COBRA Temporary Continuation of Coverage
The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees and their qualified beneficiaries the opportunity to temporarily continue elected benefit coverage of certain plans when a COBRA qualifying event occurs and that would otherwise normally result in the loss of eligibility for enrolled coverage(s).
Qualifying Events
The following are common examples of COBRA qualifying events:
Termination of employment for reasons other than the employee’s gross misconduct.
Reduction in work hours.
Divorce or legal separation.
Death of the employee.
Loss of eligibility for a dependent child.
i.e. child becomes twenty-six (26) years old.
Employees are required to notify the Company’s Human Resources department immediately of a finalized divorce or legal separation to ensure eligibility for COBRA temporary continuation coverage for either themselves or qualified beneficiaries. Notice can be provided by requesting a change to your Marital Status within the Human Resources Information System (HRIS), BambooHR.
Voluntarily waving benefit coverage(s) during an open enrollment period is not a COBRA qualifying event.
Length of Coverage
COBRA temporary continuation coverage may continue for differing lengths of time depending upon the reason for eligibility. The time limitations include:
Up to eighteen (18) months if loss of coverage is due to termination of employment (for reasons other than the employee’s gross misconduct) or reduction in work hours.
Up to thirty-six (36) months for dependents if loss of coverage is due to death, divorce, or a dependent child’s loss of eligibility.
Cost of Coverage
Under COBRA temporary continuation coverage, the eligible individual pays full cost of the premium plus a two-percent (2%) administrative fee.
Notification to Employees
Upon initial enrollment into any of the Company’s group health benefits, employees shall receive the General Notice of COBRA Rights, which provides an awareness of continuation rights.
Within sixty (60) days of a termination from a group health benefit or flexible spending account (if payment amount is equal or greater than the account’s balance spent), employee’s and/or their qualifying dependent’s will be provided a notice and an election form that may be reviewed and completed should the employee, the employee’s spouse, and/or the employee’s dependent(s) decide to elect for COBRA temporary continuation coverage.
Employee Responsibility
The Company makes every effort to comply with the regulatory requirements regarding an employee’s and their qualified dependent’s rights under COBRA. However, under certain circumstances such as divorce and dependent eligibility, it is the employee’s responsibility to promptly advise the Company’s Human Resources department so that extended coverage may be offered as appropriate.
Termination of COBRA
COBRA temporary continuation coverage may terminate if:
The individual becomes covered by another group plan (including Medicare);
The individual fails to pay the required premium in-full within an established grace period; or
The Company no longer offers the plan(s) to its active employees.