Cobra Continuation Coverage
COBRA For TAA Eligible Persons
A covered person who has a qualifying event will become a qualified beneficiary and may elect to continue coverage in accordance with the requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, popularly known as COBRA.
What is COBRA?
COBRA is a federal law which applies to employers who have 20 or more employee and who sponsor group health plans. it requires these employers to offer employees and their family members who lose their health coverage under certain circumstances an opportunity to extend that coverage. This is called continuation coverage.
The information provided in this section of the plan summarizes this law.
Qualified Beneficiaries are the covered employee if they lose coverage under this plan due to termination of employment (other than for gross misconduct) or reduction in hours worked and eligible covered dependents who were covered by this plan immediately prior to a Qualifying Event. In addition, a child born to, or placed for adoption with a covered employee during the period of COBRA continuation coverage is considered a Qualified Beneficiary. A covered retiree or dependent of a retiree who loses coverage within a year of the employer’s Chapter 11 bankruptcy filing is also a qualified beneficiary.
A covered employee will have the right to elect continuation coverage if they lose health coverage under this plan because of:
1.a reduction in hours of employment or layoff;
2.the termination of employment, for reasons other than gross misconduct.
Each of the covered employee's covered dependents has the right to elect continuation coverage if they lose health coverage under this plan because of:
1.a reduction in the covered employee's hours of employment;
2.the termination of the covered employee's employment, for reasons other than gross misconduct;
3.the death of the covered employee
4.the covered employee's entitlement to Medicare;
5.the divorce or legal separation from the covered employee, in the case of the spouse; or
6.the covered employee's child no longer meeting the definition of a covered dependent.
A retiree and each of his covered dependents has the right to elect continuation of coverage if he substantially loses coverage within one year before or after the date the employer commences a Chapter 11 bankruptcy proceeding.
The plan requires Qualified Beneficiaries (or someone acting on their behalf) to notify the plan administrator when any of the following qualifying events occurs in order to obtain or extend COBRA continuation coverage:
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the divorce or legal separation of the employee and their spouse.
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an event that causes a dependent child to lose eligibility.
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a second qualifying event as described in the Duration of Coverage section of this plan.
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a determination of disability by the Social Security Administration.
Notice is also required if a person who has previously notified the plan administrator of a determination of disability is determined to be no longer disabled by the Social Security Administration.
The notice must be in writing and sent by first class mail to the plan administrator at the following address:
Indiana State University
Staff Benefits Administration
300 Rankin Hall
Terre Haute, IN 47809
The notice must include the name and social security number of each Qualified Beneficiary, the type of Qualifying Event, the nature of the disability or other determination by the Social Security Administration (if applicable), the date of the Qualifying Event and the name, address and daytime phone number of a person that the plan administrator can contact if additional information is needed to determine the person’s COBRA rights.
The notice must be postmarked no later than the following dates:
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where the Qualifying Event is a divorce, separation, loss of dependent child eligibility or a second Qualifying Event, 60 days after the latest of:
> the date of the Qualifying Event;
> the date the Qualified Beneficiary would lose coverage as a result of the Qualifying Event; or
> the date the employee and/or their covered spouse is informed of this notice obligation through information furnished at orientation.
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where the Qualifying Event is a disability determination, 60 days after the latest of:
> the date of the disability determination by the Social Security Administration;
> the date of the Qualifying Event;
> the date the Qualified Beneficiary would lose coverage as a result of the Qualifying Event; or
> the date the employee and/or their covered spouse is informed of this notice obligation through information furnished at orientation.
The notice of disability determination must also be postmarked before the end of the first 18 months of continuation coverage.
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in the case of a determination that a person is no longer disabled, 30 days after the later of;
> the determination by the Social Security Administration; or
> the date the employee and/or his or her covered spouse is informed of this notice obligation through the information furnished at orientation.
Within 14 days of the date notice of a Qualifying Event is received, the plan administrator will give written election notice to Qualified Beneficiaries of the right to continuation of coverage. The notice will state the amount of premium required for the continuation of coverage.
If the Qualified Beneficiary wants continuation coverage, then he must complete and return the election notice within 60 days of the later of:
1.the date the coverage would otherwise have ended; or
2.the date of the notice informing the person of the right to continue.
If a person elects COBRA continuation, he must pay the premium for the "initial premium months" by the 45th day after the date of the election. The initial premium months are the months that end on or before the 45th day after the date of the election. COBRA coverage will become effective back to the date of the loss of coverage upon timely receipt of the initial premium.
All other premium payments are due on the first day of the month for which continuation coverage is provided, subject to a 30-day grace period. Claims incurred during the grace period will not be paid unless and until the required premium is timely received.
