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FAQ on COBRA

Q: After my benefit coverage terminates, is there other coverage available?
A: You may be entitled to COBRA coverage, a federal program that extends your coverage on the plan for certain time periods.
Q: How does COBRA extend my coverage?
A: Each qualified beneficiary who loses coverage as a result of the qualifying event, must be offered an opportunity to elect to receive the group health plan coverage that was provided on the day before the qualifying event.
Q: Who is a qualified beneficiary?
A: Any individual who, on the day before the qualifying event, is covered under a group health plan by virtue of being on that day either a covered employee, the spouse of a covered employee, or the dependent child of a covered employee. Each one of the above types of individuals is a qualified beneficiary, independent of the others, and each qualified beneficiary has an independent right to COBRA coverage. In general, an individual who is not covered under a plan on the day before the qualifying event cannot be a qualified beneficiary with respect to that qualifying event. The exception is for children born or placed for adoption with a covered person during the period of COBRA continuation coverage. They are qualified beneficiaries
Q: I am a qualified beneficiary because I had coverage under my employer’s plan and lost coverage due to a reduction in my hours worked. My COBRA coverage started three months ago and I am getting married and want to add my new spouse to my COBRA coverage. Can I do this?
A: Yes, your new spouse can be covered under your COBRA coverage upon your marriage. Your spouse will not be considered a qualified beneficiary (because the spouse was not on the plan at the time of the qualifying event) and if you die, your spouse will not have COBRA continuation rights. If you have a newborn or adopt a child during your COBRA coverage period, they can also be added to the coverage immediately, after enrollment and they would be a qualified beneficiary.
Q: I am a qualified beneficiary because I had coverage under my employer’s plan and lost coverage due to a reduction in my hours worked. My COBRA coverage started three months ago, but even though my wife was covered on the plan at the time of the qualifying event, my wife and I decided that she would not be covered under COBRA coverage and we did not elect COBRA coverage for my wife. Can I add her to the plan at this time?
A: If your wife did not have coverage on another plan when the waiver of COBRA coverage was made, you can add your spouse to the Plan only during the open enrollment period. The spouse will not be considered a qualified beneficiary (because she waived COBRA at the time of the qualifying event) and if you die, your spouse will not have COBRA continuation rights.

If your wife did have coverage on another plan when COBRA was waived, and lost the other coverage through no fault of her own, she has special enrollment rights and can be covered immediately under your COBRA continuation coverage. Other eligible dependents would have the same special enrollment right if they lost their other plan coverage through no fault of their own. They would not be a qualified beneficiary.

Q: What is a qualifying event?
A: A qualifying event is one of the following events, if the event causes the employee, spouse, or dependent to lose coverage under the plan:
  • The death of a covered employee
  • The termination (other than by reason of employee's gross misconduct) or reduction of hours, of a covered employee's employment to below the required number of hours
  • The divorce or legal separation of a covered employee from the employee's spouse
  • A covered employee becoming entitled to Medicare benefits
  • A dependent child ceasing to be a dependent child of a covered employee under the applicable dependent requirements of the Plan
  • A proceeding in bankruptcy with respect to an employer from whose employment a covered employee retired at any time.
Q: Does it matter if the termination of employment was voluntary or involuntary?
A: Apart from facts constituting gross misconduct, it does not matter if your qualifying event was voluntary or involuntary.
Q: What will my coverage be under COBRA continuation coverage?
A: Your coverage will be the same coverage as those who have the plan and are not on COBRA continuation coverage. If you had accumulated dollars toward you deductible or other annual or lifetime accumulators while you were on the plan before your COBRA coverage begin, you will gain credit for those after your COBRA coverage begins. If the coverage for those on the plan who are not on COBRA changes (improves or reduces) your coverage will change as their coverage changes.
Q: What if I do not like the coverage I had before electing COBRA. Can I change my coverage under COBRA?
A: In general, a qualified beneficiary need only be given an opportunity to continue the benefits they had immediately before the qualifying event. This is true even if the coverage ceases to be of the same value to the qualified beneficiary, for example if they move out of the geographic of the network and have only out-of-network benefits. The qualified beneficiary may request that the employer make available to them an opportunity to elect alternative coverage (or networks) if the employer makes such alternatives available to others on the plan or if such offerings could be extended to the area serving the qualified beneficiary. The employer should provide such services, if available, within a reasonable time after the request.

If there is an open enrollment period, each qualified beneficiary on COBRA has the same open enrollment rights as active employees on the Plan and may make the same type changes that active employees may make.

Q: How do I know when a qualifying event has occurred?
A: In general, the employer or plan administrator must determine when a qualifying event has occurred and will notify you of such.

