The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides for continuation of health coverage for you, your spouse and Dependent Children, if you lose coverage under the Plan due to a qualifying event. You and your Dependents may continue health coverage for a limited period of time by making self-payments to the Plan.
If you lose eligibility due to insufficient hours or termination of your employment, your coverage will continue without self-payment, depending upon how long you worked in Covered Employment. You may then elect COBRA Continuation Coverage for up to a maximum of 18 months. Your COBRA Continuation Coverage will be subsidized for the first six months and then you will pay the full rate for any remaining coverage thereafter. This provision applies when you elect COBRA for yourself or you elect family coverage.
If you or your Dependent loses eligibility for any other reason, the full COBRA Continuation Coverage rate will be charged for the entire period of coverage.
You and your Dependents may choose individual coverage or family coverage.
Eligibility for COBRA Continuation Coverage
If you or your Dependents are eligible for COBRA Continuation Coverage, you are considered qualified beneficiaries, meaning you were covered by the Plan on the day before the qualifying event.
If you marry, have a newborn Child, or have a Child placed with you for adoption while you are enrolled in COBRA Continuation Coverage, you may enroll that spouse or Child for the balance of the period of your coverage. You must complete the enrollment within 30 days after the birth, marriage, or placement for adoption. Children born to, adopted, or placed for adoption with you will have the rights of a qualified beneficiary if they are properly enrolled in the Plan. However, other Dependents who are added to the coverage will not have the rights of a qualified beneficiary.
If you choose COBRA Continuation Coverage, you are entitled to the same type of coverage that you had before the event that triggered COBRA. Your COBRA Continuation Coverage includes the Death Benefit for you as the Employee; however, COBRA Continuation Coverage does not include the Accidental Death and Dismemberment or Weekly Accident and Sickness Disability Benefits currently provided to Active Employees by the Fund. The Death Benefit is not included in COBRA Continuation Coverage for your Spouse of Dependent Children. If there is a change in the health coverage, including Prescription Drug coverage that is provided by the Plan to Active Participants, that same change will be made to your COBRA Continuation Coverage.
Qualifying Events That Trigger COBRA Continuation Coverage
If you experience a qualifying event that causes you to lose coverage, you will be considered a qualified beneficiary, and the Fund will send you a COBRA Election Notice and a form for you to elect coverage. The qualifying events under which you and/or your Dependents may lose coverage under the Plan and the period of time for which you may make self-payments to continue benefits are described below.
You become a qualified beneficiary if you lose coverage because one of the following qualifying events:
- Your hours of employment are reduced, or
- Your employment ends for any reason other than your gross misconduct.
Your spouse becomes a qualified beneficiary if he or she loses coverage because any of the following qualifying events:
- Your death,
- Your hours of employment are reduced,
- Your employment ends for any reason other than your gross misconduct,
- You and your spouse become divorced or legally separated, or
- You become entitled to Medicare benefits under Part A, Part B or both. Becoming entitled to Medicare means that you: 1) were eligible for Medicare benefits, and 2) enrolled in Medicare (under Part A, Part B, or both). The entitlement date is the date of enrollment in Medicare.
Your Eligible Dependent Children become qualified beneficiaries if they lose coverage because any of the following qualifying events:
- Your death,
- Your hours of employment are reduced,
- Your employment ends for any reason other than your gross misconduct,
- The parents become divorced or legally separated,
- The Child stops being eligible for coverage under the Plan as an Eligible Dependent Child, or
- You become entitled to Medicare benefits under Part A, Part B or both. Your becoming entitled to Medicare means that you: 1) were eligible for Medicare benefits, and 2) enrolled in Medicare (under Part A, Part B, or both). The entitlement date is the date of enrollment in Medicare.
If you lose eligibility for coverage because your hours are reduced or your employment is terminated, you and your Dependents may continue COBRA Continuation Coverage for a maximum period of 18 months from the date of loss of coverage. Once coverage is lost, the monthly contribution rate for individual or for family coverage for the first six months will be subsidized. The contribution rate for the seventh through the eighteenth month is not subsidized and, therefore, is higher.
