Minnesota Life Insurance License Practice Exam

Under Minnesota law, if an employee is laid off and no longer eligible for group coverage, what must the employer do about the employee's life insurance?

1. Inform the employee of coverage expiration

2. Provide details on continuing coverage for 18 months

3. Cancel the policy immediately

4. Transfer the policy ownership to the employee

The correct answer is: Provide details on continuing coverage for 18 months

The correct answer is that the employer must provide details on continuing coverage for 18 months. Under Minnesota law, as well as federal regulations like COBRA (Consolidated Omnibus Budget Reconciliation Act), when an employee is laid off and loses eligibility for group health benefits, they have the right to continue their coverage for a limited time, typically up to 18 months. The employer is required to inform the employee about their rights regarding this continuation of coverage, including any necessary steps to enroll and any potential costs involved. This continuation coverage allows the employee to maintain their life insurance benefits, ensuring there is no immediate lapse in coverage during their transition, which could be critical during times of financial uncertainty. It’s an essential protection for employees, as it gives them time to explore other insurance options while continuing to protect their beneficiaries. The other options, while they may seem relevant, do not reflect the requirements outlined in the law. For example, simply informing the employee of the coverage expiration does not provide them with the option to continue their coverage. Canceling the policy immediately would deny the employee critical ongoing protection. Likewise, transferring policy ownership to the employee is not typically a requirement or practice in this context, as it may not be permitted depending on the terms of