However, each covered employee or qualified beneficiary is responsible for notifying the plan administrator of the occurrence of a qualifying event that is either a child’s ceasing to be a dependent (under plan requirements), a divorce or legal separation.

The plan is not required to offer the qualified beneficiary an opportunity to elect COBRA coverage if this notification is not provided to the plan administrator within 60 days of the later of,

1. the date of the qualifying event or, 2. the date the qualified beneficiary would lose coverage as a result of the qualifying event.

Q: How do I elect COBRA?
A: The plan will notify you of your COBRA rights and you have a maximum 60 days from the later of the date of the notice or from the date you lose coverage to make your election decision. The decision should be sent to the plan in writing on the forms provided by the plan. If you elect COBRA coverage during the 60 day time period, COBRA coverage will be from the date you lost your coverage, even if you decide up to 60 days after the date you lost the coverage. During the period of your decision, coverage will be terminated until after your election is processed and your payment for the first month is received. If you elect COBRA coverage, you will reinstated, retroactively to the date you lost coverage.

However, the COBRA coverage starting date is different if you first waive COBRA coverage and later decide to enroll for COBRA coverage within the 60 day time period. The starting date of coverage for the waiver situation is described in thefollowing question and answer.

Q: Can I waive coverage for COBRA during the 60 day period and change my decision and elect COBRA if it is still within the 60 day time period?
A: Yes, you can revoke the waiver at any time during the 60 day election time period. However, your coverage will not be reinstated back to the date you lost coverage on the plan. COBRA coverage will begin the day you revoke your previous waiver of COBRA coverage.
Q: I have several family members who are qualified beneficiaries. Can we make independent decisions?
A: Yes. Each qualified beneficiary must be offered the opportunity to make an independent election to receive COBRA coverage. If the election made does not specify a different election for any of all of the qualified beneficiaries from the coverage on the day before the qualifying event, the election for COBRA coverage will be deemed to be as the coverage existed before the qualifying event.
Q: How much will COBRA cost me?
A: The notification you receive from the plan lists the premium cost to purchase COBRA coverage. The premium cost is based upon the type of coverage elected by you and your family members (i.e. single, family, other) and is based upon the premium for the coverage elected. The plan can also add to the premium based upon the reason you are on COBRA. For example, if you are in the normal COBRA time period of 18 months, 2% may be added to the premium. If you or a family member are disabled and covered on COBRA during the 19th through 29th month, 50% may be added to the premium. The premium is paid monthly.
Q: When is my COBRA premium due?
A: The first premium is due no later than 45 days after the date of your COBRA coverage election. Each subsequent premium is due no later than 30 days after the first day of the month for which you are paying for coverage. The total amount due should be paid; however, if a timely payment is made and is an amount deemed to be not significantly less than the plan requires, the plan will continue coverage. The plan will notify the qualified beneficiary that the payment was deficient and request the deficient amount within 30 days of notifying the qualified beneficiary of the deficiency. If the deficiency is not paid within thirty days, coverage will be terminated. An amount is not significant if, (1) it is less than $50 dollars, or, (2) it is less than 10% or the amount required.
Q: Will I receive a bill for COBRA premiums due?
A: A letter will be sent explaining the amount due for the payments and when the payments are due. There will be no bill sent for subsequent premium payments and COBRA coverage will be terminated if payments are not received within the grace period.
Q: Explain the maximum time periods for COBRA coverage.
A: Most people will be covered under COBRA coverage for a maximum of 18 months as a result of termination of employment or reduction in hours worked. If there is a disability extension, the COBRA coverage maximum is 29 months. If the covered employee becomes entitled to Medicare before experiencing a COBRA qualifying event, the maximum COBRA coverage period for qualified beneficiaries other than the covered employee is the later of, 1. 36 months after the date of Medicare entitlement or, 2. 18 months (29 for disability) after the covered employee’s termination of employment or reduction in hours worked. If the qualifying event was a result of divorce, legal separation, death of an employee or a dependent ceasing to meet the definition of a dependent, COBRA coverage is for a maximum of 36 months.
Q: I am an employee covered by a group health plan and my spouse was just deemed disabled as defined by COBRA regulations. I have to reduce my hours to below the minimum for coverage and want to enroll for COBRA coverage. How long can I enroll and how much will it cost me?
A: Because a family member is disabled, as defined by COBRA regulations, you and your spouse and any dependents can enroll for 29 months of COBRA coverage. If the entire family enrolls, including your spouse, the cost will be 102% of the premium for the first eighteen months of coverage and 150% of the premium for months 19 through 29. If only you and other family members, but not your spouse enroll, you may still have 29 months of COBRA coverage, but the cost will only be 102% of the premium for the entire 29 months, because your spouse (the disabled individual) did not enroll.
Q: How does a qualified beneficiary become entitled to a disability extension?
A: Disability is determined under Title II or XVI of the Social Security Act and is satisfied if you become continuously disabled before the first day of COBRA coverage or at any time during the first 60 days of COBRA coverage. You must notify the plan within 60 days of receiving the determination that you are disabled and before the end of your original 18 month COBRA coverage period. The disability entitles each and every qualified beneficiary in your family, independently, and for those disabled or not, to a maximum of 29 months of COBRA continuation coverage. The disability can be on an employee, spouse or dependent.
Q: Can COBRA coverage periods be expanded beyond 18 or 29 months periods?
A: A second qualifying event can occur within the COBRA coverage period that gives rise to a 36 month coverage period. For example, in the event of a divorce or death, that occurs after a termination or a reduction in hours, the COBRA coverage time period will be extended to a maximum of 36 months from the original 18 months. The extension applies only to those who were and remain qualified beneficiaries from the original qualifying event.
Q: What events can shorten my maximum COBRA coverage period?
A: The following events will end your COBRA coverage:
  1. The day the maximum time period, as described earlier, expires;
  2. The date for which timely payment for the COBRA premium is not made to the plan;
  3. The date upon which the employer ceases to provide any group health plan;
  4. The date, after the date of the election, upon which any qualified beneficiary first becomes covered under any other group health plan;
  5. The date, after the date of the election, upon which any qualified beneficiary first becomes entitled for Medicare benefits;
  6. In the case of a qualified beneficiary on disability extension, the earlier of 29 months after the qualifying event or the first of the month after it is determined that the disability no longer exists; and,
  7. When there is cause, the same as in the plan for active participants, such as the submission of a fraudulent claim.
Q: If I have COBRA coverage, and enroll for coverage in another plan, when will my COBRA coverage terminate?
A: If a qualified beneficiary first becomes covered under another group health plan after the date on which COBRA coverage was elected, the COBRA coverage is terminated immediately. This is true even if the new coverage is not as valuable in benefits as the COBRA coverage. However, the person must be actually covered, and not just eligible for coverage, for COBRA termination to occur. Also, the other group health plan must not have a pre-existing limitation clause that limits the coverage of the qualified beneficiary, for COBRA coverage to be terminated.