If your Dependents lose coverage under the Plan because of divorce, legal separation, your death, or loss of Dependent status, your Dependents may maintain COBRA Continuation Coverage for a maximum period of 36 months from the date coverage was lost.
Medicare Entitlement and COBRA Continuation Coverage. When the qualifying event is the end of employment or reduction of your hours of employment, and you became qualified for and enrolled in Medicare benefits less than 18 months before the qualifying event, COBRA Continuation Coverage for qualified beneficiaries other than you lasts until 36 months after the date of Medicare entitlement. However, your maximum period of COBRA Continuation Coverage will be 18 months.
In no case are you entitled to COBRA Continuation Coverage for more than a total of 18 months, unless you qualify for an additional period of up to 11 months because of disability as described below. Other family members may be entitled to COBRA Continuation Coverage for a total of 36 months.
Second Qualifying Event During Initial COBRA Continuation Coverage Period. If, during an 18-month period of COBRA Continuation Coverage following your termination of employment or reduction in hours, you die, divorce, legally separate, or your Child loses Dependent status under the Plan, the maximum period is extended to 36 months from the date you initially lost eligibility. This extension only applies to:
- Qualified beneficiaries who are members of your family and were covered by the Plan before the loss of your eligibility, and
- Your Dependent Children who were born, adopted, or placed for adoption with you while you were covered under COBRA Continuation Coverage.
Extended Coverage in Certain Cases of Disability. If, during or before the first 60 days of an 18-month period of COBRA Continuation Coverage, you or one of your Dependents are determined by the Social Security Administration (SSA) to be totally and permanently disabled so as to be entitled to Social Security Disability benefits, the 18-month maximum period can be extended for up to 11 more months (for a total of 29 months) for all qualified beneficiaries who have elected COBRA Continuation Coverage. This extension is available only if:
- The disability starts at some time before the 60th day of COBRA Continuation Coverage, and
- The qualified beneficiary or another family member notifies the Fund Office of the Social Security Administration’s determination within 60 days after the determination is received by the qualified beneficiary, and
- That notice is received by the Fund Office before the end of the 18-month COBRA Continuation Coverage period.
If a disability extension is granted, the monthly self-payment rate for COBRA Continuation Coverage for the additional 11 months of coverage under the disability extension will be higher than the monthly self-payment rate paid for the first 18 months, as explained in the next section.
Any qualified beneficiary who elects COBRA Continuation Coverage will pay the full cost of the coverage. The Fund can charge the full cost of coverage for similarly situated Employees and their families (including both the Fund’s share and Employee’s share, if any) plus an additional 2%.
If the 18-month period of COBRA Continuation Coverage is extended because of disability, the Fund can charge the cost plus an additional 50%.
The monthly cost depends on how many people are covered. Rates are provided for one person or for family coverage. If a qualified beneficiary adds Dependents that are acquired during the COBRA Continuation Coverage period and the qualified beneficiary was previously paying for individual coverage, the qualified beneficiary will be required to pay the higher rate.
The Trustees will establish the COBRA Continuation Coverage rates in accordance with ERISA and the Internal Revenue Code, the laws that governs the Plan. Generally, the Trustees will set new rates each Plan Year beginning July 1.
When you elect COBRA Continuation Coverage, you are required to make the first payment no later than 45 days after the date of your election, which is the date your COBRA Election Notice is post-marked, if mailed. If you do not make the first payment for continuation coverage in full within the 45-day deadline after your election, you will lose all rights to COBRA Continuation Coverage. You are responsible for contacting the Fund Office to make sure that the amount of your first payment is correct.
Your subsequent payments for COBRA Continuation Coverage are due on the first day of the month for which coverage is being provided. However, you have a 30-day grace period to make the payment. If the payment is not made when due, you will lose all continuation coverage rights under the Plan. COBRA Continuation Coverage will be provided for each coverage period as long as payment for that coverage period is made before the end of the grace period for that payment. However, if you pay a periodic payment later than the first day of the month for which it applies, but before the end of the grace period (the end of the month) for the coverage, coverage under the Plan will be suspended as of the first day of the month and then retroactively reinstated, going back to the first day of the month when your payment is received.
