[Date]
[Employee Name]
[Employee Address]
Dear Employee and
Covered Dependents:
This notice is
intended to summarize your rights and obligations under the group health
continuation coverage provision of COBRA.
You and your spouse should take the time to read this notice
carefully. Should you qualify for COBRA
coverage in the future, the group health plan administrator or plan sponsor
will send you the appropriate notification.
Federal law requires
[Name of Employer] to offer employees and their families the opportunity for a
temporary extension of health coverage (called "continuation
coverage") at group rates in certain instances where coverage under the
plan would otherwise end.
TO QUALIFY FOR
COBRA COVERAGE
Employees. As an employee of [Name of Employer] covered
by [Group Health Plan Name], you have the right to elect this continuation
coverage if you lose your group health coverage because of a reduction in your
hours of employment or the termination of your employment (for reasons other
than gross misconduct on your part).
Retirees. As a retiree, spouse of a retiree, or
dependent child of a retiree, of [Name of Employer] covered by [Group Health
Plan Name] you have the right to elect this continuation coverage. If you lose
your group health coverage because [Name of Employer] declares Chapter 11
bankruptcy and you lose your group health care coverage within one year before
or after the bankruptcy proceedings.
Spouses. As the spouse of an employee covered by
[Group Health Plan Name], you have the right to choose continuation coverage
for yourself if you lose group health coverage under [Group Health Plan Name]
for any of the following reasons:
·
The death of your
spouse who was an employee of [Name of Employer]
·
A termination of your
spouse's employment (for reasons other than gross misconduct)
·
A reduction in your
spouse's hours of employment
·
Divorce or legal
separation from your spouse
·
Your spouse becomes
entitled to Medicare
Dependent Children. In the case of a dependent child of an
employee covered by [Group Health Plan Name], he or she has the right to
continuation coverage if group health coverage under [Group Health Plan Name]
is lost for any of the following reasons:
·
The death of a parent
who was an employee of [Name of Employer]
·
The termination of a
parent's employment (for reasons other than gross misconduct) or reduction in a
parent's hours of employment with [Name of Employer]
·
Parent's divorce or
legal separation
·
A parent who was an
employee of [Name of Employer] becomes entitled to Medicare
·
The dependent ceases
to be a "dependent child" under [Group Health Plan Name].
YOUR NOTICE
OBLIGATIONS
Under the law, the
employee or a family member has 60 days from (1) the date of the event or (2)
the date on which coverage would be lost, whichever is later, to inform [Name
and Address of Plan Administrator] of the employee's divorce or legal
separation, or of the employee's child losing dependent status under [Group
Health Plan Name]. Please give notice
in the following manner: [specify if you want the person to call you, write to
you, etc.]
Failure to give
notice within the time limits can result in COBRA coverage being forfeited.
[Name of Employer]
has the responsibility to notify [Name of Plan Administrator] of the employee's
death, termination of employment, reduction in hours, or Medicare entitlement.
TO ELECT
COVERAGE
When [Name of Plan
Administrator] is notified that one of these events has happened, [Name of Plan
Administrator] will in turn notify the employee, spouse and dependents that
they have the right to choose COBRA continuation coverage. The employee and spouse have independent
election rights. The employee, spouse
and dependents have 60 days from either (1) the date coverage is lost under
[Group Health Plan Name] or (2) the date of the notice, whichever is later, to
respond informing [Name of Plan Administrator] that they want to elect
continuation coverage. There is no
extension of the election period.
If an employee,
spouse or dependent does not elect continuation coverage within this election
period, then rights to continue group health insurance will end.
If an employee,
spouse or dependent chooses continuation coverage and pays the applicable
premium, [Name of Employer] is required to provide coverage which, as of the time
coverage is being provided, is identical to the coverage provided under the
plan to similarly situated active employees or family members. If [Name of Employer] changes or ends group
health coverage for similarly situated active employees, your coverage will
also change or end.
