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COBRA/HIPAA FAQ’s



What is COBRA?
COBRA is an acronym for "Consolidated Omnibus Budget Reconciliation Act of 1985." COBRA requires employers to offer continuation of group health and/or dental benefits for a specified time to individuals who would otherwise lose coverage due to certain qualifying events.

What is a Qualified Beneficiary?
An individual who is entitled to COBRA continuation coverage due to being covered under a group health and/or dental plan on the day the qualifying event causes loss of coverage (e.g., termination of employment, divorce from the covered employee, etc.). This also includes a COBRA participant’s newborn child or newly adopted child acquired who is added to the coverage on or after the initial qualifying event.

How long can a Qualified Beneficiary keep COBRA?
If a qualifying event is due to termination of employment, loss of coverage following leave without pay, or reduction in hours, a qualified beneficiary is entitled to a maximum of 18 months of continuation coverage. All other qualifying events entitle a qualified beneficiary up to 36 months of coverage. An 18-month continuation period may be extended to 36 months if a secondary qualifying event occurs during the initial 18-month continuation coverage period (e.g., divorce, death or loss of dependent status). A qualified beneficiary is never entitled to more than 36 months of continuation coverage.

How much are my premium rates?
Premiums for 18-month and 36-month qualifying events are calculated at 102% of the current group rate. The premium for disability participants who extend their coverage beyond the initial 18 months of coverage will be calculated at 150% of the current group rate. Rates are recalculated at the time of the group’s annual renewal.

When are my premium payments due?
The initial COBRA premium payment will be due within 105 days of the date coverage terminated or the date of notice whichever is later. If you will receive an annuity from ERS, your monthly premium will be automatically deducted from your monthly annuity payment. Subsequent premiums are due on the first day of the coverage month. Your monthly premium payment must be postmarked within thirty (30) days of the due date or coverage will be automatically cancelled retroactive to the last day of the month in which a full premium payment was received and was not considered delinquent. For example, your June premium payment is due on June 1, and will be considered late if it is postmarked after June 30. If the June premium payment is late, coverage would be terminated May 31.

Will Flexible Benefit Administrators notify me if a premium payment is not received?
It is your responsibility to keep up with your premium payments. If you are unsure of when your last payment was made, call Flexible Benefit Administrators, Inc. If your coverage is cancelled, Flexible Benefit Administrators, Inc. will notify you in writing. Cancelled COBRA coverage may not be reinstated.

What are the reasons my coverage can be cancelled by Flexible Benefit Administrators, Inc.?
COBRA coverage may be cancelled prior to the end of the continuation coverage expiration date if:

  • A timely premium payment is not received.
  • The group benefit plan ceases to provide coverage to any employee/retiree.
  • The participant becomes covered under another group health and/or dental plan on or after the COBRA coverage effective date unless the participant is subject to a pre-existing condition limitation or exclusion in the other group health plan. COBRA coverage will end when the new group health plan coverage begins and there is no limitation or exclusion for pre-existing conditions in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
  • The participant begins receiving Medicare benefits on or after the COBRA coverage effective date.
  • The participant extends coverage due to a disability and later begins receiving Medicare benefits or the Social Security Administration (SSA) makes a final determination that the disability no longer exists.
  • A written request is received from the participant requesting cancellation of coverage. Coverage cancellations will be made effective the last day of the month in which the U.S. Postal Service postmarks the request. A full premium payment must be submitted for the month in which a request for cancellation is submitted.

May cancelled COBRA coverage be reinstated?
No.

What if I become covered under another group health plan or begin receiving Medicare benefits?
You are responsible for notifying the Flexible Benefit Administrators, Inc. in writing when you enroll in another group health and/or dental plan or begin receiving Medicare benefits. The right to continue COBRA coverage terminates when an individual becomes covered on or after the COBRA effective date by another group health plan that does not limit or exclude coverage for pre-existing conditions OR if you begin receiving Medicare benefits. Your COBRA coverage will be cancelled retroactive to the last day of the month prior to the month in which you first became covered under the other group health and/or dental plan or began receiving Medicare benefits.

Under HIPAA a group health plan’s pre-existing condition exclusion period will be reduced month for month by the individual’s preceding period of "creditable coverage" under another health plan. The continuous coverage period in another health plan is considered "creditable coverage" provided there has been no lapse in coverage of more than 63 days. COBRA continuation coverage may be terminated if a COBRA participant becomes covered by a new group health plan with a pre-existing condition exclusion clause that is satisfied by the "creditable coverage" provision. The HIPAA rules limiting the applicability of exclusions in most employers’ health plans for pre-existing conditions became effective in plan years beginning on or after July 1, 1997.

If a participant becomes covered by another group health plan that limits or excludes coverage for pre-existing conditions on or after the COBRA effective date, COBRA coverage will not be terminated until the expiration of the pre-existing conditions exclusion period. In order to continue COBRA coverage you will be required to provide the following items regarding the other group health plan: documentation of the pre-existing conditions limitation provision, documentation of the effective date of coverage for each person that is covered by the other group health plan and documentation (e.g. medical or prescription billings) indicating that services were provided during the pre-existing period for each person that is covered by the other group health plan. COBRA coverage will be cancelled on the last day of the month in which the pre-existing condition exclusion period expires

May I change my health/dental plan elections or makes changes to my COBRA coverage?
COBRA coverage will continue with your current health and/or dental carrier. You can make election changes to add/remove your dependents or make plan election changes during the benefit renewal period.