member would have remained covered under the terminated coverage if it had not been terminated.
      2. (ii) The minimum level of benefits under the replacement coverage shall be the applicable level of benefits of the contract replaced reduced by any benefits payable under the contract replaced.
      3. (iii) The contract replaced shall continue to provide benefits to the extent of its accrued liabilities and extensions of benefits as if the replacement had not occurred.