Federal law requires that most group health plans (including this Plan) give employees and their families the opportunity to continue their health care coverage when there is a "qualifying event" that would result in a loss of coverage under an employer's plan. Depending on the type of qualifying event, "qualified beneficiaries" can include the employee (or retired employee) covered under the group health plan, the covered employee's spouse, and the dependent children of the covered employee.
Continuation coverage is the same coverage that the Plan gives to other participants or beneficiaries under the Plan who are not receiving continuation coverage. Each qualified beneficiary who elects continuation coverage will have the same rights under the Plan as other participants or beneficiaries covered under the Plan, including open enrollment and special enrollment rights.
Am I eligible for the premium reduction?
If you lost group health coverage from September 1, 2008 through March 31, 2010 due to an involuntary termination of employment that occurred during that period and are not eligible for Medicare or other group health plan coverage, you are entitled to receive a premium reduction - see information under the ARRA act (link directly to that page). Information about the amount of the premium reduction and how it affects your premium payments can be also be found below under the question, “How much does COBRA continuation coverage cost ?”
How long will continuation coverage last?
In the case of a loss of coverage, due to end of employment or reduction in hours of employment, coverage generally may be continued only for up to 18 months from the date of your involuntary termination of employment. In the case of losses of coverage due to an employee’s death, divorce or legal separation, the employee’s becoming entitled to Medicare benefits or a dependent child ceasing to be a dependent under the terms of the plan, coverage may be continued for up to a total of 36 months. When the qualifying event is the end of employment or reduction of the employee's hours of employment, and the employee became entitled to Medicare benefits less than 18 months before the qualifying event, COBRA continuation coverage for qualified beneficiaries other than the employee lasts until 36 months after the date of Medicare entitlement. This notice shows the maximum period of continuation coverage available to the qualified beneficiaries. The duration of the premium reduction is determined separately and may not last for the entire length of your COBRA coverage. See the question below entitled “How much does COBRA continuation coverage cost?”
Continuation coverage will be terminated before the end of the maximum period if:
- any required premium is not paid in full on time,
- a qualified beneficiary becomes covered, after electing continuation coverage, under another group health plan that does not impose any pre-existing condition exclusion for a pre-existing condition of the qualified beneficiary,
- a qualified beneficiary becomes entitled to Medicare benefits (under Part A, Part B, or both) after electing continuation coverage, or
- the employer ceases to provide any group health plan for its employees.
Continuation coverage may also be terminated for any reason the Plan would terminate coverage of a participant or beneficiary not receiving continuation coverage (such as fraud).
How can you extend the length of COBRA continuation coverage?
If you elect continuation coverage, an extension of the maximum period of coverage may be available if a qualified beneficiary is disabled or a second qualifying event occurs. You must notify the Equity-League Health Plan of a disability or a second qualifying event in order to extend the period of continuation coverage. Failure to provide notice of a disability or second qualifying event may affect the right to extend the period of continuation coverage.
Disability
An 11-month extension of coverage may be available if any of the qualified beneficiaries is determined under the Social Security Act (SSA) to be disabled. The disability has to have started at some time on or before the 60th day of COBRA continuation coverage and must last at least until the end of the 18-month period of continuation coverage.
Notice of a Social Security disability determination must be provided to the Fund Office in writing. The notice must include the covered employee’s name, the qualified beneficiary’s(ies’) name(s), the name of the person who has been determined to be disabled by the Social Security Administration and the date of the determination. In addition, you must submit to the Fund Office a copy of the Social Security determination.
The notice must be sent to the Fund Office within 60 days of the latest of: (i) the date of the disability determination by the Social Security Administration; (ii) the date of the initial qualifying event; or (iii) the date of the loss of coverage due to the initial qualifying event, and notice must be provided before the end of the initial 18-month COBRA continuation period.
Each qualified beneficiary who has elected continuation coverage will be entitled to the 11-month disability extension if one of them qualifies. If the qualified beneficiary is determined by SSA to no longer be disabled, you must notify the Plan of that fact within 30 days after SSA’s determination.
Second Qualifying Event
An 18-month extension of coverage will be available to spouses and dependent children who elect continuation coverage if a second qualifying event occurs during the first 18 months of continuation coverage. The maximum amount of continuation coverage available when a second qualifying event occurs is 36 months. Such second qualifying events may include the death of a covered employee, divorce or legal separation from the covered employee, the covered employee’s becoming entitled to Medicare benefits (under Part A, Part B, or both), or a dependent child’s ceasing to be eligible for coverage as a dependent under the Plan. These events can be a second qualifying event only if they would have caused the qualified beneficiary to lose coverage under the Plan if the first qualifying event had not occurred.