If the Qualified Beneficiary is a former covered employee or covered dependent and the Qualifying Event is termination of employment (for reasons other than gross misconduct) or reduction of hours, then:
1.the maximum period of continuation of coverage is 18 months from the date of the Qualifying Event; however,
2.if the Qualified Beneficiary is also disabled on the date of the Qualifying Event or within 60 days thereafter as determined under Titles II or XVI of the Social Security Act, then the maximum period of continuation coverage for the disabled Qualified Beneficiary and members of his family who are also Qualified Beneficiaries is 29 months from the date of the Qualifying Event, provided that the plan administrator is notified of the determination during the initial 18 month period and within 60 days of the determination.
If the Qualified Beneficiary is a covered dependent and:
1.the Qualifying Event is the covered employee's death, divorce, legal separation, entitlement to Medicare benefits or the end of the covered dependent child's eligibility under this plan, then the maximum period of continuation coverage is 36 months from the date of the Qualifying Event; however
2.if a second Qualifying Event occurs during the 18 months that the covered dependent has continuation of coverage as a result of the covered employee's termination of employment (for reasons other than gross misconduct) or reduction of hours, then the maximum period of continuation coverage is 36 months from the date of the first Qualifying Event; or
3.in the case of a Qualifying Event which is the covered employee's termination of employment (for reasons other than gross misconduct) or reduction of hours which occurs within 18 months after the date the employee became entitled to Medicare, the maximum period of continuation coverage for Qualified Beneficiaries other than the covered employee is 36 months after the date the employee became entitled to Medicare.
A second Qualifying Event will not result in an extension of COBRA coverage to 36 months unless the second event would have caused a loss of coverage even if the first event had not occurred.
Continuation coverage may terminate before the end of the maximum period of continuation of coverage as soon as any of the following events occurs
1.the required monthly contribution for continuation coverage is not received on a timely basis;
2.a Qualified Beneficiary first becomes covered under any group health plan which does not contain any exclusion or limitation that applies to any preexisting condition of the Qualified Beneficiary;
3.the date the Qualified Beneficiary becomes entitled to Medicare;
4.in the case of any Qualified Beneficiary who is entitled to a maximum continuation period of 29 months due to his disability or that of another Qualified Beneficiary, the first day of the month following 30 days after the date the Social Security Administration determines that the formerly disabled Qualified Beneficiary is no longer disabled; or
5.the date the employer ceases to provide any group health plan for any employee.
Benefits under the continuation coverage will be paid according to the provisions and limitations of the plan in force on the date services are rendered.
COBRA for TAA Eligible Persons
Tax Credits: A former employee who properly elects COBRA and is an eligible recipient of trade adjustment assistance (TAA) under the Trade Act of 2002 may be entitled to a tax credit or advance payment of 65% of the premiums for COBRA or other qualified health insurance for himself and his dependents. More information about how to apply for and receive the credit or advance payment is available from the Health Care Tax Credit Customer Service Center at 1-866-628-4282.
SecondElection Period: A former employee who isentitled to elect COBRA but does not do so during the regular election period will have a second COBRA election period if:
the employee is eligible for the TAA tax credit; and
the first qualifying event was loss of a job that resulted in his TAA eligibility.
The second election period begins on the first day of the month in which the employee becomes eligible for trade adjustment assistance and ends:
60 days later; or
6 months after the initial loss of coverage;
whichever comes first.
Coverage will begin on the first day of the second election period. The time between the loss of coverage and the start of the second election period will not be counted when determining whether there has been a break in coverage for purposes of the plan’s exclusion for preexisting conditions.
COBRA For TAA Eligible PersonsTax Credits: A former employee who properly elects COBRA and is an
eligible recipient of
trade adjustment assistance (TAA) under the Trade Act of 2002 may be
entitled to a taxcredit or advance payment of 65% of the premiums for
COBRA or other qualified health
insurance for himself and his dependents. More information about how to
apply for and
receive the credit or advance payment is available from the Health Care
Tax Credit
Customer Service Center at 1-866-628-4282.
Second Election Period: A former employee who is entitled to elect COBRA
but does not
do so during the regular election period will have a second COBRA
election period if:
• the employee is eligible for the TAA tax credit; and
• the first qualifying event was loss of a job that resulted in his TAA
eligibility.
The second election period begins on the first day of the month in which
the employee
becomes eligible for trade adjustment assistance and ends:
• 60 days later; or
• 6 months after the initial loss of coverage;
whichever comes first.
Coverage will begin on the first day of the second election period. The
time between the
loss of coverage and the start of the second election period will not be
counted when
determining whether there has been a break in coverage for purposes of
the plan’s
exclusion for preexisting conditions.