Continuation Coverage Rights
From WEA Trust Insurance Coordinators Handbook
Contents |
Legal rights to group continuation insurance coverage
COBRA is a term often used to refer to individuals’ legal rights to continue group insurance coverage, at their own expense, when they would otherwise lose that coverage. COBRA is the acronym for the Consolidated Omnibus Budget Reconciliation Act, a federal law. Not only do individuals have rights under federal law, they also have rights under Wisconsin law. In this section of the Handbook, when we speak about individuals’ legal continuation rights to insurance coverage, we are referring to their rights under both state and federal law. Continuation rights pertain only to our health, dental, and long term care (LTC) plans.
After your employees enroll in our health and dental plans, we will send them information explaining their continuation rights and options.
An individual is entitled to continuation coverage if he or she is a qualified beneficiary who experiences a qualifying event.
A qualified beneficiary can be an employee, a spouse, or a dependent child who is covered under the employer’s group plan on the day before a qualifying event takes place. The only exception to this rule is that a child who is born to, or placed for adoption with, a qualified beneficiary who was previously the covered employee during the COBRA continuation period also becomes a qualified beneficiary.
If your policy covers domestic partners, please note that the Trust extends continuation coverage to domestic partners and their biological or legally adopted children who were covered under the group plan on the day before a qualifying event took place.
A qualifying event is any of the following which causes a qualified beneficiary to lose his or her coverage under the employer’s group plan:
- The death of the covered employee.
- The termination of the covered employee’s employment.
- A reduction in the covered employee’s hours.
- A divorce or annulment of the covered employee’s marriage.
- The covered employee’s eligibility for Medicare benefits.
- The loss of a dependent child’s eligibility for coverage under the plan.
Your responsibilities
As the employer, you are obligated to follow all laws pertaining to continuation coverage. We assume the administrative role for you, provided you promptly notify us of any qualifying event or change in any employee’s status that impacts the legal continuation rights of an employee or dependent. So that we can properly perform the necessary administrative duties within the proper time frames, you, as the employer, are responsible for notifying us within 30 days of:
- A covered employee’s death.
- A covered employee’s termination of employment or reduction in hours (including approved leaves of absences).
- A covered employee’s entitlement to Medicare benefits.
Covered employees or their family members must notify us within 60 days of:
- A divorce or annulment.
- A child ceasing to be eligible as a dependent under the group plan’s rules.
Please note that while you’re not legally required to inform the Trust of these events, you should notify us as soon as you are aware of them. Doing so will allow us to promptly contact the individuals involved and inform them of their continuation coverage rights. Do not assume that the employee has notified us.
Our insurance responsibilities
After we’re notified, we will:
- Notify all qualified beneficiaries within 14 days that they have the right to purchase continuation coverage.
- Provide an explanation of rights and responsibilities, as well as all necessary election forms to the qualified beneficiaries.
Electing continuation coverage
Qualified beneficiaries must choose, or elect, continuation coverage in writing within a specific time period. This election period ends 60 days after the later of the following dates:
- The date on which coverage would otherwise end because of a qualifying event.
- The date the written notice and election form is provided to the qualified beneficiary by the Trust.
If a qualified beneficiary elects continuation coverage, we take care of all billing and collect premium payments. The qualified beneficiary will be billed directly at the same time that you are billed for active employees.
Duration of coverage
Qualified beneficiaries are eligible to continue group coverage for 18 months for qualifying events due to employment termination or reduction in work hours. Other qualifying events, or a second qualifying event during the initial period of coverage, may permit a beneficiary to receive a maximum of 36 months of coverage. In addition, special rules for disabled individuals may also extend the maximum period of coverage from 18 months to 29 months.
Please refer to the Notice of Your Continuation Coverage Rights Under COBRA form for a further explanation of second qualifying events and the rights of disabled individuals.
Death
Survivors of employees who die at age 55 or older may continue group health coverage for as long as desired (even if they remarry or obtain other group coverage), provided we receive the required premiums and continue to insure the eligible class to which the employee belonged.
Retirees
Employees who retire at age 55 or older may continue group health coverage for as long as desired (even if they obtain other group coverage), as long as we receive the required premiums and continue to insure the eligible class of employees to which the employee belonged before retirement.
When coverage ends
For most people and in most situations, group continuation coverage ends on the earliest of the following dates:
- The end of the period for which the last premium was paid on time.
- The date on which the applicable period of continuation coverage ends.
- The date on which the covered individual becomes covered under another group health plan which does not contain any exclusion or limitation regarding a preexisting condition of the individual.
Additional continuation coverage options
There are additional continuation coverage options available through the Trust even after the legal period of continuation coverage has ended. The employee must contact us within 60 days following the end of the COBRA continuation period for information regarding other coverage options.
