Federal law – the Consolidated Onmibus Budget Reconciliation Act (COBRA) – gives you (the employee) and your covered dependents the right to be offered an opportunity to make self-payments for continued health care coverage if coverage is lost for certain reasons. This continued coverage is called “continuation coverage” or “COBRA coverage.” The following is a brief outline of the rules governing COBRA coverage. If you have any questions about COBRA, call the Fund Office.
Maximum Coverage Periods
- 18-month Maximum Coverage Period
You and/or your eligible dependents are entitled to elect COBRA coverage and to make self-payments for the coverage for a maximum period of up to 18 months after coverage would otherwise terminate due to one of the following events (called “qualifying events”):
- A reduction in your hours.
- Termination of your employment.
- 11-month extension rule – If you or a covered dependent are disabled (as defined by Social Security for the purpose of Social Security disability payments) on the date of one of the qualifying events listed above, or if you or a covered dependent become so disabled within 60 days after an 18-month COBRA coverage period starts, the maximum coverage period will be 29 months for all COBRA-eligible family members. The COBRA self-payment for the extra 11 months of coverage for the family may be increased. You or the disabled dependent must notify the Fund Office within 60 days of such a disability determination by Social Security and before the end of the initial 18-month period and also within 30 days of the date Social Security determines that you or the dependent are no longer disabled. (This 11-month extension rule does not apply to dependents during a 36-month maximum coverage period explained below.)
- Employee Medicare Entitlement – If you become entitled to Medicare while you are an active employee and then later coverage for yourself and your dependents would terminate due to termination of your employment or a reduction in hours, your dependents will be entitled to COBRA coverage for up to 36 months measured from the date of your Medicare entitlement, or 18 months measured from the date their coverage would otherwise terminate due to termination of your employment or a reduction in hours, whichever period is longer. Please advise the Fund Office if you become entitled to Medicare.
- COBRA Coverage During Military Service – If you or a covered dependent are in the military reserve and are called up to active duty for at least 30 days, the call-up is considered a qualifying event under COBRA. You or the dependent are entitled to elect COBRA coverage, regardless of any coverage provided by the military or government. This Plan will pay primary benefits before the military/government pays, except for service-related disabilities.
- 36-month Maximum Coverage Period
Your dependents (spouse or children) are entitled to elect COBRA coverage and to make self-payments for the coverage for up to 36 months after coverage would otherwise terminate due to one of the following events (called “qualifying events”):
- Your divorce or legal separation from your spouse.
- Your Medicare entitlement
- A dependent child’s loss of dependent status.
- Your death.
Multiple Qualifying Events
If your dependents are covered under COBRA coverage under and 18-month maximum coverage period due to termination of your employment or a reduction in your hours and then a second qualifying event occurs, their COBRA coverage may be extended as follow:
- If you die, or if you are divorced or legally separated, or if a child loses dependent status while your dependents are covered under an 18-month COBRA coverage period, your spouse or the child are entitled to COBRA coverage for up to a maximum of 36 months minus the number of months of COBRA coverage already received under the 18-month continuation.
- Only a person (spouse or child) who was your dependent on the day before the occurence of the first qualifying event (termination of your employment or a reduction in your hours) is entitled to make an election for this extended coverage when a second qualifying event occurs except as follows: if you (the employee) have a child or adopt a child during the first 18-month continuation period, that child will have the same election rights when a second qualifying event occurs as those of a person who was your dependent on the day before the first qualifying event.
- It is the affected dependent’s responsibility to notify the Fund Office within 60 days after a second qualifying event occurs. If the Fund Office is not notified within 60 days, the dependent will lose the right to extend COBRA coverage beyond the original 18-month period.
COBRA Notification Responsibilities
- You, your spouse, or the child, as applicable, must provide written notification to the Fund Office if you get divorced or legally separated or if a child loses dependent status.
- The Fund Office must be notified within 60 days of the date of the divorce, legal separation, or loss of dependent status or within 60 days of the date coverage for the affected person(s) would terminate, whichever date is later.