You must notify the Plan in writing within 60 days after a second qualifying event occurs if you want to extend your continuation coverage. The notice must include the covered employee’s name, the type of second qualifying event, the date on which the event occurred, and the name(s) of the qualified beneficiary(ies) whose coverage may be extended due to the second qualifying event. In addition, you must include with the notice a copy of the employee’s death certificate, divorce decree, proof of legal separation, or a copy of the child’s birth certificate or other appropriate proof, as applicable depending on the event.
Eligible dependents under the Plan include unmarried dependent children who are full time students at a postsecondary institution (i.e. college, university, or other accredited and state licensed technical school with a minimum of two years of required instruction). Effective January 1, 2010, if a dependent child is on a medically necessary leave of absence, coverage may be continued under the Plan for up to one year. A dependent child who is covered under the Plan as a full-time student, who would otherwise lose health coverage under this section because he or she takes a medically necessary leave of absence that would cause the loss of student status, may be entitled to up to a one year extension of coverage due to the medically necessary leave of absence. In order to be eligible for this extension, the Plan must be provided with a written certification from the child’s treating physician that (1) the child is suffering from a serious illness or injury; and (2) the leave of absence from the postsecondary institution is medically necessary. Coverage may continue for up to one year from the first day of the medically necessary leave unless the dependent child would otherwise lose coverage (e.g. because he or she reaches age 25). Any required payments for dependent coverage would need to be made during the one-year extension. If you have any questions about the information contained in this notice, please contact the Fund Office at (212) 869-9380 or toll free at (800) 344-5220.
How Can You Elect Continuation Coverage?
To elect continuation coverage, you must complete the Election Form and furnish it according to the directions on the form. Each qualified beneficiary has a separate right to elect continuation coverage. For example, the employee's spouse may elect continuation coverage even if the employee does not. Continuation coverage may be elected for only one, several, or for all dependent children who are qualified beneficiaries. A parent may elect to continue coverage on behalf of any dependent children. The employee or the employee's spouse can elect continuation coverage on behalf of all of the qualified beneficiaries.
If you elect COBRA continuation coverage through an HMO and you go on an extended tour (9 months or more), you may transfer to Cigna continuation coverage effective with the first day of the month following your sending a notification of an extended tour letter to HMO Coordinator, Equity League Health Trust Fund, 165 West 46th Street, New York, NY 10036. Upon your return, you may transfer to HMO continuation coverage effective with the first day of the month following your sending a notification letter to Fund Office.
We strongly advise that when you go on an extended tour you transfer your benefits to the Cigna continuation coverage, since the Cigna plan will allow you to seek medical care with any doctor in the country.
In considering whether to elect continuation coverage, you should take into account that a failure to continue your group health coverage will affect your future rights under federal law. First, you can 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 health 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 not impose such pre-existing condition exclusions if you do not get 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 to 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 because of the qualifying event listed above. 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.
How much does COBRA continuation coverage cost?
Generally, each qualified beneficiary may be required to pay the entire cost of continuation coverage. The amount a qualified beneficiary may be required to pay may not exceed 102 percent (or, in the case of an extension of continuation coverage due to a disability, 150 percent) of the cost to the group health plan (including both employer and employee contributions) for coverage of a similarly situated plan participant or beneficiary who is not receiving continuation coverage. The required payment for each continuation coverage period for each option is described in this notice.
The American Recovery and Reinvestment Act of 2009 (ARRA) reduces the COBRA premium in some cases. The premium reduction is available to certain individuals who experience a qualifying event that is an involuntary termination of employment during the period beginning with September 1, 2008 and ending with March 31, 2010. If you qualify for the premium reduction, you need only pay 35 percent of the COBRA premium otherwise due to the plan. This premium reduction is available for up to 15 months. If your COBRA continuation coverage lasts for more than 15 months, you will have to pay the full amount to continue your COBRA continuation coverage. See the attached “Summary of the COBRA Premium Reduction Provisions under ARRA” for more details, restrictions, and obligations as well as the form necessary to establish eligibility.
