Contact:
Human Resources
Office: (417) 873-7434
Fax: (417) 873-6987
hr@drury.edu

Staff Policy Handbook

Part III: Fringe Benefits


302 - Benefits Continuation (COBRA) / Credible Coverage (HIPAA)

 

HEALTH CARE CONTINUATION COVERAGE (COBRA)

A.      Continuation Coverage (COBRA). On April 7, 1986, a federal law was enacted {Public Law 99-272, Title X, Consolidated Omnibus Budget Reconciliation Act, COBRA} requiring that most employers sponsoring group health plans offer staff members and their families the opportunity for a temporary extension of health coverage (called continuation coverage or COBRA) at group rates in certain instances where coverage under the plan would otherwise end. This part of the Plan is intended to inform you, in summary fashion, of your rights and obligations under the continuation coverage (COBRA) provisions of the law. Both you and your spouse should take the time to read this carefully.

If you are a staff member covered by the Drury University Employee Health Care Plan (the Plan), you have a right to choose continuation coverage (COBRA) if you lose your group health coverage because of the following reasons:

1) termination of employment (for reasons other than gross misconduct); or

2)

reduction of work hours below the minimum needed to maintain eligibility under the Plan.

If you are the spouse of a staff member covered by the Plan, you have the right to choose continuation coverage (COBRA) for yourself if you lose group health coverage under the Plan for any of the following seven (7) reasons:

1) the death of your spouse;
2) termination of your spouse's employment (for reasons other than gross misconduct);
3) reduction of spouse's work hours below the minimum needed to maintain eligibility under the Plan;
4) divorce or legal separation from your spouse;
5) your spouse becomes entitled to Medicare;
6) your spouse is retired, and your spouse's employer files for Chapter XI reorganization of the Bankruptcy Code; or
7) your spouse is a military reservist and is called to active duty.

A dependent child of a staff member covered by the Plan has the right to continuation coverage (COBRA) if group health coverage under the Plan is lost for any of the following nine (9) reasons:

1) the death of the parent;
2) termination of parent's employment (for reasons other than gross misconduct);
3) reduction of parent's work hours below the minimum needed to maintain eligibility under the Plan;
4) parent's divorce or legal separation;
5) parent becomes entitled to Medicare;
6) the dependent ceases to be a "dependent child" under the Plan;
7) your parent is retired, and your parent's employer files for Chapter XI reorganization of the Bankruptcy Code;
8) your parent is a military reservist and is called to active duty; or
9) a child is born or placed for adoption with a staff member or former staff member covered by the Plan during the period of continuation coverage. This child is also eligible for continuation coverage.

Under the law, the staff member has the responsibility to inform the Employer of a divorce, legal separation, or a child losing dependent status under the Plan within sixty (60) days of the occurrence of any such event. If notice is not received within that sixty (60) day period, the dependent will not be entitled to choose continuation coverage (COBRA). The Employer will be aware of the staff member's death, termination of employment, reduction in hours, or Medicare entitlement.

When the Employer is aware or is notified that one of these events has occurred, the Employer will in turn notify you that you have the right to choose continuation coverage (COBRA). Under the law, you have at least sixty (60) days from the later of the date of the notice or the date you would otherwise lose coverage because of one of the events described above to inform the Employer that you want continuation coverage (COBRA).

If you do not choose continuation coverage (COBRA) within the sixty-day period, your group health coverage will end.

In most instances, if continuation coverage were elected and paid for within the proper time frames, your coverage would continue without interruption. The Employer and/or Claims Supervisor does reserve the right to verify your eligibility if you did elect continuation coverage. If you were not eligible, the Employer and/or Claims Supervisor reserve the right to terminate that coverage retroactively. Under certain circumstances, the COBRA time frame could be extended beyond those outlined in the notice. If you sign a waiver regarding your continuation coverage, you may revoke the waiver during the election period. Any claims that occur within the waiver period might not be covered.

For a COBRA qualified beneficiary moving outside of the region, coverage may be reduced similarly to that of Active Staff members outside of the region; however, if an existing plan would cover Active Staff members in that region, qualified beneficiaries must be allowed the option of coverage on that plan. In certain instances, coverage may be eliminated or provided for emergency services only.

