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:
Employers Managed Health Care Trust Fund DMC Insurance Administrators, Inc. P.O. Box 757 Pleasanton, CA 94566
How is COBRA Continuation Coverage Provided?
Once the Plan Administrative Office receives notice that a qualifying event has occurred, COBRA continuation coverage will be offered to each of the qualified beneficiaries. Each qualified beneficiary will have an independent right to elect COBRA continuation coverage. Covered employees may elect COBRA continuation coverage on behalf of their spouses, and parents may elect COBRA continuation coverage on behalf of their children. COBRA continuation coverage is a temporary continuation of healthcare coverage. When the qualifying event is the death of the employee, your divorce or legal separation, or a dependent child’s losing eligibility as a dependent child, COBRA continuation coverage lasts for up to a total of 36 months. When the employee becomes entitled to Medicare benefits less than 18 months before the qualifying event, COBRA continuation coverage for qualified beneficiaries other than the employee, lasts until 36 months after the date of Medicare entitlement. For example, if a covered employee becomes entitled to Medicare eight (8) months before the date on which his employment terminates, COBRA continuation coverage for his spouse and children can last up to 36 months after the date of Medicare entitlement, which is equal to 28 months after the date of the qualifying event (36 months minus 8 months). Otherwise, when the qualifying event is the end of employment or reduction of the employee’s hours of employment, COBRA continuation coverage generally lasts for only up to a total of 18 months. There are two ways in which this 18-month period of COBRA continuation coverage can be extended. Please see the below section(s) for more details regarding the exceptions.
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).
Questions concerning your Plan or your COBRA continuation coverage rights should be directed to the Plan Administrative Office. For more information about your rights, including COBRA, the Health Insurance Portability and Accountability Act (HIPAA), and other laws affecting group health plans, contact the nearest Regional or District Office of the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) in your area or visit the EBSA website at www.dol.gov/ebsa. (Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA’s website.)