(a) A survivor-spouse of an annuitant under the State Employees' Retirement System who had elected to convert medical, major medical and hospitalization insurance coverage shall have the option to continue such insurance coverage. The State Employees' Retirement System shall notify prospectively the appropriate State agency administering that annuitant's group health insurance program. A previously covered survivor-spouse of an annuitant who died before October 14, 1991, must notify the State Employees' Retirement System of potential eligibility. The survivor-spouse must submit satisfactory documentation supporting the claim of eligibility to the appropriate State agency administering that annuitant's group health insurance program. The State agency or fund administering that annuitant's group health insurance program must send an election form to the eligible survivor-spouse within thirty (30) days of notification that the annuitant died. The State Employees' Retirement System, upon receipt of the election by the survivor-spouse of the annuitant to continue such insurance coverage, shall notify the insurance carrier of the election and deduct the appropriate charges in equal monthly installments. Such deductions shall be transmitted to the designated fiscal officer of the Commonwealth having jurisdiction over the payment of such group charges on behalf of the annuitant or the survivor-spouse. This section shall apply to all survivor-spouses of annuitants regardless of when they attain such status. An eligible survivor-spouse who does not return the election form to the State Employees' Retirement System or the appropriate State agency administering the annuitant's group health insurance program within thirty (30) days shall have a coverage effective date of the first day of the month subsequent to the receipt of the election form.

(b) In the event that the monthly annuity of the survivor-spouse of the annuitant is less than the amount needed or such person receives no survivor annuity to cover the applicable monthly installment payments, the Commonwealth's fiscal officer shall identify the total difference between these amounts and shall notify the survivor-spouse of the annuitant of the deficiency. Within thirty (30) days of this notification, the survivor-spouse of the annuitant shall make a payment to the Commonwealth's fiscal officer in an amount sufficient to cover the deficiency for the period mandated by the State agency administering the annuitant's group health insurance program, which period shall not exceed three (3) months. If payment is not received by the Commonwealth's fiscal officer within the specified time period, the eligibility for State insurance coverage for the survivor-spouse of the annuitant shall be forfeited. Upon forfeiture, the Commonwealth's fiscal officer shall notify both the insurance carrier and the State Employees' Retirement Board.

(c) If the survivor-spouse of the annuitant elects to continue insurance coverage and makes the installment payment or deficiency payment, or both, insurance coverage will continue in force with the Commonwealth's fiscal officer determining rate adjustments annually and any required deficiency amount. The Commonwealth's fiscal officer shall notify the survivor-spouse of the annuitant of the amount required to assure continued coverage. This notification shall take place at least thirty (30) days prior to the date of the proposed rate change.