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 and to other members of your family who are covered under the Plan when you would otherwise lose your group health coverage. The following generally explains COBRA continuation coverage, when it may become available to you and your family, and what you need to do to protect the right to receive it. This notice gives only a summary of your COBRA continuation coverage rights. For more information about your COBRA rights and obligations under the Plan and under Federal law, you should ask the Plan Administrator.
The Participant, his Spouse and other eligible Dependents may continue eligibility for benefits for specified periods set forth below by making self- payments at the rates determined by the Trustees where eligibility would have otherwise terminated as a result of a “Qualifying Event.”
When a Participant or Qualified Beneficiary elects COBRA Continuation Coverage, he must select a Schedule of Benefits. An individual electing COBRA Continuation Coverage will be eligible for the same benefits provided under the Schedule of Benefits that he was covered by on the date coverage otherwise would have terminated as a result of the Qualifying Event. However, individuals electing COBRA may select benefits provided under any lower Schedule of Benefits offered by the Fund. The individual may not change the Schedule of Benefits selected once COBRA Continuation Coverage has begun.
Core and Non-Core Benefits
If an individual is covered under a Schedule of Benefits which provides dental and vision care benefits, he may reject coverage for such and select only medical and prescription drug coverage. An individual must be provided medical coverage (core benefits), including prescription drug coverage, but may reject dental and/or vision benefits (non-core benefits).
Non-Medical Benefits Not Covered
COBRA Continuation Coverage does not provide coverage for non-Medical Benefits. Consequently, Life Insurance Benefit, the Spousal Burial Benefit, Dependent Burial Benefit, the Accidental Death and Dismemberment Benefit, the Short-Term Disability Benefit and certain Wellness Benefits are not provided under COBRA Continuation Coverage.
If, after the Reinstatement of Active Coverage Eligibility, there is another Qualifying Event, the individual may elect COBRA Continuation Coverage and may elect among applicable Schedules of Benefits.
COBRA Continuation Coverage
COBRA continuation coverage is a continuation of group health plan coverage when coverage would otherwise end because of a life event known as a “qualifying event.” Specific qualifying events are listed later. COBRA continuation coverage must be offered to each person who is a “qualified beneficiary.” A qualified beneficiary is someone who will lose coverage under the Plan because of a qualifying event. Depending on the type of qualifying event, employees, spouses of employees, and dependent children of employees may be qualified beneficiaries. Under the group health 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 will lose your coverage under the group health plan because either one of the following qualifying events happens:
- your hours of employment are reduced; or
- your employment ends for any reason other than your gross misconduct.
If you are the spouse of an employee, you will become a qualified beneficiary if you will lose your coverage under the group health plan because any of the following qualifying events happens:
- your spouse dies;
- your spouse’s hours of employment are reduced;
- your spouse’s employment ends for any reason other than his or her gross misconduct;
- your spouse becomes entitled to Medicare (Part A, Part B, or both); or
- you become divorced or legally separated from your spouse.
Your dependent children will become qualified beneficiaries if they will lose coverage under the group health plan because any of the following qualifying events happens:
- the parent-employee dies;
- the parent-employee’s hours of employment are reduced;
- the parent-employee’s employment ends for any reason other than his or her gross misconduct;
- the parent-employee becomes entitled to Medicare (Part A, Part B, or both);
- the parents become divorced or legally separated; or
- the child stops being eligible for coverage under the plan as an Eligible Dependent.
The Plan will offer COBRA continuation coverage to qualified beneficiaries only after the Plan Administrator has been notified that a qualifying event has occurred. When the qualifying event is the end of employment or reduction of hours of employment, death of the employee, or entitlement of the employee to Medicare (Part A, Part B, or both), the member must notify the Plan Administrator within 60 days of the date you would otherwise lose coverage under a group health plan due to a qualifying event, whichever is later.
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 Administrator. The group health plan requires you to notify the Plan Administrator within 60 days after the qualifying event occurs or the date you would otherwise lose coverage under a group health plan due to a qualifying event, whichever is later. You must send this notice to the Plan Administrator in accordance with the procedures set forth below under “Furnishing Notice to Plan Administrator.”
Within 30 days of the Plan Administrator receiving notice (in accordance with the procedures set forth below under “Furnishing Notice to Plan Administrator”) that a qualifying event has occurred, the Plan Administrator will send out an election notice, offering COBRA continuation coverage to each of the qualified beneficiaries.
For each qualified beneficiary who elects COBRA continuation coverage, COBRA continuation coverage will begin on the date that group health plan coverage would otherwise have been lost.
COBRA continuation coverage is a temporary continuation of coverage. When the qualifying event is the death of the employee, enrollment of the employee in Medicare (Part A, Part B, or both), your divorce or legal separation, or a dependent child losing eligibility as a dependent child, COBRA continuation coverage lasts for up to 36 months.
The maximum COBRA continuation coverage period is 24 months for employees on military leave who are covered by USERRA.
When the qualifying event is the end of employment or reduction of the employee’s hours of employment, COBRA continuation coverage lasts for up to 18 months. There are two ways in which this 18-month period of COBRA continuation coverage can be extended (see below).
Disability Extension of 18-Month Period of Continuation Coverage
If you or anyone in your family covered under the group health plan is determined by the Social Security Administration to be disabled at any time during the first 60 days of COBRA continuation coverage and you notify the Plan Administrator in a timely fashion, you and your entire family can receive up to an additional 11 months of COBRA continuation coverage, for a total maximum of 29 months. You must make sure that the Plan Administrator is notified of the Social Security Administration’s determination within 60 days of the latest of the date of the determination, the date of the qualifying event or the date you would otherwise lose coverage under a group health plan due to a qualifying event, and before the end of the 18-month period of COBRA continuation coverage. This notice should be sent to the Plan Administrator in accordance with the procedures set forth below under “Furnishing Notice to Plan Administrator.”
