Section 17. (a) In any city or town which accepts the provisions of this section, an employee, in addition to the right of a deferred retiree status, or, conversion of insurance coverages to a non-group policy as provided in this chapter, and upon his involuntary termination of employment due to lack of funds, lack of work, or abolition of the position, may elect to continue all or a part of his insurance coverages including membership in a health maintenance organization, until such employee and dependents have become eligible and insured under another group plan of health insurance but in no event shall such extension of coverages exceed a period of thirty-nine weeks computed from the date of termination of employment or the date to which insurance premiums have been regularly paid, whichever is the later.

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(b) Upon determination by the employer of the termination of employment as described in this section, the employer shall notify in writing the employee of the right to elect to continue coverages under this section and a copy of such notification shall be sent to the treasurer or department charged with the responsibility to administer the group insurance plans for payroll deduction, and direct payment purposes, at least fifteen working days if possible, prior to the date of termination of employment.

(c) The involuntarily terminated insured employee and on behalf of his dependents shall, upon election to continue insurance coverages under this section, give at least a thirty day written notice thereof to the employer. Such employee shall be responsible for making payment to the treasurer of the governmental unit of the total monthly premiums or rates, with no contribution by the governmental unit. The treasurer of the governmental unit, or his authorized designee, shall send a written notice by regular mail of the monthly premiums when due to the last known address of the terminated employee, who, upon making timely monthly payments to the treasurer shall be required to certify under the penalty of perjury that the employee is not eligible or insured under another group policy or plan. Failure on the part of the treasurer to transmit the terminated employee’s premiums to the governmental unit’s insurance carriers in a timely manner shall nevertheless render the insurance carrier and the governmental unit liable under its policy or contracts for payment of claims to the same extent as if the treasurer had transmitted the employee’s premiums in a timely manner to the insurance carriers or plans. Section twenty-seven C of chapter twenty-nine shall not apply to this paragraph.

(d) Upon expiration of the period of the extension as provided in this section the governmental unit shall provide to the terminated employee and dependents conversion rights to non-group coverages to the extent that such rights had not been exercised heretofore during the latest period of employment.

(e) If it is determined by the appropriate public authority to be in the best interests of the governmental unit and its formerly insured employees whose employment has been terminated as described in this section that the extension of the insurance coverages would be less costly to the local governmental unit by transferring the eligibility for similar coverages, as provided by the commonwealth for its employees, to the commission for the centralization and maintenance during this temporary extension period and without loss of other rights to the terminated employee, application in writing may be made to the commission for approval. The appropriate public authority shall be notified within five working days of the commission’s decision.