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After Coverage Ends - COBRA

Questions and Answers About
When Your Coverage Terminates – COBRA
Prepared By
The Employee Benefit Service Center

Q     What is a qualifying event?
A     A qualifying event is one of the following events, if the event causes the employee, spouse, or dependent to lose coverage under the plan:

The death of a covered employee; The termination (other than by reason of employee’s gross misconduct) or reduction of hours, of a covered employee’s employment to below the required number of hours; The divorce or legal separation of a covered employee from the employee’s spouse; A covered employee becoming entitled to Medicare benefits; A dependent child ceasing to be a dependent child of a covered employee under the applicable dependent requirements of the Plan; or, A proceeding in bankruptcy with respect to an employer from whose employment a covered employee retired at any time.
Q     Does it matter if the termination of employment was voluntary or involuntary?
A     Apart from facts constituting gross misconduct, it does not matter if your qualifying event was voluntary or involuntary.

Q     What will my coverage be under COBRA continuation coverage?
A     Your coverage will be the same coverage as those who have the plan and are not on COBRA continuation coverage. If you had accumulated dollars toward you deductible or other annual or lifetime accumulators while you were on the plan before your COBRA coverage begin, you will gain credit for those after your COBRA coverage begins. If the coverage for those on the plan who are not on COBRA changes (improves or reduces) your coverage will change as their coverage changes.

Q     What if I do not like the coverage I had before electing COBRA. Can I change my coverage under COBRA? 
A     In general, a qualified beneficiary need only be given an opportunity to continue the benefits they had immediately before the qualifying event. This is true even if the coverage ceases to be of the same value to the qualified beneficiary, for example if they move out of the geographic of the network and have only out-of-network benefits. The qualified beneficiary may request that the employer make available to them an opportunity to elect alternative coverage (or networks) if the employer makes such alternatives available to others on the plan or if such offerings could be extended to the area serving the qualified beneficiary. The employer should provide such services, if available, within a reasonable time after the request.
If there is an open enrollment period, each qualified beneficiary on COBRA has the same open enrollment rights as active employees on the Plan and may make the same type changes that active employees may make. 

Q     How do I know when a qualifying event has occurred?
A     In general, the employer or plan administrator must determine when a qualifying event has occurred and will notify you of such. 
However, each covered employee or qualified beneficiary is responsible for notifying the plan administrator of the occurrence of a qualifying event that is either a child’s ceasing to be a dependent (under plan requirements), a divorce or legal separation. 
The plan is not required to offer the qualified beneficiary an opportunity to elect COBRA coverage if this notification is not provided to the plan administrator within 60 days of the later of, 

  • The date of the qualifying event or, 
  • The date the qualified beneficiary would lose coverage as a result of the qualifying event. 

    How do I elect COBRA?
A     The plan will notify you of your COBRA rights and you have a maximum 60 days from the later of the date of the notice or from the date you lose coverage to make your election decision. The decision should be sent to the plan in writing on the forms provided by the plan. If you elect COBRA coverage during the 60 day time period, COBRA coverage will be from the date you lost your coverage, even if you decide up to 60 days after the date you lost the coverage. During the period of your decision, coverage will be terminated until after your election is processed and your payment for the first month is received. If you elect COBRA coverage, you will reinstated, retroactively to the date you lost coverage.
However, the COBRA coverage starting date is different if you first waive COBRA coverage and later decide to enroll for COBRA coverage within the 60 day time period. The starting date of coverage for the waiver situation is described in thefollowing question and answer.

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Notice: This information is prepared exclusively for the use
of clients of 
The Employee Benefit Service Center

Longtime member of the Society of Professional Benefit Administrators (SPBA)

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