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Even if the employer's physical location has closed, as
long as the employer exists, continues to sponsor a plan and employs
you, you would generally remain covered under your existing health
plan. Many plans require a contribution from the employee
to help pay for health coverage. You may need to make
arrangements to make this payment if you are not in pay status for
some reason.
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Many employers affected by the events of September 11th have set up temporary work quarters, or have made other provisions for
their employees to contact them. The employer's representative should be able to
give you the name of the person to contact to obtain claim forms or
other documents.
If it is impossible to locate a contact person for your employer, you may contact one of our
benefits advisors at the EBSA office nearest you, or contact EBSA by
email.
If you do not receive a certificate of creditable
coverage from your plan by the time you need one, you may demonstrate
to a new plan or insurer that you have creditable coverage by
attesting to the period of creditable coverage, producing some
supporting evidence (such as a pay stub that reflects a deduction for
health insurance, an explanation of benefits form, or verification by
a doctor that you had prior health insurance coverage), and
cooperating with an attempt to verify your prior health coverage.
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There may be several health coverage options available to you:
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Special Enrollment in
Another Group Health Plan -
If you
think you or your dependents may be losing health coverage and other
group health coverage is available to you (for example, if your
family is losing eligibility for coverage under your employer’s
group health plan and your spouse’s employer offers a group health
plan), you should consider requesting special enrollment in your
spouse’s plan. Special enrollment gives you and your family
an opportunity to enroll in a plan for which you are otherwise
eligible regardless of the plan’s applicable enrollment periods.
However, to qualify, you must request enrollment within 30 days of
losing eligibility for other coverage. After special
enrollment is requested, coverage is required to be made effective
no later than the first day of the first month following your
request for enrollment. This type of coverage is usually less
expensive because the employer often pays a part of the premium.
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COBRA Continuation Coverage
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If you are losing coverage
through an employer that continues to offer a group health plan, you
may want to consider electing COBRA continuation coverage. COBRA,
which generally applies to employers with 20 or more employees,
allows you and your family to continue the same group health
coverage at group rates. Your cost may be higher than what you
were paying before (and is usually higher than what you would pay
for coverage if you special enroll in your spouse’s plan), but
generally it’s lower than what you would pay for private
individual health insurance coverage. You should get a notice
from your plan regarding the availability of COBRA coverage.
After this notice is provided, you generally have 60 days to elect
coverage and it is then retroactive to the date of loss of coverage.
However, you are not required to wait until you receive the election
notice to elect COBRA; you may elect earlier. (Note: Once you
have elected COBRA, you won’t be eligible for special enrollment
in another group health plan, such as a spouse’s plan, until you
have exhausted all COBRA coverage available to you.) COBRA
coverage typically lasts 18 months, but may last longer in certain
circumstances.
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Health Coverage Through a
Government Program -
You and your
family may be eligible for health coverage through your state
government or the U.S. government. For information on Medicaid
or other government programs for low-income individuals and
individuals with special needs, contact your state government.
For information on your State Children’s Health Insurance Program
for children of qualified families, contact your state government.
For information on Medicare for people aged 65 and over, and for
certain people who are disabled or have end stage renal disease,
contact the U.S. Department of Health and Human Services, Centers
for Medicare & Medicaid Services at 1.800.MEDICARE.
Private
individual health insurance coverage. You may qualify for guaranteed
access to such coverage if:
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You had health coverage for at least 18 months without a significant
break in coverage (generally a break in coverage of 63 days or more)
and your most recent period of coverage was under a group health
plan
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Your group coverage was not terminated because you committed fraud
or did not pay premiums
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You either were not offered COBRA continuation coverage (or coverage
through a similar state program), or if you were offered COBRA
coverage (or coverage through a similar state program), you both
elected and exhausted COBRA coverage
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You are not eligible for other health
coverage
If you meet these criteria, you may qualify for guaranteed access to
individual health insurance coverage for yourself and
your family, without any preexisting condition exclusion. (If you don’t
meet these criteria, you still may be able to obtain individual health coverage.)
However, the cost of individual health insurance coverage is often higher than
similar coverage under a group health plan obtained through special enrollment or
COBRA. For more information on individual health coverage, contact your
state insurance commissioner, or the Department of Health and Human Services,
Centers for Medicare & Medicaid Services at
410.786.3000.
Note:
When considering your health coverage options, you should examine
the scope of the coverage (including benefit coverage and
limitations, visit limits, and dollar limits), premiums,
cost-sharing (including co-payments and deductibles), and waiting
periods for coverage.
