COBRA Notification
Continuation Rights Under COBRA
Introduction
Below is the Group Health Continuation under COBRA - notice. The purpose of this notice is to acquaint you with the COBRA law, your notification obligations and your rights to COBRA coverage. This notice is provided to all employee’s who have lost their group benefits and must be delivered by first class mail or included in the Summary Plan Description (SPD) for the employer’s group health plan. If there is a covered dependent whose legal residence is not yours, please provide written notification to WGAT so a notice can be sent to them as well. Should you add additional dependents in the future, notice to the covered employee and spouse at this time will be deemed notification to the newly covered dependent. A single notice is being provided to all plan participants at this time, since based upon the information provided to your employer, all plan participants reside at the same location. If there is a covered dependent whose legal residence is not yours, please provide written notification to the benefits department. However, continuation coverage rights apply to individually to a covered spouse and/or covered dependent children.
To provide options for individuals who lose health coverage from an employer-sponsored insurance plan, Federal Government enacted the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272, Title X), commonly known as “COBRA.” The following will explain your rights under the law and what should be done by you or your qualified beneficiary (any covered dependent) who experiences a COBRA “qualifying event.”
I. Length of Continuation Coverage - 18 Months
If the event causing the loss of coverage is a termination of employment (other than for reasons of gross misconduct), or reduction of work hours, then for each qualified beneficiary will have the opportunity to continue coverage for a maximum period of 18 months. Each individual listed above is a “qualified beneficiary” and has independent election rights to continuation coverage. For example, a spouse could elect continuation coverage even if the covered employee does not elect to continue coverage. Or a parent could elect to continue coverage on behalf of their dependent child who is losing coverage as a result of the qualifying event. Contribution rates, however, will be determined by the number of qualified beneficiaries electing to continue coverage. If elected, continuation coverage is available to qualified beneficiaries subject to their continued eligibility. Western Growers Assurance Trust reserves the right to verify eligibility and terminate continuation coverage back to the original continuation effective date, if it determined you are ineligible or coverage was obtained through a material misrepresentation of the facts. Exception: If you are participating in a health flexible spending account at the time of the qualifying event, you will only be allowed to continue the health flexible spending account until the end of the current plan year in which the qualifying event occurs.
Contribution Payments
If a qualified beneficiary elects to continue health benefits, a qualified beneficiary is responsible for the full (100%) applicable contribution payment for coverage selected, plus 2% administration charge. The applicable contribution includes both the employer and employee’s share of the total contribution. Monthly contribution amounts are fixed on a (calendar year) basis. If the applicable contribution amount is adjusted, you will be notified as soon as possible prior to the new contribution rates going into effect. Any person or entity can pay COBRA contribution for a qualified beneficiary, however, it is the qualified beneficiaries responsibility to insure that the payment is made on a timely basis. If a third party agrees to pay your continuation coverage contribution, you should call the third party each month to insure that a timely contribution has been made. All contributions are to be postmarked by the required due date (the end of the month). If not, coverage will terminate, and not be reinstated.
Initial Contributions
A qualified beneficiary has maximum 45 calendar days from that date of election (postmarked date) to pay the contribution. This contribution payment is for the retroactive coverage period from the date of the loss of coverage to the end of the current month. For example, if you lost your health benefits on January 31, and elected continuation coverage on March 1, you would have until April 16, to pay for the retroactive months of February, March and April.
This 45-day period is the maximum period in which to make contribution payments. You are responsible for making sure the amount of your payment is enough to cover this entire period. You may contact Western Growers Assurance Trust to confirm the correct amount of your first payment.
Monthly Contributions
Once your monthly contributions are paid, future monthly contributions are due on the first of each month for which they are intended for. You will have a maximum (30) days grace period following the due date in which to make these contributions payments. If applicable payment is not made within the grace period, then coverage will be canceled back to the end of the prior month that was paid. Once COBRA coverage is cancelled you will not be reinstated. No partial payments will be accepted for your monthly contribution/premiums. It is the qualified beneficiary’s responsibility to make these monthly payments, as you will not receive a monthly billing or warning notice. Failure to make a timely contribution by the 1st of the month they are intended for will result in suspension of certain medical and prescription benefits.
Benefits Verification
If a medical provider (hospital, Physician, Pharmacy, etc.) requests verification of benefits during this period, they will be told that you have elected COBRA coverage but have yet to pay the contribution and that no claims, including prescription drug charges, will be considered until the contribution is paid.
Employee/Qualified Beneficiary Notification Responsibilities
While the employer is responsible for certain qualifying events, under group health plan rules and COBRA law the employee, spouse, or other family member has the responsibility to notify WGAT of the divorce, legal separation, or a dependent child losing dependent status under the plan. For examples of complete descriptions on the plan eligibility rule regarding a spouse and/or children, please read your summary plan description provided to you when you were eligible for benefits. To protect your continuation coverage rights in these situations, written notification of a qualifying event must be made within 60 days from whichever date is later, that date of the event or the date on which health plan coverage would be lost under the terms of the Plan contract because of the event. You must provide this notice to WGAT. Procedures for making this proper notice are listed below.
