Q1: What is COBRA continuation health coverage? Q2: What does COBRA do? Q3: Who is entitled to benefits under COBRA? Plan Coverage - Group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA. Both full and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time. Qualified Beneficiaries - A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event who is either an employee, the employee's spouse, or an employee's dependent child. In certain cases, a retired employee, the retired employee's spouse, and the retired employee's dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during the period of COBRA coverage is considered a qualified beneficiary. Agents, independent contractors, and directors who participate in the group health plan may also be qualified beneficiaries. Qualifying Events - Qualifying events are certain events that would cause an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries are and the amount of time that a plan must offer the health coverage to them under COBRA. A plan, at its discretion, may provide longer periods of continuation coverage. Qualifying Events for Employees:
Qualifying Events for Spouses:
Qualifying Events for Dependent Children:
Q4: How does a person become eligible for COBRA continuation coverage? Q5: What group health plans are subject to COBRA? Q6: What process must individuals follow to elect COBRA continuation coverage? A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation or a child's ceasing to be covered as a dependent under plan rules. Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium. Note: If your qualifying event was involuntary termination of employment that occurred on or after September 1, 2008 through February 16, 2009, you may be eligible for an additional election opportunity under the American Recovery and Reinvestment Act of 2009 (ARRA). For more information see the questions below or visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor. Q7: How long after a qualifying event do I have to elect COBRA coverage? Note: If your qualifying event was involuntary termination of employment that occurred on or after September 1, 2008 through February 16, 2009, you may be eligible for an additional election opportunity under ARRA. For more information see the questions below or visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor. Q8: How do I file a COBRA claim for benefits? You should submit a claim for benefits in accordance with the plan's rules for filing claims. If the claim is denied, you must be given notice of the denial in writing generally within 90 days after the claim is filed. The notice should state the reasons for the denial, any additional information needed to support the claim, and procedures for appealing the denial. You will have at least 60 days to appeal a denial and you must receive a decision on the appeal generally within 60 days after that. Contact the plan administrator for more information on filing a claim for benefits. Complete plan rules are available from employers or benefits offices. There can be charges up to 25 cents a page for copies of plan rules. Q9: Can individuals qualify for longer periods of COBRA continuation coverage?
If these requirements are met, the entire family qualifies for an additional 11 months of COBRA continuation coverage. Plans can charge 150% of the premium cost for the extended period of coverage. Q10: Is a divorced spouse entitled to COBRA coverage from their former spouses’ group health plan? Divorced spouses may call their plan administrator or the EBSA Toll-Free number, 1.866.444.EBSA (3272) if they have questions about COBRA continuation coverage or their rights under ERISA. Q11: If I waive COBRA coverage during the election period, can I still get coverage at a later date? Q12: Under COBRA, what benefits must be covered? Q13: When does COBRA coverage begin? Note: If your qualifying event was involuntary termination of employment that occurred on or after September 1, 2008 through February 16, 2009, you may be eligible for an additional election opportunity under ARRA. The date coverage begins will generally differ for individuals exercising this additional election. For more information see the questions below or visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor. Q14: How long does COBRA coverage last? Coverage begins on the date that coverage would otherwise have been lost by reason of a qualifying event and will end at the end of the maximum period. It may end earlier if:
Although COBRA specifies certain periods of time that continued health coverage must be offered to qualified beneficiaries, COBRA does not prohibit plans from offering continuation health coverage that goes beyond the COBRA periods. Some plans allow participants and beneficiaries to convert group health coverage to an individual policy. If this option is generally available from the plan, a qualified beneficiary who pays for COBRA coverage must be given the option of converting to an individual policy at the end of the COBRA continuation coverage period. The option must be given to enroll in a conversion health plan within 180 days before COBRA coverage ends. The premium for a conversion policy may be more expensive than the premium of a group plan, and the conversion policy may provide a lower level of coverage. The conversion option, however, is not available if the beneficiary ends COBRA coverage before reaching the end of the maximum period of COBRA coverage. Q15: Who pays for COBRA coverage? For qualified beneficiaries receiving the 11 month disability extension of coverage, the premium for those additional months may be increased to 150 percent of the plan's total cost of coverage. COBRA premiums may be increased if the costs to the plan increase but generally must be fixed in advance of each 12-month premium cycle. The plan must allow you to pay premiums on a monthly basis if you ask to do so, and the plan may allow you to make payments at other intervals (weekly or quarterly). The initial premium payment must be made within 45 days after the date of the COBRA election by the qualified beneficiary. Payment generally must cover the period of coverage from the date of COBRA election retroactive to the date of the loss of coverage due to the qualifying event. Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments. Payment is considered to be made on the date it is sent to the plan. If premiums are not paid by the first day of the period of coverage, the plan has the option to cancel coverage until payment is received and then reinstate coverage retroactively to the beginning of the period of coverage. If the amount of the payment made to the plan is made in error but is not significantly less than the amount due, the plan is required to notify you of the deficiency and grant a reasonable period (for this purpose, 30 days is considered reasonable) to pay the difference. The plan is not obligated to send monthly premium notices. COBRA beneficiaries remain subject to the rules of the plan and therefore must satisfy all costs related to co-payments and deductibles, and are subject to catastrophic and other benefit limits. Note: If your qualifying event was involuntary termination of employment that occurred on or after September 1, 2008 through December 31, 2009, you may be eligible for a premium reduction under the American Recovery and Reinvestment Act of 2009. For more information see the questions below or visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor. Q16: If I elect COBRA, how much do I pay? While COBRA rates may seem high, you will be paying group premium rates, which are usually lower than individual rates. Since it is likely that there will be a lapse of a month or more between the date of layoff and the time you make the COBRA election decision, you may have to pay health premiums retroactively-from the time of separation from the company. The first premium, for instance, will cover the entire time since your last day of employment with your former employer. You should also be aware that it is your responsibility to pay for COBRA coverage even if you do not receive a monthly statement. Although they are not required to do so, some employers may subsidize COBRA coverage. Note: If your qualifying event was involuntary termination of employment that occurred on or after September 1, 2008 through December 31, 2009, you may be eligible for a premium reduction under the American Recovery and Reinvestment Act of 2009. For more information see the questions below or visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor. Q17: I have heard that the Stimulus package signed by the President included a temporary COBRA premium reduction and additional enrollment opportunity. I would like more information. Individuals who are eligible for COBRA coverage because of their own or a family member’s involuntary termination of employment that occurred from September 1, 2008 through December 31, 2009 and who elect COBRA may be eligible to pay a reduced premium amount that is only 35% of the premium costs for your COBRA coverage for up to 9 months. Additionally, if you were offered Federal COBRA continuation coverage as a result of an involuntary termination of employment during that time period and you either declined to take COBRA coverage at that time, or you elected COBRA and later discontinued it, you may have another opportunity to elect COBRA coverage and pay a reduced premium. If you have specific questions about your situation and how these new rules apply to you, you may wish to speak with one of our Benefits Advisors by calling 1.866.444.3272. You should also check the COBRA Premium Reduction FAQs. Q18: How can I apply for the COBRA premium subsidy? If you have specific questions about your situation and how these new rules apply to you, you may wish to speak with one of our Benefits Advisors by calling 1.866.444.3272. You should also check the COBRA Premium Reduction FAQs Q19: I am eligible for the premium reduction and have been enrolled in COBRA coverage since before the ARRA’s enactment. Can I get a refund of 65% of the premiums I have paid prior to the law’s enactment? If you have specific questions about your situation and how these new rules apply to you, you may wish to speak with one of our Benefits Advisors by calling 1.866.444.3272. You should also check the COBRA Premium Reduction FAQs Q20: Can I receive COBRA benefits while on FMLA leave? Further information on FMLA is available from the nearest office of the Wage and Hour Division, listed in most telephone directories under U.S. Government, U.S. Department of Labor, Employment Standards Administration. Q21: What changes did the Trade Act of 2002 and the TAA Health Coverage Improvement Act of 2009 make with regard to COBRA continuation coverage? If you have questions about these provisions, you may call the Health Coverage Tax Credit Customer Contact Center toll-free at 1.866.628.4282. TTD/TTY callers may call toll-free at 1.866.626.4282. More information about the Trade Act is also available. Q22: What is the Federal Government's role in COBRA? The Labor Department's interpretive and regulatory responsibility is limited to the disclosure and notification requirements of COBRA. If you need further information on your disclosure or notification rights under a private-sector plan, or about ERISA generally, telephone EBSA's Toll-Free number at: 1.866.444.3272. The Internal Revenue Service, Department of the Treasury, has issued regulations on COBRA provisions relating to eligibility, coverage and premiums in 26 CFR Part 54, Continuation Coverage Requirements Applicable to Group Health Plans. Both the Departments of Labor and Treasury share jurisdiction for enforcement of these provisions. The Center for Medicare and Medicaid Services offers information about COBRA provisions for public-sector employees. You can write them at this address:
ARRA added additional responsibilities for each of the Federal agencies. For more information visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor. Q23: I am a federal employee. Can I receive benefits under COBRA? Q24: Am I eligible for COBRA if my company closed or went bankrupt and there is no health plan? Q25: How do I find out about COBRA coverage and how do I elect to take it? When you are no longer eligible for health coverage, your employer has to provide you with a specific notice regarding your rights to COBRA continuation benefits. Employers must notify their plan administrators within 30 days after an employee's termination or after a reduction in hours that causes an employee to lose health benefits. The plan administrator must provide notice to individual employees of their right to elect COBRA coverage within 14 days after the administrator has received notice from the employer. You must respond to this notice and elect COBRA coverage by the 60th day after the written notice is sent or the day health care coverage ceased, whichever is later. Otherwise, you will lose all rights to COBRA benefits. Spouses and dependent children covered under your health plan have an independent right to elect COBRA coverage upon your termination or reduction in hours. If, for instance, you have a family member with an illness at the time you are laid off, that person alone can elect coverage. Note: Under ARRA, plans have additional notice requirements. If your qualifying event occurred on or after September 1, 2008 through December 31, 2009, you may receive one of these notices and be eligible for temporary reduced premiums for up to 9 months (some individuals will also be eligible for an additional election opportunity). For more information visit the COBRA Premium Reduction FAQs or call 1.866.444.3272 to speak to a Benefits Advisor. |
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