The right to COBRA continuation coverage was created by a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA continuation coverage can become available to you when you would otherwise lose your group health coverage. It can also become available to other members of your family who are covered under the Plan when they would otherwise lose their group health coverage.
For additional information about your rights and obligations under the Plan and under federal law, you should contact the Plan Administrative Office at (800) 924-1226.
What is COBRA Continuation Coverage?
COBRA continuation coverage is a continuation of Plan coverage when coverage would otherwise end because of a life event known as a “qualifying event.” After a qualifying event, COBRA continuation coverage must be offered to each person who is a “qualified beneficiary.” You, your spouse and your dependent children could become qualified beneficiaries if coverage under the Plan is lost because of the qualifying event. Under the Plan, qualified beneficiaries who elect COBRA continuation coverage must pay for COBRA continuation coverage. If you are an employee, you will become a qualified beneficiary if you lose your coverage under the Plan because either one of the following qualifying events occurs:
- Your hours of employment are reduced, or
- Your employment ends for any reason.
If you are the spouse of an employee, you will become a qualified beneficiary if you lose your coverage under the Plan because any of the following qualifying events occurs:
- Your spouse dies,
- Your spouse’s hours of employment are reduced,
- Your spouse’s employment ends for any reason, or
- You become divorced or legally separated from your spouse.
Your dependent children will become qualified beneficiaries if they lose coverage under the Plan because any of the following qualifying events occurs:
- The parent (employee) dies,
- The parent’s (employee’s) hours of employment are reduced,
- The parent’s (employee’s) employment ends for any reason,
- The parents become divorced or legally separated, or
- The child stops being eligible for coverage under the Plan as a “dependent child.”
When is COBRA Continuation Coverage Available?
The Plan will offer COBRA continuation coverage to qualified beneficiaries only after the Plan Administrative Office has been notified that a qualifying event has occurred. When the qualifying event is the end of employment, reduction of hours of employment or death of the employee, the employer must notify the Plan Administrative Office of the qualifying event. YOU MUST GIVE NOTICE OF SOME QUALIFYING EVENTS For the other qualifying events (divorce or legal separation of the employee and spouse or a dependent child’s losing eligibility for coverage as a dependent child), you must notify the Plan Administrative Office within 60 days after your loss of coverage due to the qualifying event. You must provide this notice to:
How is COBRA Continuation Coverage Provided?
Disability Extension of 18-Month Period of COBRA Continuation Coverage If you or anyone in your family covered under the Plan is determined by the Social Security Administration to be disabled and you notify the Plan Administrative Office in a timely fashion, you and your entire family may be entitled to receive up to an additional 11 months of COBRA continuation coverage, for a total maximum of 29 months. The disability would have to have started at some point before the 60th day of COBRA continuation coverage and must last at least until the end of the 18-month period of continuation coverage. To get this extension you must send a copy of the Social Security Award within 60 days from the latest of:
(1) the date of the Social Security Disability Award,
(2) the date that the qualified beneficiary loses coverage, or
(3) the date on which the qualified beneficiary is informed of the obligation to provide the disability award, but in no event later than the expiration of the first 18 months of COBRA continuation coverage.
Second Qualifying Event Extension of 18-Month Period of Continuation Coverage
If your family experiences another qualifying event while receiving 18 months of COBRA continuation coverage, the spouse and dependent children in your family can get up to 18 additional months of COBRA continuation coverage, for a maximum of 36 months, if notice of the second qualifying event is properly given to the Plan. This extension may be available to the spouse and any dependent children receiving continuation coverage if the employee or former employee dies, becomes entitled to Medicare benefits (under Part A, Part B or both), or gets divorced or legally separated, or if the dependent child stops being eligible under the Plan as a dependent child, but only if the event would have caused the spouse or dependent child to lose coverage under the Plan had the first qualifying event not occurred.
Termination Before End of Maximum Period COBRA continuation coverage will be terminated before the end of the maximum period if:
- Any required premium is not paid in full and on time,
- A qualified beneficiary becomes covered, after electing continuation coverage, under another group health plan that does not impose any pre-existing condition exclusions for a pre-existing condition of the qualified beneficiary, or
- A qualified beneficiary becomes entitled to Medicare benefits (under Part A, Part B or both) after electing continuation coverage.
COBRA continuation coverage may also be terminated for any reason the Plan would terminate coverage of a participant or beneficiary not receiving continuation coverage (such as fraud).
Extension of COBRA Deadlines During Coronavirus Outbreak Period
On May 4, 2020, the Internal Revenue Service and Department of Labor adopted an emergency regulation that extends certain COBRA deadlines during the coronavirus “Outbreak Period.” The Outbreak Period runs from March 1, 2020 until sixty (60) days following the announced end of the National Emergency (or another date determined by the federal government in a future notice). Any deadlines for electing COBRA coverage or for making your first payment for COBRA are suspended until 60 days after the end of the COVID-19 national emergency.
The extension of the above deadlines does not extend the maximum period of COBRA coverage to which you are entitled.
If you elect COBRA, claims for covered expenses will be paid retroactive to the first date of your COBRA coverage, for every month for which you have paid the full premium due.
1) Terry loses coverage on December 31, 2019 due to a reduction of hours and received a COBRA election notice on January 15, 2020. Terry did not elect COBRA coverage by March 15, 2020, which was the deadline under the normal COBRA election rules. The 15-day portion of his COBRA election window that falls within the Outbreak Period (March 1-March 15) is disregarded. Terry’s COBRA election period will now end fifteen (15) days after the end of the Outbreak Period.
2) John loses coverage due to a reduction of hours and received a COBRA election notice on April 1, 2020. John’s COBRA election period will end sixty (60) days after the end of the Outbreak Period. Until John elects COBRA coverage, the health plan will inform providers that John does not currently have coverage but will have coverage retroactively if he elects COBRA coverage during his election period and timely pays his COBRA premium covering the month of service (see 3(a), below).
3) Susan was receiving COBRA coverage on April 1, 2020. More than 45 days had passed since Susan had elected COBRA. Susan made a timely March COBRA premium payment but has not made any payments since then. As of August 1, 2020, Susan has made no premium payments for April, May, June or July. For purposes of this example, assume that the Outbreak Period ends on July 30, 2020. Susan’s premium payments for four months (April through July) are due by August 29, 2020.
a) The health plan will pay for benefits and services retroactively only if Susan pays the COBRA premium by August 29, 2020. Until Susan pays the retroactive COBRA premium(s), the health plan will inform providers that Susan does not currently have coverage but will have coverage retroactively if she pays her COBRA premiums covering the month of service.
b) If Susan only submits payment equivalent to two months’ premiums by August 29, 2020, benefits and services provided on or before May 31, 2020 would be covered but the plan would not be obligated to pay for benefits or services that occurred after May 2020.
Please call the Plan Administrative Office at (800) 924-1226 if you have any questions or need another copy of your COBRA election forms.