COBRA Qualifying Events
The length of time that you can remain on COBRA is determined by the qualifying event or reason for your loss of coverage. Depending on the qualifying event, you may have up to 18, 29 or 36 months of continuation coverage. Here are some of the more common qualifying events and the corresponding lengths of coverage:
18 month qualifying events for an employee, spouse of employee or dependent
voluntary or involuntary termination of employment for any reason other than “gross misconduct”
a reduction in employment hours which would result in a loss of coverage
29 month qualifying events for an employee, spouse of employee or dependent
loss of coverage due to a reduction in hours or termination, where the Social Security Administration determined disability was the cause:
36 month qualifying events for a spouse of employee or dependent
Employee death
Medicare Entitlement
Divorce or legal separation
Dependent ineligibility
A Qualifying Event occurs in conjunction with a loss of group health coverage and “qualifies” members of the plan for continuation coverage. If you are an employee and covered by a group health plan, you have a right to choose this continuation coverage if:
you lose your group health coverage because of a reduction in your hours of employment or termination of employment (for reasons other than gross misconduct)
you are a military reservist and are called to active duty, and your employer wants to discontinue your health care coverage, you have a right to have the opportunity to purchase continuation coverage
you are a retired employee, you have the right to choose this continuation coverage if you lose your group health coverage because of a bankruptcy proceeding but only if the case commenced on or after July 1, 1986
If you are the spouse of an employee covered by a group health plan or of a retiree for reason 5, below, you have the right to choose continuation coverage for yourself if you lose group health coverage for any of the following reasons:
1. The death of your spouse
2. A termination of your spouse’s employment (for reasons other than gross misconduct)
or reduction in your spouse’s hours of employment
3. Divorce or legal separation from your spouse
4. Your spouse becomes entitled to Medicare
5. If your spouse is retired, a bankruptcy proceeding in a case involving your spouse’s employer commenced after July 1, 1986
6. Your spouse is a military reservist and is called to active duty
In the case of a dependent child of an employee covered by the group health plan, or a retiree for reason 6, below, he or she has the right to continuation coverage if group health coverage is lost for any of the foregoing seven reasons:
1. The death of a parent
2. The termination of a parent’s employment (for reasons other than gross misconduct) or a reduction in hours of employment
3. Parents’ divorce or legal separation
4. A parent becomes entitled to Medicare
5. The dependent ceases to be a “dependent child” as defined under your benefit booklet
6. If a parent is retired, a bankruptcy proceeding involving the parent’s employer
7. The parent is a military reservist and is called to active duty
WHO QUALIFIES?
Any individual covered under the plan prior to the loss of coverage/qualifying event
Newborns or adopted children added within the timeframe stated under your contract are considered Qualified Beneficiaries if enrolled.
PLANS TO BE OFFERED
If there is a choice among types of coverage under the plan, each of you who is eligible for continuation coverage is entitled to elect continuation of coverage even if the covered employee does not make that election. For example, if the employee does not choose to elect COBRA for himself/herself, the spouse and or dependent children can elect coverage in lieu of the employee. Similarly, a spouse or dependent child may elect a different coverage from the coverage that the employee elects.
Also, you must be allowed to continue on all health plans that you were enrolled in prior to the qualifying event. These would include medical, dental, vision, prescription and under certain circumstances an EAP plan.
YOUR RESPONSIBILITY
Under the law, the employee or a family member has the responsibility to inform the Plan Administrator of a divorce, legal separation, or a child losing dependent status under the group health plan within 60 days of the qualifying event.
Additionally, in disability cases, you must be considered disabled by the Social Security Administration and receive an award letter from them before you will be granted the additional 11 months on COBRA. Also, your date of disability must be within the first 60 days of the COBRA continuation period.
The Plan Administrator must be:
notified of the determination of disability as defined in the Social Security Act within 60 days of the date of the determination
notified before the end of the original 18-month COBRA continuation period
notified within 30 days of the date of any final determination that the qualified beneficiary is no longer disabled.
YOUR EMPLOYER’S RESPONSIBILITY
Your employer has the responsibility to notify the Plan Administrator of the employee’s death, termination or reduction in hours, Medicare entitlement or a bankruptcy proceeding. Notice must be given to the Plan Administrator within 30 days of the event.
When the Plan Administrator is notified that one of these events has happened, the Plan Administrator will in turn notify you that you have the right to choose continuation coverage. Under the law, you have at least 60 days from the date you would lose coverage because of one of the events described above, or the date notice of your election rights is sent to you, whichever is later, to inform the Plan Administrator that you want continuation coverage.
If you do not choose continuation coverage within the 60 days, your group health insurance coverage will end. If you choose continuation coverage, your employer is required to give you coverage which, as of the time coverage is being provided, is identical to the coverage provided under the plan to similarly situated employees or family members. This means that if the coverage for similarly situated employees or family members is modified, your coverage will be modified. The law requires that you be afforded the opportunity to maintain continuation coverage for 36 months unless you lost group health coverage because of termination of employment or reduction in hours. In that case, the required continuation coverage period is eighteen months. The eighteen months may be extended to thirty-six months if other events (such as death, divorce, legal separation, or Medicare entitlement, but other than a bankruptcy proceeding) occur during that eighteen month period.
The eighteen month period may be extended to twenty nine months if a qualified beneficiary (employee or dependent) is determined to be disabled (for Social Security disability purpose-disabled at the time of termination or reduction in hours) at any time during the first 60 days of continuation coverage, provided they comply with the Certification and notice requirements. The qualified beneficiary must also notify the Plan Administrator within 30 days of any final determination that the qualified beneficiary is no longer disabled. In no event will continuation coverage last beyond three years from the date of the event that originally made a qualified beneficiary eligible to elect coverage.
The law clarifies that dependents of employees who become entitled to Medicare before experiencing a Qualifying Event are entitled to continuation coverage for the longer of thirty-six months from the employee’s Medicare entitlement date or eighteen months from the event date.
If you have lost coverage under the plan because of a bankruptcy proceeding you may be entitled to COBRA coverage. Consult with your own legal counsel. Coverage continues until your death or the death of another qualified beneficiary, and if you die, coverage continues for your surviving spouse or dependent child for thirty-six months after your death. However, the law also provides that your continuation coverage may be terminated for any of the following five reasons:
1. Your employer no longer provides group health coverage to any of its employees;
2. The premium for your continuation coverage is not paid on time;
3. You become covered by another group plan that does not limit or exclude coverage for your pre-existing conditions. The law allows COBRA coverage to end if the other plan’s pre-existing condition exclusions do not apply to you by reason of HIPAA’S restriction on pre-existing condition exclusions.
4. You become entitled to Medicare (unless you are a retiree, a spouse of a surviving spouse of a retiree, or a dependent child of a retiree, if the bankruptcy of the employer is the event which resulted in the loss of coverage.)
5. You extended coverage for up to 29 months doe to your disability and there has been a final determination that you are no longer disabled.
You do not have to show that you are insurable to choose continuation coverage. However, under the law, you may have to pay all or part of the premium for your
Continuation Coverage. The cost of continuation coverage is 102% of the employer’s applicable premium. but in disability cases, the cost may be no higher than 150% for each additional month of coverage after the initial 18-month period. There is a grace period of at least 30 days after the due date for payment of the regularly scheduled premium. (The law also says that, at the end of the 18 month or 36 month continuation coverage period, you must be allowed to enroll in an individual conversion health plan if provided under your employers Group Health Plan.)
If you have any questions about the law, please contact your Plan Administrator. Also, if you have a change in marital status or address, please notify Human Resources.