What You Need to Know
Through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), you and your eligible dependents may have the opportunity to continue your enrollment in medical, prescription drug, dental, and vision coverage for a specified period. COBRA continuation coverage can become available to you or members of your family when you would otherwise lose your coverage under the Company’s benefit plan because of a life event known as a “qualifying event.”
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
If you have a qualified life event that causes you or a dependent to lose Company health care coverage, you may be able to continue your coverage for a period of time under COBRA.
COBRA allows you to continue the same medical, dental, and/or vision coverage you had as an active employee, but at the full cost plus a 2% administrative fee. Also, you have access to the Employee Assistance Program and you can continue your Health Care Flexible Spending Account for the remainder of the calendar year, but only on an after-tax basis. COBRA continuation does not apply to any other benefits, such as life insurance, AD&D insurance, disability insurance or the Dependent Care Flexible Spending Account.
The length of time you can continue your coverage depends on the qualifying event:
|Qualified Event||Eligibility||Coverage Continuation|
|You lose coverage due to voluntary termination of employment, retirement, discharge (for reasons other than gross misconduct), layoff, disability, or reduction in hours.||You and your dependents||18 months|
|Your dependent loses coverage because you pass away, get divorced or legally separated, or become entitled to Medicare.||Your dependents||36 months|
|Your dependent loses coverage because they reached age 26.||Your dependents||36 months|
Cost of coverage
Generally, while on COBRA you’ll pay the full cost of health care coverage plus a 2% administrative fee.
Second qualified events
If your dependent experiences another qualified event while receiving 18 months of COBRA coverage, they may be able to extend coverage for another 18 months (for a total of 36 months).
You must notify Discovery Benefits, our COBRA administrator, prior to the end of the 18-month COBRA coverage period to extend coverage.
If you or your dependent is disabled prior to the original qualifying event date for an 18-month period, that person may be able to continue coverage for an additional 11 months (for a total of 29 months). This extension does not include coverage for the Health Care Flexible Spending Account, which may only be continued through the end of the year in which you leave the company.
To qualify, notice of disability determination must be received from the Social Security Administration within the 18-month period. You must provide the Benefits Department with a copy of the determination within 60 days of its receipt and before the end of the 18-month period.
Loss of COBRA coverage
COBRA continuation coverage will stop if:
- You reach the end of your coverage continuation period
- You obtain health coverage under another health plan, unless that plan includes a limitation or an exclusion for a pre-existing condition of yours or your dependent(s)
- You become entitled to Medicare benefits
- The plan itself is terminated (or no longer provides health coverage) and neither the Company nor any of its affiliates sponsor any other employee group health plans.
- You fail to make a required monthly premium payment
- The Social Security Administration determines, during the 11-month disability extension, that the covered person is no longer disabled.
If you experience one of these situations, or you have a question, contact Discovery Benefits.
Electing COBRA coverage
If you terminate employment, pass away, have a reduction in hours, or become entitled to Medicare (less than 18 months prior to termination of employment or a reduction in hours), the Human Resources Department will notify Discovery Benefits, the COBRA administrator, automatically.
You must notify Discovery Benefits within 31 days for all other qualifying events or within 60 days in the event of divorce or legal separation.
Discovery Benefits will send you a COBRA election form, generally within 14 days of receiving notification of your qualifying event. To elect COBRA, submit a completed form within 60 days of receiving the paperwork. Your first payment is due within 45 days of your initial election. When you make your election, you may reduce your coverage to individual coverage, but you may not switch to a different benefit option until the next Annual Enrollment.
If you elect COBRA, your coverage is reinstated retroactively to the day after your active coverage ended. However, between your benefit termination date and the start of your COBRA coverage, you will need to pay out of pocket for health care expenses and submit a claim for reimbursement.
If you do not elect COBRA, your coverage will end as of the date you lose eligibility for benefits. You will not be able to elect COBRA after the 60-day period.
Other coverage options
If you have a special enrollment period, there may be other, more affordable coverage options for you and your family through the Health Insurance Marketplace, Medicaid, or another group health plan (such as a spouse’s plan).
You should compare your other coverage options with COBRA continuation coverage and choose the coverage that is best for you. Be sure to review premium amounts in addition to out-of-pocket expenses, like deductibles and coinsurance. Choose carefully, because once you’ve made your choice it can be difficult or even impossible to switch to another coverage option.
For more information about the Health Insurance Marketplace, visit www.HealthCare.gov or call 1-800-318-2596.
COBRA and Marketplace enrollment
If you enroll in COBRA continuation coverage, you can switch to a Marketplace plan during a Marketplace open enrollment period. Or, if you have another qualifying event, such as marriage or the birth of a child, you can end your COBRA continuation coverage early and switch to a Marketplace plan. Warning! If you terminate your COBRA continuation coverage early without another qualifying event, you cannot enroll in Marketplace coverage until the next open enrollment period.
Once your COBRA continuation coverage expires, you’ll be eligible to enroll in Marketplace coverage through a special enrollment period, even if it is not an open enrollment period.
If you sign up for Marketplace coverage instead of COBRA continuation coverage, you cannot switch to COBRA continuation coverage under any circumstance.