For information on the coverage through a
particular group health plan, you should review the plan’s Summary
Plan Description (SPD – a document often referred to as an
insurance booklet that describes your health coverage). Call
the plan administrator and request a copy if you don’t have one.
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You should ask the
employer for more information. The employer could be:
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Making
this offer of paid coverage only if COBRA coverage is declined. In this case, if you elect paid coverage for 12
months, you will be ineligible for COBRA coverage, which is more
expensive, but lasts longer.
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Paying
the first 12 months of COBRA coverage. In this case, you
will be able to continue coverage at your own expense for up to 24
additional months
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Delaying
your loss of coverage so that you will be able to have COBRA
coverage at your own expense for up to 36 additional months
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If
your plan is subject to COBRA, you should be eligible for COBRA
continuation coverage. However, whether you can obtain
coverage for your partner depends on how often your plan allows
active employees to add domestic partners. You should contact
your plan administrator for more information on your partner’s
eligibility for coverage. You and your partner may also be
eligible for special enrollment in a plan sponsored by your partner’s
employer, if available. Contact your partner’s plan
administrator to find out whether you and your partner are eligible.
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If
your plan is subject to COBRA, you should be able to elect COBRA for
yourself and your partner. In addition, if your partner is
otherwise eligible for coverage in his or her employer’s group
health plan, he or she could be eligible for special enrollment if a
request for enrollment is made within 30 days of losing eligibility
for coverage under your plan. Whether or not you are an
eligible dependent in your partner’s group health plan depends on
the terms of that plan and your partner should contact the plan
administrator for more information on your eligibility.
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COBRA
does not require that the plan provide you continuation coverage.
Rather, whether you are eligible for any coverage depends on the
terms of the plan. You should contact the plan administrator
for more information. In addition, if you are eligible for
coverage under another group health plan (for example, if your
employer sponsors a plan), you could be eligible for special enrollment
in your employer’s plan if you request enrollment within 30 days
of losing eligibility for your other coverage. You should
contact your employer’s plan administrator for more information on
special enrollment.
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Employers offer health benefits on a voluntary basis. Federal
law does not require employers to offer health coverage to their
employees nor does it prevent employers from cutting or reducing
benefits in many instances. Employees and their
families may have a right to continuation coverage under COBRA if
the plan still exists and may have a contractual right to coverage
if, for example, benefits are required under a collective bargaining
agreement. In addition, a plan cannot deny eligibility or
continued eligibility based on health status.
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Providing for health care is an important part of retirement. Some
employees are fortunate: they belong to employer-provided health
care plans that carry over into retirement. Employees and retirees
should know that private sector employers are not required to
promise retiree health benefits. Furthermore, when employers do
offer retiree health benefits, nothing in federal law prevents them
from cutting or eliminating those benefits - unless they have made
a specific legally binding promise to maintain the benefits.
The key to understanding your retiree health benefits lies in the
documents governing your plan. If you have not already done
so, you should obtain a copy of the Summary Plan Description to
determine the nature of the employer’s promise to you.
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You should contact your employer to determine the employer’s
intent to pay the premium. You may wish to contact the
insurance company to determine how long the payment has been in arrears, if the insurance company has provided a grace period for
late payment, and how long the employer has been given to make the
payment. You may also wish to contact your
state insurance commissioner regarding any rights you may have under state law to
pay premiums directly to the insurance company or convert your
health coverage to an individual policy.
If your
premiums are in arrears or your coverage has been cancelled as a
result of the employer’s failure to make the premium payment,
you may contact one of our benefits advisors at the EBSA
office nearest you, or contact EBSA by email.
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Many
employers affected by the events of September 11th have set up
temporary work quarters, or have made other provisions for their
employees to contact them. The employer should be able to give
you the information needed to continue making your COBRA premium
payments.
If it
is impossible to locate a contact person for your employer, you may contact one of
our benefits advisors at the EBSA
office nearest you, or contact EBSA by email.
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Although it may be hard to think about health coverage right now, it
is important that you don’t wait too long before considering your
options and making a health coverage decision.
First,
because several of your best choices are only available for a
limited time, waiting may eliminate some of your best options.
Special enrollment in your spouse’s plan must be requested within
30 days of loss of eligibility for other health coverage.
COBRA continuation coverage must be elected within 60 days of when
the COBRA election notice is provided to you.