Second Qualifying Event Extension of 18-Month Period of Continuation Coverage
If your family experiences another qualifying event while receiving COBRA continuation coverage, and such event would result in loss of health coverage if the first qualifying event had not already occurred, the spouse and dependent children in your family can get additional months of COBRA continuation coverage, up to a maximum of 36 months. This extension is available to the spouse and dependent children if the former employee dies, becomes entitled to Medicare (Part A, Part B, or both), or gets divorced or legally separated. The extension is also available to a dependent child when that child stops being eligible under the group health plan as a dependent child. In all of these cases, you must make sure that the Plan Administrator is notified of the second qualifying event within 60 days of the second qualifying event or the date you would otherwise lose coverage under a group health plan due to a qualifying event, whichever is later. This notice must be sent to the Plan Administrator in accordance with the procedures set forth below under “Furnishing Notice to Plan Administrator.”
Furnishing Notice to Plan Administrator
YOU SHOULD FOLLOW THESE PROCEDURES WHEN NOTIFYING THE PLAN ADMINISTRATOR OF A QUALIFYING EVENT OR A DISABILITY DETERMINATION. FAILURE TO FOLLOW THESE PROCEDURES MAY CAUSE LOSS OF COVERAGE.
When furnishing a notice to the Plan Administrator with respect to the occurrence of a qualifying event or with respect to a disability determination by the Social Security Administration, such notices must be delivered to the Plan Administrator (i) by hand-delivery, (ii) via facsimile (iii) first class mail, or (iv) by registered or certified mail, return receipt requested. Such notices must include the name(s) of the covered employee and/or qualified beneficiaries, as applicable, a general description of, and circumstances surrounding, the qualifying event or disability determination, and the date of such qualifying event or disability determination. Once the Plan Administrator receives such notice, it reserves the right to make further inquiry to verify the circumstances surrounding such qualifying event or disability determination.
Payment of Premiums for COBRA Continuation Coverage
In order to remain eligible for COBRA Continuation Coverage, an individual must pay the premium for such coverage by the premium due date as described below:
The first (1st) monthly premium for COBRA Continuation Coverage (which includes payment of the premiums for each month from the date coverage would otherwise have terminated through the month in which payment is made), must be paid to the Fund no later than forty-five (45) days after the date on which an individual elects such coverage;
The premium due date for all subsequent monthly premiums is the first (1st) day of the calendar month for which COBRA Continuation coverage is being obtained; provided, however, that a monthly premium for any particular month shall be considered to be timely made so long as it is received by the Fund by the thirtieth (30th) day of such month (“grace period”).
Amount of Premium
The Fund will charge a monthly premium for COBRA Continuation Coverage
The Board of Trustees, on an annual basis, will establish the monthly premiums to be charged for such coverage for each Schedule of Benefits offered by the Fund. The amount of the premium shall be based on single, two (2) persons or family coverage and shall not exceed one hundred and two percent (102%) of the Fund’s actual cost for providing benefits to similarly situated individuals, as determined by the Fund’s actuary. The premium shall not exceed one hundred fifty percent (150%) of such actual cost for all months of COBRA Continuation Coverage after the eighteenth (18th) month for a Participant whose coverage was extended under the special disability rule set forth in the previous section
The Fund will credit the Participant for the dollar amount of all Contributions actually made on his behalf in any month by any participating Employer provided that a Participant who elects COBRA continuation coverage at a lower Schedule of Benefits than that provided by his Employer’s contributions shall not be entitled to any cash refund in excess of the cost of the COBRA Schedule of Benefits and shall not have any Employer contributions credited from one month to the next.
For any Participant who elects COBRA coverage at the same Benefit Schedule as provided by his Employer’s contribution, the first week of Employer contribution paid on his behalf in any month shall be credited as 2 weeks of contribution.
Types of Premiums
Core coverage, or if eligible, core and non-core coverage, shall be offered.
End of Continuation Coverage
Continuation coverage will end earlier that the period elected if:
- Timely payment of premiums for the continuation coverage is not made;
- The qualified beneficiary first becomes covered under any other group health plan, after the COBRA election, as an employee or otherwise;
- The qualified beneficiary first becomes entitled to benefits under Medicare, after the COBRA election;
- The Plan Sponsor ceases to provide any group health plan to any employer ;
- You, as the covered employee, cease to be disabled, if continuation coverage is due to your disability; or
- The period of continuation coverage expires.
Health Insurance Marketplace
You may have other options available to you when you lose group health coverage. For example, you may be eligible to buy an individual plan through the Health Insurance Marketplace. By enrolling in coverage through the Marketplace, you may qualify for lower costs on your monthly premiums and lower out-of-pocket costs. Additionally, you may qualify for a 30-day special enrollment period for another group health plan for which you are eligible (such as a spouse’s plan), even if that plan generally doesn’t accept late enrollees. For more information about the Marketplace, visit www.healthcare.gov.
If You Have Questions
If you have questions about your COBRA continuation coverage, you should contact the Plan Administrator or you may contact the nearest Regional or District Office of the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA). Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA’s website at www.dol.gov/ebsa.
Keep Your Plan Informed of Address Changes
In order to protect your family’s rights, you should keep the Plan Administrator informed of any changes in the addresses of family members. You should also keep a copy, for your records, of any notices you send to the Plan Administrator.