W E L F A R E
Continuation of Coverage — COBRA
Under federal law, there are situations when you and your enrolled dependents may choose to continue healthcare coverage when your coverage would otherwise end. Continuation coverage is provided through the Consolidated Omnibus Budget Reconciliation Act, called COBRA.
Qualifying Events
Under COBRA, you and your enrolled dependents may choose to continue coverage that would otherwise end because:
- your hours of employment are reduced
- your employment is terminated for reasons other than gross misconduct
- you did not return to work after an unpaid leave under the Family and Medical Leave Act or you terminate employment during the leave
- your required contributions increase as a result of a reduction in hours of employment, even if coverage does not end.
The events listed above that make you eligible to choose continuation coverage are called “qualifying events.” This coverage may be continued for up to 18 months. If you choose to continue coverage, you must pay 102% of the full cost of coverage.
If the Social Security Administration determines that you or your dependent is disabled at the time of your termination or reduction in hours of employment, or at any time during the first 60 days of continuation coverage, the disabled individual and all family members with continuation coverage arising from the same qualifying event may be eligible for an additional 11 months of coverage (29 months total). If a child is born to or placed for adoption with you while you are continuing coverage and the child is determined to be disabled within the first 60 days of COBRA coverage, the child and all family members with continuation coverage arising from the same qualifying event may be eligible for a total of up to 29 months of continuation coverage. You must pay the required cost of the continued coverage. The cost of coverage during the 11-month disability extension may be up to 150% of the full cost of coverage. To receive the disability extension, you or a family member must notify the Welfare Fund Office within 60 days of the determination from the Social Security Administration and within the initial 18 months of COBRA coverage.
If You Die, Divorce or Become Covered by Medicare
Under COBRA, your spouse and children may have up to 36 months (three years) of COBRA continuation coverage if their healthcare coverage ends because:
- you die
- you and your spouse are divorced or legally separated
- you become covered by Medicare.
Note that, if you become covered by Medicare before a reduction in hours or employment termination, coverage for your covered dependents may be continued for up to 18 months from the termination of employment or reduction in hours, or for up to 36 months from the date you became covered by Medicare, whichever is longer.
If Your Children No Longer Qualify as Dependents
If your dependent child’s medical coverage ends because he or she no longer qualifies as an eligible dependent under the plan, that child can choose continuation coverage and keep it for up to 36 months.
If You Have or Adopt a Child
A child born to or placed for adoption with an employee while the employee is enrolled in continuation coverage may be immediately added to continuation coverage. You must notify the Welfare Fund Office of the birth or adoption and elect coverage for your child within the plan’s otherwise applicable enrollment period for newborns or adopted children.
Action Needed
When divorce, legal separation or loss of dependent status occurs, you, your spouse or your enrolled dependent must notify the Welfare Fund Office within 60 days of the event or the date coverage ends, whichever is later. You also must notify the Welfare Fund Office if you become eligible for coverage under Medicare.
If you fail to notify within the 60-day time limit, you or your dependent will not be eligible for continuation coverage.
When you notify the Welfare Fund Office, you also must include a current mailing address so the Welfare Fund Office can send the eligible person a COBRA enrollment form and cost information. Each eligible covered person can make an independent election regarding COBRA coverage. The eligible person must elect coverage by completing the form, and returning it to the Welfare Fund Office within 60 days after these two events:
- the date coverage would be lost because of one of the events described here, or
- the date of the notice you receive from the company, whichever comes later.
If the person does not elect coverage by returning the form within this 60-day period, coverage will end as of the date of the event that terminated coverage.
For other events that may entitle you to COBRA continuation coverage, the Welfare Fund Office will notify you of your rights and the actions you must take to elect coverage.
Rights to Same Coverage, Changes in Coverage
If an eligible person chooses COBRA continuation coverage, the coverage available will be identical to that provided to comparably situated employees or family members. You do not have to show evidence of insurability to elect continuation coverage. You will have the same opportunity to change coverage as active employees. Also, if the coverage provided to similarly situated employees changes, the coverage provided to anyone with COBRA continuation coverage will also change in the same manner. Your COBRA rights are provided as required by law. If the law changes your rights will change accordingly.
When COBRA Coverage Ends
An eligible person’s COBRA continuation coverage will end if:
- The person later becomes covered under another group health plan. If the new group health plan excludes benefits because of a pre-existing condition, the person may continue COBRA coverage through the end of the COBRA eligibility period.
- The person first becomes covered by Medicare after the date on which COBRA is elected.
- The person is extending 18-month coverage because of disability, and the person is no longer disabled as defined by the Social Security Act. In this case, coverage for any family members who have continuation coverage based on the same disability will also end. You must notify the Welfare Fund Office within 30 days of the determination that the person is no longer disabled.
- the Joint Board of Trustees stops providing healthcare coverage for employees.
- The 18-, 29-, or 36-month COBRA period ends.
- The person fails to make required contributions.
Initial Payment
You have 45 days from the date you elect continuation coverage to pay the premiums due for all months since your coverage ended. Payment is considered made on the date on which it is postmarked.
Monthly Payment for Ongoing Continuation Coverage
After your initial payment, your payments are due on the first day of each month for that month’s coverage. You have a 30-day grace period for premium payments.
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