DURATION OF
COBRA COVERAGE
Termination or Reduction in Hours. If group health
coverage was lost because of a termination of employment (other than for
reasons of gross misconduct) or a reduction in work hours, the continuation
coverage period is 18 months from the date of the qualifying event, if elected.
Employees, Spouses or Dependents with Disabilities. The 18 months of
continuation coverage can be extended to 29 months if the Social Security
Administration determines that the employee, spouse or dependent child was
disabled on the date of the qualifying event according to Title II (Old Age
Survivors and Disability Insurance) or XVI (Supplemental Security Income) of
the Social Security Act. Disabilities
that occur after the qualifying event do not meet the criteria for the extended
COBRA coverage period.
The employee, spouse
or dependent must obtain the disability determination from the Social Security
Administration and notify [Name of Plan Administrator] of the result within 60
days of the date of disability determination and before the close of the
initial 18-month period. The employee,
spouse or dependent has 30 days to notify [Name of Plan Administrator] from the
date of a final determination that he or she is no longer disabled.
Multiple Events. The 18-month continuation period can also be
extended, if during the 18 months of continuation coverage, a second event
takes place (divorce, legal separation, death, Medicare entitlement, or a
dependent child ceasing to be a dependent).
The 18 months of continuation coverage will be extended to 36 months
from the date of the original qualifying event. Upon the occurrence of a second event, it is the employee's,
spouse's or dependent's responsibility to notify [Name of Plan Administrator]
within 60 days of the event and within the original 18-month COBRA period. COBRA coverage does not last beyond 36
months from the original qualifying event, no matter how many events occur.
DURATION OF
COBRA COVERAGE
Other Qualifying Events.
If group health
coverage was lost because of the death of the employee, divorce, legal
separation, Medicare entitlement, or a dependent child ceasing to be a
dependent child under [Group Health Plan Name], then the continuation coverage period is 36 months from the date
of the qualifying event, if elected.
COBRA
CANCELLATION
The law provides that
continuation coverage may be cut short for any of the following reasons:
·
[Name of Employer] no
longer provides group health coverage to any of its employees
·
The premium for
continuation coverage is not paid in a timely manner
·
The employee, spouse
or dependent becomes covered under another group health plan that does not
contain any exclusion or limitation with respect to any preexisting condition
·
The employee or
spouse becomes entitled to Medicare
·
The employee, spouse
or dependent extended continuation coverage to 29 months due to a Social
Security disability and a final determination has been made that he or she is
no longer disabled
·
The employee, spouse
or dependent notifies [Name of Plan Administrator] that they wish to cancel
continuation coverage.
PREMIUMS
An employee, spouse
or dependent does not have to show that they are insurable in order to choose
continuation coverage. But an employee,
spouse or dependent must have been actually covered by the group health plan
the day before the qualifying event in order to elect COBRA coverage.
An employee, spouse
or dependent may have to pay all of the applicable premium, which generally can
not exceed 102% of the plan costs for a 12-month period. An exception exists for coverage of
employees with disabilities during the extension from the 19th month to the
29th month. During that time, 150% of
the plan cost may be charged. The group
health plan may increase the cost that must be paid for COBRA coverage if the
applicable premium increases.
The period for paying
the initial COBRA premium following the election of coverage is 45 days. The first payment made is to be applied
retroactively toward coverage for the period beginning after the date on which
coverage would have been lost as a result of the qualifying event.
There is a 30-day
grace period following the date regularly scheduled monthly premiums are
due. Only in the case of mental
incapacity is any further extension permitted, since the group health plan does
not permit extensions.
CONVERSION
PRIVILEGES
At the end of the
continuation coverage period, the employee, spouse or dependent must be allowed
the option to enroll in an individual conversion health plan provided under
[Group Health Plan Name] if such conversion plan is available.
FURTHER
INFORMATION
If you have any
questions about the law or your obligations, please contact [Name of Plan
Administrator, Address, and Telephone Number].