Under California law on discontinuance and replacement of group disability insurance (CIC Sections 10128.1 through 10128.4), when a group disability policy is discontinued, eligible covered members must be offered:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The California Insurance Code's article on discontinuance and replacement of group disability insurance requires that, upon discontinuance of a group policy, eligible covered members be offered a conversion right or replacement coverage so that continuity of protection is preserved. The statute defines discontinuance as termination of the policy or of an entire employer unit's coverage, and it creates ongoing duties for the carrier with respect to totally disabled employees through extension of benefits. These protections appear in the A&H objectives and are anchored to AH-III.B.4 as part of the statutory framework affecting group health coverage in California.
Why the other options are wrong
- B) The law provides conversion or replacement coverage, not a refund of all premiums ever collected from the group.
- C) Medicare enrollment is a separate federal program and is unrelated to discontinuance of a private group disability policy.
- D) Covered members do retain statutory rights to conversion or replacement, so the coverage does not simply end with no rights.
Memory hook
Group policy ends? Members get a conversion or replacement lifeline.