Insurance Code section 10116
(a)
If the policyholder is not a trustee or the trustees of a fund established or maintained in whole or in part by the employer, the policy shall provide that the employee’s individual contribution shall be the rate in the policy, on the date cessation of work occurs, applicable to an individual in the class to which the employee belongs as set forth in the policy. If the policy does not provide for a rate applicable to individuals, the policy shall provide that the employee’s individual contribution shall be an amount equal to the amount determined by dividing (1) the total monthly premium in effect under the policy at the date of cessation of work by (2) the total number of persons insured under the policy at such date.(b)
If the policyholder is a trustee or the trustees of a fund established or maintained in whole or in part by the employer, the employee’s contribution shall be the amount which he and his employer would have been required to contribute to the trust for such employee if (1) the cessation of work had not occurred and (2) the agreement requiring the employer to make contributions to the trust were in full force.(c)
The policy may provide that the continuation of insurance is contingent upon the collection of individual contributions by the union or unions representing the employees for policies referred to in subdivision (a) above, and by the policyholder or the policyholder’s agent with respect to policies referred to in subdivision (b) above.(d)
The policy may provide that the continuation of insurance on each employee is contingent upon timely payment of contributions by the individual and timely payment of the premium by the entity responsible for collecting the individual contributions.(e)
The policy may provide that each individual premium rate shall be increased by any amount up to twenty percent (20%), or any higher percent which may be approved by the commissioner, of that otherwise shown in the policy during the period of cessation of work in order to provide sufficient compensation to the insurer to cover increased administrative costs and increased mortality and morbidity. If the policy does provide for such an increase, this shall have the effect of increasing the employee’s contribution by a like percent.(f)
Nothing in this section shall be deemed to limit any right which the insurer may have in accordance with the terms of the policy to increase or decrease the premium rates before, during or after such cessation of work if, in fact, the insurer would have had the right to increase the premium rate had the cessation of work not occurred. If such a premium rate change is made, it shall be effective, notwithstanding any other provisions of this section, on such date as the insurer shall determine in accordance with the terms of the policy.(g)
The policy may contain such other provisions with respect to such continuation of insurance as the commissioner may approve.(h)
The policy may provide that, if a premium is unpaid at the date of cessation of work and such premium became due prior to such cessation of work, the continuation of insurance is contingent upon payment of such premium prior to the date the next premium becomes due under the terms of the policy.
Source:
Section 10116, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=INS§ionNum=10116. (accessed Apr. 24, 2025).