Federal & State Regulations | Employee benefits - Kentucky

Summary of differences between federal and state regulations

Employee benefits are generally covered under the federal jurisdiction of the Employee Retirement Income Security Act (ERISA).

Federal ERISA plans generally do not have to comply with state laws. ERISA rules preempt or block state laws that relate to ERISA plans. State insurance laws, however, do apply. Kentucky has laws governing group life insurance.

A summary of the provisions for life insurance include the following:

Grace period of 31 days. (§304.16-120)
Employer cannot be the beneficiary.
The policy must cover at least 10 employees.
Retirees may be included.

The premium must be paid by the policyholder, either wholly from the employer's funds or funds contributed by him, or partly from such funds and partly from funds contributed by the insured employees. Insurers may exclude or limit the coverage on any person for whom evidence of individual insurability is not satisfactory to the insurer. Policies where no part of the premium is from funds contributed by the insured employees must insure all eligible employees, except those who reject the coverage in writing. (§304.16-030)

If the insurance ceases because participants are no longer eligible due to termination of employment, those participants are entitled to have issued an individual policy without evidence of insurability. (§304.16-190)

If the group policy terminates, those covered at the date of termination, including dependents, who have covered for at least five years prior to the termination date are entitled to have individual policies issued. (§304.16-200)