The plan extends to participants and their dependents the option of continuing health care coverage, for the payment of a premium, in certain instances when coverage under the plan would otherwise end. This continuation of health care coverage is required by federal law under the consolidated omnibus budget reconciliation act (COBRA) of 1986 and is referred to in this document as "COBRA coverage." COBRA provides that a "qualified beneficiary" has the right to elect COBRA coverage. A "qualified beneficiary" is a person covered by the plan who by virtue of a "qualifying event" loses eligibility. "Qualifying events" are those events listed in COBRA that trigger a loss of coverage and entitlement to COBRA coverage. Different qualifying events lead to different allowable periods of cobra coverage, as set forth in the following chart:
Qualifying Event | Maximum Continuation Period | ||
Retiree | Spouse | Child | |
Termination of the retiree participant’s coverage under this plan | 18 months | 18 months | 18 months |
The commencement by the city on or after July 1, 1986 of a Title 11 bankruptcy proceeding | 18 months | 18 months | 18 months |
Death of the retiree participant, divorce or legal separation from the retiree participant | N/A | 36 months | 36 months |
Child no longer qualifies as a dependent | N/A | N/A | 36 months |
(A) Notification of qualifying event to the city.
(1) A retiree participant and/or his spouse must notify the city of a death, divorce, legal separation, or a child losing dependent status under the plan within 60 days of the date of the event.
(2) Coverage will be terminated upon the occurrence of a qualifying event (e.g., termination of coverage, divorce, etc.) and will be retroactively reinstated to the date of the qualifying event once COBRA coverage is properly elected and the initial premium is paid.
(B) Second qualifying event extension.
(1) If another qualifying event occurs while receiving 18 months of COBRA continuation coverage, the covered spouse and dependent children can get up to 18 additional months of COBRA continuation coverage, for a maximum of 36 months, if notice of the second qualifying event is properly given to the plan, this extension may be available to the spouse and any dependent children receiving continuation coverage if the participant or former participant dies, becomes entitled to Medicare benefits (under part A, part B or both), or gets divorced, or if the dependent child stops being eligible under the plan as a dependent child, but only if such event would have caused the spouse or dependent child to lose coverage under the plan had the first qualifying event not occurred.
(2) The plan administrator must be notified of this second qualifying event within 60 days of such event.
(C) Notification to qualified beneficiary. Within 14 days of receiving notice of a qualifying event, the plan will send an election notice to each qualified beneficiary.
(D) The election period for COBRA continuation A qualified beneficiary has 60 days after receipt of the election notice, which will be sent to his/her last known address, to elect to continue health care coverage pursuant to COBRA.
(E) Premium payment for COBRA coverage.
(1) A qualified beneficiary has 45 days from the date he or she timely elects COBRA coverage to pay the initial COBRA premium. If a qualified beneficiary fails to make payment within this period, coverage will terminate and he or she will not be given an opportunity to reinstate coverage.
(2) Thereafter, payments are due on the first day of the month of coverage. The postmark will serve as proof of the date paid. A qualified beneficiary has a 30-day grace period to make such payment. If a qualified beneficiary fails to make payment within this period, coverage will terminate and he or she will not be given an opportunity to reinstate coverage.
(3) The premium equals the cost to the plan of providing coverage plus a 2% administration fee.
(F) Early termination of COBRA coverage. COBRA coverage can terminate before the 18-month or 36-month period described above expires. COBRA coverage will automatically terminate on the earliest of the following:
(1) The first day of the month for which the qualified beneficiary's COBRA premium is not timely paid.
(2) The date the plan is terminated.
(3) The date a qualified beneficiary becomes covered by another group health plan that does not contain an exclusion or limitation for a preexisting condition of the qualified beneficiary. If the other plan has applicable exclusions or limitations, COBRA coverage will terminate after the exclusion or limitation no longer applies.
(4) The date a qualified beneficiary becomes entitled to medicare.
(5) The expiration of the maximum COBRA continuation period.
(G) Enrollment of dependents during period of COBRA coverage/coverage options.
(1) A child born to, adopted by, or placed for adoption with the covered retiree participant during a period of COBRA coverage is considered to be a qualified beneficiary, provided that the covered retiree participant has elected continuation coverage for himself/herself. During the COBRA coverage period, a qualified beneficiary may add an eligible dependent who initially declined COBRA coverage because of alternative coverage and later loses such coverage due to certain qualifying reasons.
(2) A qualified beneficiary has the same opportunities to change coverage options or add or eliminate coverage for dependents as similarly situated retiree participants are given.
(Ord. 08-03, passed 9-4-2008)