The Trade Act of 2002 created a tax credit for certain individuals who become eligible for trade adjustment assistance and for certain retired employees who are receiving pension payments from the Pension Benefit Guaranty Corporation (PBGC). Under the tax provisions, eligible individuals can either take a tax credit or get advance payment of 65% of premiums paid for qualified health insurance, including continuation coverage. ARRA made several amendments to these provisions, including an increase in the amount of the credit to 80% of premiums for coverage before January 1, 2011 and temporary extensions of the maximum period of COBRA continuation coverage for PBGC recipients (covered employees who have a nonforfeitable right to a benefit any portion of which is to be paid by the PBGC) and TAA-eligible individuals.
If you have questions about these provisions, you may call the Health Coverage Tax Credit Customer Contact Center toll-free at 1-866-628-4282. TTD/TTY callers may call toll-free at 1-866-626-4282. More information about the Trade Act is also available at www.doleta.gov/tradeact.
When and How Must Payment For COBRA Continuation Coverage Be Made?
First payment for continuation coverage
If you elect COBRA continuation coverage, you do not have to send any payment with the Election Form. However, you must make your first payment for continuation coverage not later than 45 days after the date of your election. (This means 45 days after the date that your Election Form is post-marked, if mailed). If you do not make your first payment for continuation coverage in full within this 45-day period, you will lose all rights to COBRA continuation coverage under the Plan and your coverage will terminate as of the date indicated in this notice. Your first payment must include the periodic payments that are due through the date you make the first payment, subject to the 30-day grace period described below, thus you may be paying for more than one month of coverage. You are responsible for making sure that the amount of your first payment is correct. You may contact Fund Office to confirm the correct amount of your first payment.
No benefits will be paid or covered services provided until your payment is received. Therefore, even though you have 45 days to make your initial payment, it is advisable to include the premium payment together with the Election Form in order to receive prompt payment of claims. The initial payment must include premiums due for all months from the date on which your coverage terminates through the date of your payment.
Periodic payments for continuation coverage
After you make your first payment for continuation coverage, you will be required to make periodic payments for each subsequent coverage period. The amount due for each coverage period for each qualified beneficiary is shown in this notice. The periodic payments are due on a monthly basis, but can be made quarterly. Under the Plan, each of these periodic payments for continuation coverage is due on the first day of the month for that coverage period. If you make a periodic payment on or before the first day of the month to which it applies, your coverage under the Plan will continue for that coverage period without any break. The Plan will not send reminder notices of payments due for these coverage periods.
Grace periods for periodic payments
Although periodic payments are due on the first day of each month, you will be given a grace period of up to 30 days after the first day of the coverage period to make each periodic payment. If you do not pay the premium by the first day of the month, during the grace period your coverage under the Plan will be suspended as of the first day of the coverage period and then retroactively reinstated (going back to the first day of the coverage period) if you pay before the end of the grace period. This means that any claim you submit for benefits while your coverage is suspended may be denied and may have to be resubmitted once your coverage is reinstated.
If you fail to make a periodic payment before the end of the grace period for that coverage period, you will lose all rights to continuation coverage under the Plan. However, the Department of Defense Appropriations Act, 2010 provides an extended grace period for certain periods of coverage. If you have reached the end of the reduced premium period, you can make a retroactive payment of the reduced premium(s) for the period(s) of coverage immediately following what would have been the last period subject to the premium reduction. This payment must be made by the end of the otherwise applicable payment grace period.
Your first payment and all periodic payments for continuation coverage should be made payable to the Equity-League Health Trust Fund and should be sent to P.O. Box 11533 New York, NY 10286-1533.
For More information
This notice does not fully describe continuation coverage or other rights under the Plan. More information about continuation coverage and your rights under the Plan is available in your summary plan description or from the Fund Office.
If you have any questions concerning the information in this notice, your rights to coverage, or if you want a copy of your summary plan description, you should contact the Fund Office, (212) 869-9380 or toll free (800) 344-5220, located at 165 West 46th Street, 14th Floor, New York, NY 10036‑2582
For more information about your rights under ERISA, including COBRA, the Health Insurance Portability and Accountability Act (HIPAA), and other laws affecting group health plans, contact the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) at (866) 444-3272 or visit the EBSA website at www.dol.gov/ebsa. State and local government employees should contact HHS-CMS at www.cms.hhs.gov/COBRAContinuationofCov/ or NewCobraRights@cms.hhs.gov.
Keep Your Plan Informed of Address Changes
In order to protect your and your family's rights, you should keep the Fund Office informed of any changes in your address and the addresses of family members. You should also keep a copy, for your records, of any notices you send to the Fund Office.
