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Cobra Notification Letter for Group Health Plan Continuation

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COBRA

The Federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires that the City offer employees, retirees and their families the opportunity to continue group health and/or welfare fund coverage in certain instances where the coverage would otherwise terminate. The monthly premium will be 102% of the group rate. All group health benefits, including Optional Riders, are available. The maximum period of coverage is 36 months.

On May 4, 2020 the Employee Benefits Security Administration ("EBSA") in the Department of Labor ("DOL") and the Internal Revenue Service ("IRS") issued a Joint Notice providing new guidance on delays due to COVID-19 affecting all health and retirement plans, with implications for governmental plans.

The Joint Notice designates a period of time, called the "Outbreak Period," that begins on March 1, 2020 and ends 60 days after the announced date of the end of national emergency related to COVID-19 or such other date announced by EBSA and IRS. Thus, the end date of the period is currently unknown.

  • COBRA Notice of Qualifying Event. Extension of the 60-day period to notify the City of qualifying COBRA event.
    Under COBRA, the employee or family member has the responsibility of notifying the City agency payroll or personnel office and the applicable welfare fund of the death, divorce, domestic partnership termination, or change of address of an employee, or of a child's losing dependent status within 60 days after the end of the Outbreak Period.
    When a qualifying event (such as an employee's death, termination of employment, or reduction in hours) occurs, the employee and family will receive a COBRA information packet from the City describing continuation coverage options.
  • COBRA Election Notice Deadlines. Extension of the date for the City to provide a COBRA election notice.
    When a COBRA qualifying event (such as an employee's death, termination of employment, or reduction in hours) occurs, the employee and family will receive a COBRA rights information packet from the City describing continuation coverage options within 14 days of the end of the Outbreak Period.
  • COBRA Election Periods. Extension of the 60-day election period for COBRA continuation coverage.
    To elect COBRA continuation of health coverage, the eligible person must complete a "COBRA - Continuation of Coverage Application. Employees and/or eligible family members can obtain application forms from their agency payroll or personnel office.  Please contact the welfare fund if you wish to purchase its benefits.
    Upon receiving notification of their COBRA rights, eligible persons electing COBRA continuation coverage must do so within 60 days after the end of the Outbreak Period.
  • COBRA Premium Payment Deadlines. Extension of the date for making COBRA premium payments.
    Eligible persons electing COBRA continuation coverage must pay the initial premium within 45 days of their election. Premium payments will be made on a monthly basis. Payments after the initial payment will have a 30-day grace period. The premiums for COBRA coverage during the Outbreak Period must be paid within 30 days after the end of the Outbreak Period.

COBRA Eligibility

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Employees Not Eligible for Medicare — Employees whose health and/or welfare fund coverages are terminated due to a reduction in hours of employment or termination of employment (for reasons other than gross misconduct). Termination of employment includes unpaid leaves of absence of any kind. More information concerning situations involving termination due to gross misconduct is available from your agency benefits representative.

Spouse/Domestic Partner Not Eligible for Medicare — A Spouse/Domestic Partner who loses coverage for any of the following reasons: 1) death of the City employee or retiree;  2) termination of the employee's City employment (for reasons other than gross misconduct); 3) loss of health coverage due to a reduction in the employee's hours of employment;  4) divorce from the City employee or retiree; 5) termination of domestic partnership with the City employee or retiree; 6) retirement of the employee.

Dependent Children Not Eligible for Medicare — Dependent children who lose coverage for any of the following reasons: 1) death of a covered parent (the City employee or retiree); 2) the termination of a covered parent's employment (for reasons other than gross misconduct); 3) loss of health coverage due to the covered parent's reduction in hours of employment; 4) the dependent ceases to be a "dependent child" under the terms of the Health Benefits Program; 5) retirement of the covered parent.

Note:  Individuals covered under another group plan are not eligible for COBRA continuation. However, the COBRA applicant may be able to purchase certain welfare fund benefits. For more information, contact the appropriate fund.

COBRA Periods of Continuation for Dependents

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If dependents lose benefits as a result of death, divorce, domestic partnership termination, or loss of coverage due to the Medicare-eligibility of the contract holder, or due to the loss of dependent child status, the maximum period for which COBRA can continue coverage is 36 months. This period will be calculated from the date of the loss of coverage under the City program.

The definition of a qualified beneficiary includes a child born to or adopted by certain qualified beneficiaries during the COBRA continuation period. Only if you are a qualified beneficiary by reason of having been an employee, will a child born to or adopted by you during the COBRA continuation period become a qualified beneficiary in his or her own right. This means that if you should lose your COBRA coverage, your new child may have an independent right to continue his or her coverage for the remainder of the otherwise applicable continuation period. However, you must cover your new child as a dependent within 30 days of the child's birth or adoption in order to have this added protection.

Any increase in COBRA premium due to this change must be paid during the period for which the coverage is in effect.

Continuation of coverage can never exceed 36 months in total, regardless of the number of events that relate to a loss in coverage. Coverage during the continuation period will terminate if the enrollee fails to make timely premium payments or becomes enrolled in another group health plan.

COBRA Notification Responsibilities

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Under the law, the employee or family member has the responsibility of notifying the City agency payroll or personnel office and the applicable welfare fund within 60 days of the death, divorce, domestic partnership termination, or change of address of an employee, or of a child's losing dependent status.

When a qualifying event (such as an employee's death, termination of employment, or reduction in hours) occurs, the employee and family will receive a COBRA information packet from the City describing continuation coverage options.

Election of COBRA Continuation

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To elect COBRA continuation of health coverage, the eligible person must complete a "COBRA - Continuation of Coverage Application. Employees and/or eligible family members can obtain application forms from their agency payroll or personnel office.  Please contact the welfare fund if you wish to purchase its benefits.

Eligible persons electing COBRA continuation coverage must do so within 60 days of the date on which they receive notification of their rights, and must pay the initial premium within 45 days of their election. Premium payments will be made on a monthly basis. Payments after the initial payment will have a 30-day grace period.

Former employees and dependents who elect COBRA continuation coverage are entitled to the same benefits and rights as employees. Therefore, COBRA enrollees may take part in the annual Transfer Period.

Individuals eligible for COBRA may also transfer when a change of address allows or eliminates access to a health plan that requires residency in a particular Zip Code.

COBRA Transfer Opportunities

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The COBRA application form to be used during the Transfer Period (or after a qualifying event) can be obtained from the Forms and Downloads section of this website. Applications should be mailed to the COBRA enrollee's current health plan, which will forward enrollment information to the new health plan. Transfer Period changes will become effective on January 1st of the following year. Information about the effective date for a transfer made as the result of a qualifying event must be obtained from the new health plan.

City agencies do not handle COBRA enrollee transfers, or process any future changes such as adding dependents. All future transactions will be handled by the health plan in which the person eligible for COBRA is enrolled.

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Source: https://www1.nyc.gov/site/olr/health/active/heatlh-active-cobra.page

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