COBRA KEY INFORMATION
The Consolidated Omnibus Budget Reconciliation Act (COBRA) was created by federal legislation in 1985. This act mandates that most employers offer an opportunity to continue health and dental insurance coverage to employees and eligible family members when there is a “qualifying event” that would result in a loss of coverage under an employer’s plan.
ELIGIBILITY
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 a total of 18 months. 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 must 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. In the case of loss of coverage due to an employee’s death, divorce or legal separation, or a dependent child ceasing to be an eligible dependent under the terms of the plan, coverage may be continued for up to a total of 36 months.
ENROLLMENT & COVERAGE
In order to enroll in COBRA, you must complete and return the coverage election form within 60 days of the termination of the prior coverage. Once your termination is in the University system, the Benefits Office will send these forms to you, or you may contact Benefits to request them. For events other than termination, you will need to contact Benefits. You may choose to remain in the same plans(s) in which you were previously enrolled or you may change plans within those offered for employees in your employment classification.
COBRA coverage must begin the first of the month following loss of your other coverage, even if that date is prior to the Benefits Office receiving the election form. There cannot be a lapse of coverage. You will be billed on a monthly basis for the premiums and will be given the option of either receiving a University bill or having the premiums automatically deducted from a bank account.
You may only cover dependents covered at the time you became COBRA eligible. In the event of marriage, birth or adoption, you may add those individuals involved in that event, but not other dependents. There is no COBRA coverage for domestic partners of staff covered under the Merit system.
TERMINATION
If you decide to terminate coverage before the end of your eligibility period, provide written notice prior to the date you want it ended. Include your full name and your University identification number if possible. Coverage will end the first of the month after receiving this notification, or the current month if requested. The University will terminate coverage for non-payment of premiums.
COBRA PREMIUM SUBSIDY
The American Recovery and Reinvestment Act of 2009 (ARRA), enacted by Congress and signed by President Obama on February 17, 2009, provides a federal subsidy to assist those individuals who are eligible for COBRA because of an involuntary loss of employment. The act provides a 65% subsidy toward the cost of COBRA premiums for up to nine months. Qualified beneficiaries are required to pay 35% of the cost.
An “assistance eligible individual” (AEI) must meet all of the following criteria:
• Is eligible for COBRA coverage on or after 9/1/08 and before 12/31/09; and
• Elects coverage during the original COBRA election period or during the special enrollment period beginning 3/1/09; and
• Has been involuntarily terminated from employment between 9/1/08 and 12/31/09.
An individual is not eligible for the subsidy if they are eligible for other group health insurance coverage through their own employment or through a spouse, regardless of whether or not they choose that option. They are also not eligible if they are eligible for Medicare. Coverage under the subsidy ends on the date the AEI becomes eligible for coverage under another group plan or through Medicare. It is their responsibility to notify the Benefits Office in writing if this occurs.
Retirees who choose the COBRA option cannot return to the University/State retiree plans after the 9 month subsidy ends. Enrolling in COBRA is considered to be leaving the employer’s plan.
Materials to determine eligibility for this subsidy will be included in the packet sent to all staff whose employment is terminated. All necessary forms must be completed and returned to the Benefits Office. If an individual indicates they should be eligible for the subsidy, the Benefits Office will review the reason for termination to verify this and respond to the request.
More information on the federal stimulus package subsidy may be found on the U.S. Department of Labor web site: http://www.dol.gov/ebsa/COBRA.html.
COST
COBRA Rates without subsidy - effective March 1, 2009 pdf
COBRA Rates with subsidy - effective March 1, 2009 pdf