If you lose eligibility due to insufficient hours and you elect COBRA Continuation Coverage, you will be required to pay at the subsidized rate for the first six months and at the full rate thereafter. This provision applies both to you and to any of your Eligible Dependents covered by the COBRA Continuation Coverage. You and your Dependents may separately choose individual coverage or jointly choose family coverage. If your Dependent loses eligibility for any other reason, he or she will be required to pay the full rate for the entire period of coverage.
COBRA Continuation Coverage Notice and Election
You or your covered family member must inform the Fund Office of a divorce, legal separation, or of a Child losing Dependent status. You or your Dependent must provide written notice within 60 days of the event or the person affected forfeits the right to COBRA Continuation Coverage.
Your Employer has the responsibility to notify the Fund Office of your death, termination of employment or reduction in hours within 30 days of the date that you would lose coverage due to the event. However, you or your covered Dependents are encouraged to notify the Fund Office of any event that may qualify you or your Dependents for continuation of coverage.
When the Fund Office is notified that one of these events has occurred, it will in turn notify you or your Dependents of the right to choose continuation coverage and the time frame within which you must make the election. If you are not entitled to COBRA Continuation Coverage, the Fund will notify you of your ineligibility in writing.
You or your Dependents have an election period of at least 60 days from the date the notice is provided to inform the Fund Office of your election of COBRA Continuation Coverage.
You may elect individual coverage or family coverage. Once you make your election for COBRA Continuation Coverage, you cannot change it unless it is within the 60-day election period. This means that after the 60-day election period ends, if you elect individual coverage, you cannot change to family coverage and if you elect family coverage, you cannot change to individual coverage. However, if you elect family coverage for only two family members and one of the family members dies so that individual coverage would be less expensive, the surviving individual may change to individual coverage. The Plan will charge for the individual premium starting on the first day of the month following the day the covered family member dies.
COBRA Benefit Coverage
Under COBRA Continuation Coverage, you are entitled to the same type of coverage that you had before the event that triggered coverage. If you or your Dependents choose COBRA Continuation Coverage and make the required self-payments, the Welfare Fund will provide coverage for all medical, dental, prescription drug, wellness, Substance Abuse, employee assistance plan, hearing, and vision benefits under the Plan. Death, Accidental Death and Dismemberment, and Weekly Accident and Sickness Disability Benefits are excluded from COBRA Continuation Coverage.
In addition, if there is a change in the healthcare coverage that is provided by the Plan to Active Participants, that same change will be made to the COBRA Continuation Coverage of qualified beneficiaries.
Termination of COBRA Continuation Coverage
If you or your Dependent elects COBRA Continuation Coverage, coverage will terminate as of the date the first of any of the following events occur:
- You or your Dependents do not pay the self-payment for COBRA continuation coverage within 30 days of its due date.
- You or your Dependents become covered under another group health plan. Special rules exist concerning pre-existing conditions. Contact the Fund Office for details.
- You or your Dependents become eligible for Medicare. Contact the Fund Office for details.
- The Welfare Fund no longer provides any healthcare benefits.
- The Social Security Administration determines that you are no longer disabled during the COBRA disability extension period. You or your Dependent must give the Fund Office notice that you are no longer disabled within 30 days of the date that the Social Security Administration has determined that you are no longer disabled.
Availability of Other Coverage
There may be other coverage options for you and your family. With the implementation of the Affordable Care Act you are able to buy coverage through the Health Insurance Marketplace. In the Marketplace, you could be eligible for a new kind of tax credit that lowers your monthly premiums right away, and you can see what your premium, deductibles, and out-of-pocket costs will be before you make a decision to enroll. Being eligible for COBRA does not limit your eligibility for coverage for a tax credit through the Marketplace. Additionally, you may qualify for a special enrollment opportunity for another group health plan for which you are eligible (such as a spouse’s plan), even if the plan generally does not accept late enrollees, if you request enrollment within 30 days.
If you have questions about your COBRA Continuation Coverage, you should contact the Fund Office, or you may contact the nearest Regional or District Office of the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA). Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA’s website at www.dol.gov/ebsa/.
Keep the Fund Informed of Address Changes
In order to protect your family’s rights, you should keep the Fund informed of any changes in the addresses of family members. You should also keep a copy, for your records, of any notices you send to the Fund.