· Mail a complete copy of the Final Judgment Divorce Decree, or Legal Separation
· For dependent children to be eligible under guardianship, the child must:
· Live with you full time
· Be financially supported continuously and primarily dependent upon you for at least 50% of their support.
· WGAT must approve in advance of any child dependent by guardian relationship
Bankruptcy Qualifying Event
In the case of the event that is the bankruptcy of the employer, to lose coverage means any substantial elimination of coverage under the plan, occurring within 12 months before or after the date the bankruptcy proceeding commences, for a covered employee who had retired on or before that of the substantial elimination of group health plan coverage, or for any spouse, surviving spouse or dependent child if they were covered on the day before the qualifying event.
· In the case of a qualifying event is the bankruptcy of the employer
· A covered employee who had retired on or before the date of substantial elimination of group health plan coverage is also a qualified beneficiary
· Any spouse or surviving spouse
· Dependent child of such a covered employee if, on the day before the bankruptcy qualifying event, the spouse, surviving spouse, or dependent child a beneficiary under the plan.
· A proceeding in bankruptcy under title 11 of the United States Code with respect to an employer from whose employment a covered employee retired at any time.
Consequences of Not Electing To Continue Your Group Health Insurance
In considering whether to elect continuation coverage, you should take into account that failure to continue your group health coverage will affect your future rights under federal law. First, you could lose the right to avoid having pre-existing condition exclusions applied to you by other group health plans if you have more than a 63-day gap in coverage, and election of continuation coverage may help you not have such a gap. Second, you will lose the guaranteed right to purchase individual health insurance policies that do impose such pre-existing condition exclusions if you do not maintain continuation coverage for the maximum time available to you. Finally, you should take into account that you have special enrollment rights under federal law. You have the right request special enrollment in another group health plan for which you are otherwise eligible (such as a plan sponsored by your spouse’s employer) within 30 days after your group health coverage ends. You will also have the same special enrollment right at the end of continuation coverage if you get continuation coverage for the maximum time available to you.
Electing Continuation Coverage
To elect your continuation coverage rights, you have a maximum of 60-days to decide if your wish to elect continuation coverage. Please follow the below listed election procedures.
· Step 1 – Sign and date COBRA election form.
· Step 2 – Make copy of the signed COBRA election form for your records.
· Step 3 – Mail the COBRA election form back to WGAT at the address listed on the election form. It is recommended you obtain proof from the Post Office you mailed your COBRA election form. Your election is deemed made on the date election form is sent to WGAT. If the election form is not postmarked by the due date, then rights to continue coverage will end. No late COBRA elections will be accepted.
· Step 4 – Call WGAT within 10 days to insure your election form has been received.
No Health Coverage During Election Period
Qualified beneficiaries will not be covered under the plan during the above election period. If a health claim is submitted during this time, it will not be paid. In addition, if a medical provider calls for verification of benefits, they will be told you currently do not have benefits, but upon election and payment of applicable contribution all valid claims will be released for payment.
No-Qualified Beneficiaries Elected
If a qualified beneficiary who is either the covered employee, spouse, and or covered dependents elects COBRA continuation coverage and the election form does not specify who the election is for only the covered employee will be enrolled for continuing medical benefits. The COBRA election form needs to be completely filled out according to your election preference.
Retroactive Reinstatement Of Health Coverage
If a qualified beneficiary elects to continue health coverage, it will not be re-activated until you elect and pay. If an election to continue coverage is made and applicable contributions are paid as detailed in this notice, then your health coverage will be retroactively reinstated back to your loss of coverage date and any valid pending claims will be released for payment. Keep in mind however it may take a period of time for the paper work to be processed by WGAT and the coverage to be re-activated. Should you receive medical services prior to reinstatement of your coverage, keep any medical payment receipts, and upon reinstatement, submit the claims for payment under the plan provisions.
II. Length of Continuation Coverage - 36 Months
COBRA law specifies four qualifying events that provide eligible qualified beneficiaries (dependent spouses or children) with 36 months of continuation coverage.
36 Months Qualifying Events:
· The death of a covered employee;
· The divorce or legal separation of a covered employee from the employee’s spouse;
· A covered employee becoming entitled to Medicare benefits under Title XVIII of the Social Security Act (42 U.S.C. 1395-139 5ggg);
· A dependent child’s ceasing to be a dependent child of a covered employee under the generally applicable requirements of the plan
If elected and paid for, each qualified beneficiary has the right to continue coverage for a maximum 36 months from date of qualifying event. This means continuation coverage will begin on the date after group coverage terminates. Exception: if you are were participating in a health flexible spending account at the time of the qualifying event, you will only be allowed to continue the health flexible spending account until the end of the current plan year in which the qualifying event occurs.
While the employer is deemed to know when and employee has died or when they have become entitled to Medicare, it is the qualified beneficiaries responsibility to inform WGAT when a divorce/legal separation has occurred or when a dependent has ceased to be a dependent.