If you choose continuation coverage (COBRA), the Employer is required to give you coverage that, as of the time coverage is being provided, is identical to the coverage provided under the Plan to similarly situated staff members or family members. The law requires that you be afforded the opportunity to maintain continuation coverage (COBRA) for three (3) years unless you lose group health coverage because of a termination of employment or reduction in hours. In that case, the required continuation coverage period for the staff member and his or her dependents is eighteen (18) months. If, during that 18-month period (or 29 months in the case of disabled individuals who have met the requirements under the paragraph entitled "Special rule for disabled individuals" below), another event (other than commencement of a bankruptcy proceeding under Title 11 of the United States Code with respect to the Employer) occurs that would also entitle a dependent spouse or child (other than a spouse or child who became covered after continuation coverage (COBRA) became effective) to his or her continuation coverage (COBRA), the continuation coverage (COBRA) may be extended. However, in no case (other than Medicare entitlement as described below) will any period of continuation coverage (COBRA) be more than 36 months.

Special continuation coverage (COBRA) period for Medicare entitlement:

When the staff member becomes entitled to Medicare, the continuation coverage (COBRA) period for the spouse or dependent children of the staff member will not end prior to 36 months from the date of Medicare entitlement.



Special rule for disabled individuals:

For a staff member or family member who is disabled under the Social Security Act at any time during the first sixty (60) days of continuation coverage (COBRA) resulting from a termination of employment or reduction in hours, continuation coverage (COBRA) will be extended for up to 29 months rather than 18 months. To be eligible for this additional period of continuation coverage (COBRA), the staff member or family member must notify the Employer within sixty (60) days of obtaining a Social Security determination of such disability and before the end of the initial 18 month period of coverage. During the 11-month period of extended coverage, you may be charged higher premiums (up to 150%). You are required to notify the Employer within thirty (30) days of the date of any final determination that you or your dependents are no longer disabled.

However, the law also provides that your continuation coverage (COBRA) may be cut short for any of the following five (5) reasons:

1) the Employer no longer provides group health coverage to any of its staff members;
2) you fail to pay the required monthly premium within 30 days of the due date. The due date is defined as the first day of the month for which coverage is to be continued;
3) you become covered, after the date of the COBRA election, under any other group health plan (as a staff member or otherwise) that does not contain any exclusion or limitation with respect to any preexisting condition you may have and such exclusions or limitations or preexisting conditions are applicable to you;
4) you become entitled to Medicare, after the date of the COBRA election; or
5) it is determined under the Social Security Act that you are no longer disabled.

Under the law, you have to pay all (up to 102 percent) or part of the premium for your continuation of coverage (COBRA). You will have a grace period of 45 days following your election to make the entire initial premium for the continuation coverage (COBRA); and you will have a grace period of 30 days from the due date to pay any subsequent premiums.

If you have changed marital status or if a dependent ceases to be a "dependent child" under the Plan, please notify the Employer.

Health Insurance Portability and Accountability Act (HIPAA)

Recent changes in Federal law may affect your health coverage if you are enrolled or become eligible to enroll in health coverage that excludes coverage for pre-existing medical conditions.

HIPAA limits the circumstances under which coverage may be excluded for medical conditions present before you enroll. Under the law, a pre-existing condition exclusion generally may not be imposed for more than 12 months (18 months for a late enrollee). The 12-month (or 18-month) exclusion period is reduced by the length of your prior health coverage. You are entitled to a certificate of Creditable Coverage that will show evidence of your prior health coverage. If you buy health insurance other than through an employer group health plan, a certificate of prior coverage may help you obtain coverage without a pre-existing condition exclusion.

For employer group health plans, these changes generally took effect at the beginning of the first plan year starting after June 30, 1997. For example, Drury University's Plan Year began on June 1, 1998, so Drury is not required to give you credit for your coverage prior to June 1, 1998.

When you terminate your coverage with Drury University, or if you obtain dual coverage through another health plan, you have the right to receive a certificate of Creditable Coverage since July 1, 1998. You may need to provide other documentation for earlier periods of health care coverage. Check with your new plan administrator to see if your new plan excludes coverage for pre-existing conditions and if you need to provide a certificate of Creditable Coverage or other documentation of your previous coverage.

You may request certificates of Creditable Coverage for any of your dependents (including your spouse) who were enrolled under your health care coverage.

Related Links:

Next Section
303 - Employee Assistance Program
Previous Section
301 - Health Insurance
Table of Contents