Second, if you experience a
significant break in your health coverage, you may experience
long-term adverse effects on future health coverage. For
example, a 1996 federal law known as the Health Insurance
Portability and Accountability Act (HIPAA) placed strict limitations
on a group health plan’s ability to deny benefits for medical
conditions based on a preexisting condition exclusion. Under
HIPAA, plans generally must give you credit for prior health
coverage, reducing or eliminating any preexisting condition
exclusion under the plan. However, if you experience a
significant break in coverage (generally a break of 63 days or
more), you may lose your credit for prior health coverage and you
will lose guaranteed access to individual health insurance coverage.
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For
more information on your health benefits rights and options, link to
the following publications on our website:
You may also call the
Toll-Free Employee & Employer Hotline number at 1.866.444.EBSA (3272) to request one or more copies of the publications.
If you still have questions about your rights, or
need assistance in obtaining your benefits, you may contact one of
our benefits advisors at the EBSA
office nearest you, or contact EBSA by email.
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Every pension plan is required to have a plan administrator.
The plan administrator may be the employer (or labor organization)
sponsoring the benefit plan or it may be some individual or entity
appointed to serve as the plan administrator. Pension plans must provide participants with a Summary Plan
Description (SPD) describing the plan rules in plain English.
The SPD should also contain information on how to identify and
locate the plan administrator, as well as steps to follow in
applying for a benefit. Whenever possible, a participant
should first try to contact the plan administrator for information
on benefits.
A
second point of contact may be the employer’s human resource or
personnel department. If the plan employer’s place of
business is closed and no temporary work quarters have been
established, it may not be possible to contact the plan
administrator or the employer.
However,
there may be others who may be of help. These include the plan
trustee who holds the plan assets, a mutual fund, insurance
company, bank or other financial institution providing services to the plan, a third party who handles
the administrative functions of the plan, or the plan accountant.
These persons may be identified in plan correspondence or benefit
statements that you may have received previously.
When
it is impossible to contact the plan administrator, the employer or
other officials mentioned above, you may contact one of our benefits advisors
at the EBSA
office nearest you, or contact EBSA by email.
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Call your plan administrator to determine the reason for the delay
in the receipt of your payment. Ask whether the plan is having
operational problems or whether this problem is limited to your
payment. If the problem is limited to your payment, discuss how to
resolve your problem with the administrator. If the delay
involves a plan operation issue, ask what efforts are being made to
make timely payments.
Your employer or former employer may be able to get answers to your
questions. Parent or subsidiary companies of your employer also may
be able to help you get information on the status of payments.
Firms providing services to your plan such as third party
administrators, investment advisors and trustees may also be able to
provide you with information about benefit payments.
If you are still unable to get information about the status of your
benefits, you may contact one of our benefits advisors at the EBSA
office nearest you, or contact EBSA by email.
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Begin by attempting to make changes through normal procedures
contained in your Summary Plan Description or other plan documents.
If your employer or the financial services firm holding your account
was affected by the events of September 11th, there may be a delay
in making changes to your investments. In this event, you
should contact the plan administrator or other plan officials such
as the employer sponsoring the plan, trustee, or the party
providing administrative services to the plan to determine what
steps are being made to restore the plan’s normal operations.
If you are unable to obtain this information,
you may contact one of our benefits advisors at the EBSA
office nearest you, or contact EBSA by email.
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Many plans provide for loans to plan participants. However,
federal law does not require plans to make loans. Your Summary
Plan Description (SPD) or other plan documents should explain the
terms of any plan loan program. You will only be able to
obtain a loan if the plan has a loan program.
Your
plan may also permit withdrawals in the event of hardship,
disability or
termination of employment. Federal law, however, does not require
that plans provide for such withdrawals. Your SPD or other
plan documents should provide information concerning any right you
may have with respect to such withdrawals. Withdrawing money
from your plan may have tax or other adverse consequences.
(See the following question.)
If you
wish to get money out of your pension plan in the form of a loan or
a hardship withdrawal, you should contact your plan administrator,
plan sponsor, or other plan official. If you are unable to
contact any of these officials, you may contact one of our benefits advisors
at the EBSA
office nearest you, or contact EBSA by email.
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Yes. Receiving a lump sum or other distribution from your pension
plan may affect your ability to receive unemployment compensation.
You should check with your state unemployment office.
Receiving money from your pension plan may result in
additional income tax. You can defer these taxes, however, if you
keep the money in your plan or if you "roll over" the
money into a qualified pension plan or Individual Retirement Account
(IRA). There are provisions in the Internal Revenue Code that govern
these rollovers.
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Federal pension law does not set a
specific time within which plans must start paying benefits after
you retire or otherwise become eligible to receive benefits.
Plan administrators must act prudently and follow the procedures in
the plan documents. Your Summary Plan Description (SPD) or other plan documents should
provide information on those procedures. If you have specific
questions, you should contact the plan administrator.
