Notification of COBRA Continuation Coverage
(Please keep for your records)
* VERY IMPORTANT NOTICE *
On April 7, 1986, a Federal law was enacted requiring that most employers
sponsoring group health plans offer employees and their families the opportunity
for a temporary extension of health coverage (called “continuation coverage” or
“COBRA coverage”) at group rates in certain instances where coverage under the
plan would otherwise end. This notice is intended to inform you, in a summary
fashion, of your rights and obligations under the continuation coverage
provisions of the law. Both you, and your spouse if you are married, should
take the time to read this notice carefully and keep it with your records.
If you are an employee of Heritage Health & Housing you have a right to choose this continuation coverage if you lose your group health coverage because:
· A reduction in your hours of employment or the termination of your employment (for reasons other than gross misconduct on your part), or;
· Your employer has filed for reorganization under Chapter 11 of the Bankruptcy Code if you are a retiree.
If you are the spouse of an employee (or a retiree for reason 5, below), you have the right to choose continuation coverage for yourself if you lose group health coverage for any of the following five reasons:
1. The death of your spouse;
2. A termination of your spouse’s employment (for reasons other than gross misconduct) or reduction in your spouse’s hours of employment;
3. Divorce or legal separation from your spouse;
4. Your spouse becomes entitled (that is, covered) under Medicare; or
5. Your spouse’s employer files for Chapter 11 reorganization.
In the case of a dependent child of an employee (or a retiree for reason 6, below), he or she has the right to continuation coverage if group health coverage is lost for any of the following six reasons:
1. The death of the employee parent;
2. The termination of the employee parent’s employment (for reasons other than gross misconduct) or reduction in the employee parent’s hours of employment with Heritage Health & Housing;
3. Parents’ divorce or legal separation;
4. The employee parent becomes entitled (that is, covered) under Medicare;
5. The dependent ceases to be a “dependent child” ; or
6. The employee parent’s employer files for Chapter 11 reorganization.
Children, newly born or placed for adoption during the continuation period, may be added to the covered employee’s COBRA coverage as qualified beneficiaries. The covered employee or a family member must notify the Plan Administrator within 30 days of the birth, adoption or placement to enroll the child on COBRA, and COBRA coverage will last as long as it lasts for other family members of the employee. (The 30-day period is the Plan’s normal enrollment window for newborn children, adopted children or children placed for adoption.) If the covered employee or family member fails to so notify the Plan Administrator in a timely fashion, the covered employee will NOT be offered the option to elect COBRA coverage for this child.
Qualified beneficiaries who have elected COBRA will be given the same opportunity to change their coverage option or add or drop dependents at open enrollment as similarly situated active employees. In addition, HIPAA’s special enrollment rights will apply to those who have elected COBRA. HIPAA, a federal law, gives a person already on COBRA certain rights to add dependents if such person acquires a new dependent, or if an eligible dependent declines coverage because of alternative coverage and later loses such coverage due to certain qualifying reasons. Spouses or dependents who are added under this paragraph do not become qualified beneficiaries – their coverage will end at the same time coverage ends for the person who elected COBRA and later added them.
Under the law, the employee or a family member has the responsibility to inform Raquel Martinez of a divorce, legal separation, of the Social Security determination that a qualified beneficiary was disabled at the time of the qualifying event, or at any time during the first 60 days of COBRA continuation, or a child losing dependent status under United Healthcare within 60 days of the qualifying event or Social Security determination of disability. The employee must inform Raquel Martinez of a child, newly born or placed for adoption during the continuation period, within 30 days of the event to add the child to the employee’s coverage.
If you or a family member do not inform Raquel Martinez within the 60-day notice period, any qualified beneficiary that loses coverage will not be offered the option to elect coverage.
When Raquel Martinez is notified that one of these events has happened, Raquel Martinez will in turn notify you that you have the right to choose continuation coverage. Under the law, you have 60 days from the date you would lose coverage because of one of the events described above to inform Raquel Martinez that you want continuation coverage.
If you do not choose continuation coverage within the 60-day election period, your group health insurance coverage will end and you will lose your right to elect continuation coverage.
You and/or your qualified family member will be automatically notified of the right to elect continuation coverage for any of the following reasons:
1. A reduction in your hours of employment or the termination of your employment (for reasons other than gross misconduct on your part), or;
2. Your employer has filed for reorganization under Chapter 11 of the Bankruptcy Code if you are a retiree.
If you choose continuation coverage, Heritage Health & Housing is required to offer you and your qualified family members continuance coverage that is the same coverage that you had on the day before the qualifying event.
The law requires that your qualified dependents (or a retiree for reason 4, below) be afforded the opportunity to maintain continuation coverage for three years because of the following:
1. Employee’s death;
2. Divorce or legal separation;
3. Employee becomes entitled to Medicare; or
4. Employee’s employer files for Chapter 11 reorganization.
The law requires that you be afforded the opportunity to maintain continuation coverage for 18 months because of your termination of employment (other than gross misconduct) or a reduction in hours of employment, unless the Social Security Administration determines that you were disabled at the time of the qualifying event, or at any time during the first 60 days of COBRA continuation and you inform Raquel Martinez before the end of the 18-month period, in which case the disabled qualified beneficiary and non-disabled family members coverage may be extended up to 29 months. If, during that 18 months another event takes place that also entitles you to coverage, coverage may be extended. In no case may the total amount of continued coverage be more than 36 months. If you are an employee age 60 or older, have at least five years of service, and were covered under a California contract, you and your spouse are eligible for 60 months of COBRA coverage.
However, the law also provides that your continuation coverage may be cut short for any of the following reasons:
1. Heritage Health & Housing no longer provides group health coverage to any of its employees.
2. The premium for your continuation coverage is not paid in a timely fashion.
3. You become covered under another group health plan that does not include a preexisting conditions clause that applies to you or to a covered dependent.
4. You (employee, spouse or dependent child) become entitled (that is, covered) under Medicare.
5. You (employee, spouse or dependent child) become entitled to a 29-month maximum coverage period due to the disability of a qualified beneficiary, but then it is determined that the qualified beneficiary is no longer disabled.
6. The occurrence of any event (i.e., submission of fraudulent benefit claims) that permits termination of coverage for a reason other than the COBRA coverage requirements.
You do not have to show that you are insurable to choose continuation coverage. However, under the law, you may have to pay all or part of the premium for your continuation coverage; you will have a grace period of at least 30 days to pay the premium. [The law also says that, at the end of the 18-month, 29-month, or 36-month continuation coverage period, you must be allowed to enroll in an individual conversion health plan provided.
If you have any questions about the law, please contact Raquel Martinez. Also, if you have changed marital status, or you or your spouse have changed addresses, please notify Raquel Martinez.
VERY IMPORTANT NOTICE:
It is your responsibility to send the enclosed application and a check for at least 1 month premium to Raquel Martinez at the above address within the time period allowed. Also, you must send in your premium for all future months by the first of the month for the upcoming month’s coverage. Failure to do so within 30 days from the due date will terminate your coverage back to the last paid date. You will have no opportunity for reinstatement, and you will be responsible for all claims made within that time. If you have any questions on the law, or the manner in which payment is expected, please call Raquel Martinez. It is strongly recommended that you send all payments and correspondence via registered mail with return receipt so that you have written proof that payment was received.
Your total monthly payment is: $
Please remit with the enclosed application.