Benefits Continuation (COBRA)

Last Updated 04/03
Applies to Administrators, Faculty, and Staff  
Related Policies:

Policy

The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees and their qualified beneficiaries the opportunity to continue benefit coverage under the employer's medical plans, dental plans, vision plan, and flexible spending accounts when a "qualifying event" would normally result in the loss of eligibility.

Qualifying Events

Following are common examples of qualifying events:

  • Termination of employment
  • Death of the employee
  • Reduction in work hours
  • Divorce
  • Retirement (if not eligible for retiree medical insurance)
  • Loss of eligibility by a dependent child

Length of Coverage

Coverage may continue for differing lengths of time depending upon the reason for eligibility. The time limitations are:

  • Up to 18 months if loss of coverage is due to termination of employment or reduction in work hours
  • Up to 36 months for dependents if loss of coverage is due to death, divorce, or a dependent child's loss of eligibility
  • Up to 29 months if the individual is disabled at the time of eligibility for continued coverage or is disabled within 60 days of eligibility for continued coverage

Cost of Coverage

Under extended coverage, the eligible individual pays full cost of coverage at the employer's group rate plus an administrative fee.

Termination of Continued Coverage

Continued coverage may terminate if:

  • The individual becomes covered by another group plan (including Medicare),
  • The individual fails to pay the required premium within the established grace period, or
  • The employer no longer offers the plan(s) to its active employees.

Employee Responsibility

The University makes every effort to comply with the guidelines regarding an employee's and qualified dependent's rights under COBRA. Under certain circumstances such as divorce and dependent eligibility, it is the employee's responsibility to advise the Office of Human Resources so the extended coverage may be offered to the employee's dependents.

Procedures

Notification of Employee COBRA Rights

Upon initial enrollment in the plan, the employee receives the "Initial Notification of COBRA Rights" so that they and their dependent(s) are aware of their continuation rights.

Notifying Human Resources of a Qualifying Event

When an employee experiences a qualifying event as described above in this policy, notification must be provided as soon as possible to the Office of Human Resources as follows:

Employee

Notify the Office of Human Resources immediately when:

  • a divorce is final
  • a dependent child no longer meets age and/or dependency eligibility requirements as outlined in each specific plan

Supervisor

Notify the Office of Human Resources of the following events within the timeframe noted:

Event Necessary Document Timeframe

Termination, death, retirement

Termination Form

Immediately

Reduction of hours

Employee Status Form

Immediately

Upon notification of the qualifying event, Meritain Health will initiate the appropriate correspondence within 14 days to the employee and/or the qualified dependent providing pertinent information on application procedures and time limitations for continuation of coverage.