Some pension plans pay benefits only after a participant reaches
normal retirement age. Many plans, however, allow for earlier distribution of benefits
under certain circumstances. The rules permitting earlier
distribution of benefits will be contained in the plan document or
SPD. For example, some plans may require
a participant to be separated from employment for a specified period
of time before being eligible to receive a benefit.
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Federal law does not require that plans provide for lump sum
distributions. Many plans, however, do contain provisions
allowing for lump sum distributions. Consult the plan documents
or Summary Plan Description to determine your eligibility for a lump
sum distribution.
If you
are in a defined benefit plan (a plan in which you receive a benefit
based on a formula established in the plan) your benefits usually begin at retirement
age. These types of plans are less likely than defined contribution
plans to contain a provision
that enables you to receive your benefits in a lump sum.
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One of the most important documents you should have is the Summary
Plan Description (SPD). It outlines the plan rules including benefit
rights, the way benefits are calculated, how to apply for benefits
and how to appeal a denial of a claim for benefits. A copy of
the SPD must be provided when a plan participant or beneficiary
requests it in writing. If you do not have a copy of the SPD,
you should contact the plan administrator.
In addition to the SPD, you can ask the plan administrator to
provide you information about the amount of benefits your spouse had
earned to date and vesting status (the amount of benefits
earned that cannot be forfeited). This is important
information for you, whether you withdraw your money now or later.
You should also ask the plan administrator what information the plan
requires to decide your claim and how to file the claim.
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If you have been awarded a portion of your former spouse's pension
in a domestic relations proceeding, you may wish to verify that the
plan administrator still has records of the determination that you
are entitled to benefits under the plan.
If the
plan's records have been destroyed, you may need to provide the plan
with a copy of the domestic relations order that established your
entitlement to benefits under the plan. You should also
provide the plan with any other evidence you may have that the order
was sufficient and that you were entitled to benefits. Other
evidence might include a benefit statement from the plan showing
your benefit.
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Federal law generally does not prohibit employers from terminating their
pension plans. The law does protect your rights to benefits
earned before the plan is terminated and requires that employers
follow certain rules when terminating plans. There is,
however, no right to earn additional benefits under the plan.
The benefits you are entitled to will depend on the type of plan you
participate in and how long you have worked for the employer.
If you
were covered by a defined benefit plan, the benefits you may be
entitled to generally will depend on a formula that is contained in
your plan documents and Summary Plan Description (SPD). The plan’s formula may include
factors such as age, length of service and pay. Benefits may
not be payable under the plan until you reach normal retirement age,
generally age 65 or some other age specified in the plan documents
and SPD.
The
termination of defined benefit plans is also regulated by the
Pension Benefit Guaranty Corporation (PBGC), which guarantees
certain benefits in the event that the plan’s assets are not
sufficient to pay benefits. For information on the PBGC’s
plan termination insurance program, contact the PBGC’s Customer
Service Center at 1.800.400.7242.
If you were covered by a defined contribution plan, such as a 401(k)
plan, profit sharing, or employee stock ownership plan, each
participant has an individual account in the plan.
Contributions, earnings, and investment gains or losses are
credited to this individual account. You are always 100%
vested in any contributions you made to the plan, including
investment gains and earnings on your contributions, less any
investment losses. In addition, depending on the terms of the
plan, you may be vested in part or all of your employer’s
contributions. You will be automatically 100% vested in the
employer contributions to the plan when the plan is terminated.
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You should search your personal records for any material or
documents that would help to establish your employment and
participation in the plan. Look for pay statements and W-2
forms showing that you were covered under a plan and the amount you
may have contributed to the plan. You also may have benefit or
account statements issued by the plan that you may be keeping with
your important papers. For example, many 401(k) plans
distribute regular account statements. These records may show
the names of the investment vehicles in which your 401(k) account was invested.
When
you began employment with the employer sponsoring the plan, you may
have been given an employee handbook and beneficiary designation
forms to complete. You may have copies of these that may also
help to establish your rights under the plan.
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More information on your pension benefits
rights is available in the
following publications:
You may also call EBSA's Toll-Free Employee &
Employer Hotline number at 1.866.444.EBSA (3272) to request copies of publications.
For
information on a particular pension plan, you should review the
plan’s Summary Plan Description. Call the plan administrator
and request a copy if you don’t have one.
If you still have questions about your rights, or
need assistance in obtaining your benefits, you may contact one of
our benefits advisors at the EBSA
office nearest you, or contact EBSA by email.
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