- As a precaution, you should also notify the Fund Office when any type of qualifying event occurs.
- In order to protect your family’s rights, you should keep the Fund Office informed of any changes in the addresses of family members. You should also keep a copy, for your records, of any notices you send to the Fund Office or that the Fund Office sends to you.
Benefits Under COBRA Coverage
You and/or your dependents will be given the opportunity to elect to make self-payments for the same medical, prescription drug, dental and vision benefits that you and/or your dependents were eligible for on the day before the qualifying event. A person (you or a dependent) electing COBRA coverage can elect to make self-payments for one of the following options:
- Medical and prescription drug benefits only; or
- Medical and prescription drug benefits plus vision and dental benefits.
Dependent Death and AD&D Benefits and employee Life Insurance, AD&D Insurance, and Weekly Disability Benefits are not provided under COBRA coverage.
Electing COBRA Coverage
- When the Fund Office is notified of a qualifying event, you and/or your dependents will receive a notice with information about signing up and paying for COBRA coverage.
- The person electing COBRA coverage has 60 days after he is provided with the COBRA materials or 60 days after his coverage would terminate, whichever is later, to return the completed election form. An election of COBRA coverage is considered to be made on the date the election form is mailed (postmarked) or personally delivered to the Fund Office. If the election form is not returned to the Fund Office within the allowable time period, you and/or your dependents will not be entitled to elect COBRA coverage.
Making COBRA Self-Payments
- The amount of the monthly COBRA self-payment is determined by the Trustees based on federal regulations and is stated on the election form. The amount is subject to change, but not more often than once a year unless there is a substantial change in benefits. If the amount is changed while you are making self-payments, you must pay the new amount starting with your next self-payment.
- A person has 45 days after the date of the election to make the initial (first) COBRA self-payment for coverage provided between the date coverage would have terminated and the date of the payment. (If you wait 45 days to make the initial payment, the second monthly payment may also fall due within that period and must also be paid at that time.)
- The due date for each following monthly COBRA self-payment is the first day of the month for which coverage is desired. A monthly self-payment will be considered on time if it is mailed or personally delivered within 30 days of the due date.
Additional COBRA Coverage Rules
- COBRA coverage may not be elected by anyone who was not covered under the Plan on the day before the occurrence of a qualifying event except as follows: if you have a child or adopt a child after you become covered under an 18-month COBRA period and later a second qualifying event occurs, the child will have the same election rights as any of your other dependents who were covered on the day before the first qualifying event.
- Each member of your family who would lose coverage due to a qualifying event is entitled to make a separate election of COBRA coverage. If you elect COBRA coverage for yourself and your dependents, your election is binding on your dependents.
- If coverage is going to terminate due to your termination of employment or reduction in hours and you don’t elect COBRA coverage for your dependents when they are entitled to the coverage, your dependent spouse has the right to elect COBRA coverage for up to 18 months for herself and any children within the time period in which you could have elected COBRA coverage.
- You don’t have to show proof that you and/or your dependents are insurable in order to be entitled to COBRA coverage.
Termination of COBRA Coverage
COBRA coverage for a covered person will usually terminate at the end of the last month of the applicable Maximum Coverage Period to which the person was entitled and for which correct and on-time payments were made. However, COBRA coverage for a covered person will terminate before the end of the applicable Maximum Coverage Period when the first of the following events occurs:
- A correct and on-time payment is not made to the Fund with respect to coverage for the covered person.
- After electing COBRA coverage, the person becomes entitled to Medicare benefits.
- The Fund no longer provides group health coverage to any employees.
- The person was receiving extended coverage for up to 29 months due to his or another family member’s disability, and Social Security has determined that he or the other family member is no longer disabled.
- After electing COBRA coverage, the person becomes covered under another group health plan as an employee or otherwise. Exception: This termination rule will not apply if the person has a preexisting medical condition that would cause benefits to be excluded or limited under the other plan.