However, if a qualified beneficiary was covered under another group health plan before the date on which COBRA coverage was elected, the other coverage cannot be the basis for terminating COBRA coverage.

Q: If I have COBRA coverage, how does entitlement for Medicare impact my coverage?
A: If a qualified beneficiary first becomes entitled to Medicare after the date on which COBRA coverage was elected, the COBRA coverage may be terminated immediately. A qualified beneficiary becomes entitled to Medicare upon the effective date of enrollment in either Part A or Part B, whichever comes earlier. Merely being eligible to enroll in Medicare does not constitute being entitled to Medicare. However, if a qualified beneficiary was entitled to Medicare on or before the date on which COBRA coverage was elected, Medicare entitlement cannot be the basis for terminating COBRA coverage.
Q: I am on Family Medical Leave and will not return to work. How is my COBRA coverage impacted?
A: The taking of leave under FMLA does not constitute a qualifying event. A qualifying event would occur if the employee does not return to work after FMLA and the employee loses coverage. The maximum coverage period for COBRA is measured from the date of the qualifying event.
Q: While on FMLA, I did not pay for the last three weeks of premium. Does this impact my COBRA coverage?
A: No. Your COBRA coverage start date is not impacted by any lapse of coverage under FMLA. The qualifying event remains the last date of FMLA.
Q: Can I select COBRA over my new employer's plan?
A: Yes. Once COBRA is selected,the you must exhaust the COBRA coverage to be enrolled in the new employer's health plan as a special enrollee. If you drop COBRA coverage before the COBRA time period expires, you will not ba a special enrollee and will be considered a late enrollee. You may have to wait until the open enrollment period, if your plan has one, and may have 18 months of pre-existing condition limitations.
COBRA Forms
COBRA law requires that each COBRA eligible Plan have procedures to administer the COBRA requirement. This section provides procedures and forms to allow clients and Plan Participants to have access to this information to help manage their COBRA needs.

Initial Notice of COBRA Rights
COBRA Denial Notice
Notice of COBRA Qualifying Event
Notice of Second Qualifying
Event Notice of COBRA Disqualification Event
Notice of Disability


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