This is to inform you of your rights to continue health coverage if you or a dependent child lose the coverage due to a qualifying event and the group planholder is subject to the federal law COBRA. Groups are usually subject to this law if they have 20 or more employees.
QUALIFYING EVENTS
A qualifying event is any of the following events that causes you or a dependent spouse or child to loose coverage under any of the Company’s health plans:
-
a covered employee’s termination of employment for any reason other than gross misconduct
-
a covered employee’s reduction in hours to fewer than the number required for plan participation
-
a covered employee’s death
-
a covered employee’s divorce or legal separation from the spouse
-
a covered employee’s entitlement to Medicare under Title XVIII of the Social Security Act
-
a covered child’s loss of dependent status under a plan.
CONTINUATION COVERAGE
If you , your spouse, or your child have a qualifying event, you may continue the health coverage you had immediately before the event occurred. However, persons covered by Medicare under Title XVIII of the Social Security Act on the day before a qualifying event are not eligible to continue coverage.
If you continue coverage, all expenses accumulated will be credited towards your deductible as if your qualifying event never took place. Also, you do not have to provide proof of insurability in order to continue coverage. Further, during open enrollment periods, you will have the same rights as active employees to change your coverage.
HOW DO I ELECT CONTINUATION OF COVERAGE?
If you or a dependent have a qualifying event, your group plan administrator should notify you of your continuation rights. At that time, you will have at least 59 days to decide whether you want to continue your health coverage through the Company’s plan. This election period will end 60 days from the date of the qualifying event.
For families that lose coverage, each family member can separately elect continuation coverage. However, unless otherwise specified in the election, an employee’s election to continue coverage will be deemed to include an election of continuation for the employee’s spouse and dependent children. Similarly, a spouse’s election to continue coverage will be deemed to include an election of continuation for any dependent child covered by the plan. An election on behalf of a family member is binding on the family member.
Although an employee and spouse can continue coverage on behalf of other family members, they cannot decline coverage on behalf of other family members. For example, if an employee declines continuation coverage, the spouse or dependent child can elect to continue coverage.
HOW LONG CAN I CONTINUE COVERAGE?
In general you can continue coverage for up to 18 or 36 months, depending on the qualifying event.
If the qualifying event is employment termination or reduction in hours, the maximum period of time you can continue coverage is 18 months from the date of the qualifying event. For other qualifying events, the maximum period is 36 months.
CAN I HAVE MORE THAN ONE QUALIFYING EVENT?
Sometimes, a spouse or dependent child can have more than one qualifying event. A second qualifying event occurs if these three conditions are met:
-
The first event is the employee’s termination of employment or reduction in hours.
-
The second event is a sort that give rise to 36 months of continuation coverage (e.g.; a covered employee’s death or divorce)
-
The second event takes place while continuation coverage is effective.
If a second qualifying event occurs, we will extend the maximum coverage period from 18 months to 36 months, measured from the date of the first qualifying event.
CAN THE COMPANY TERMINATE MY CONTINUATION COVERAGE BEFORE THE MAXIMUM COVERAGE PERIOD ENDS?
The Company can terminate a person’s continuation coverage before the maximum coverage period ends for any of the following reasons:
-
full payment for the person’s coverage is not received on a timely basis
-
the insured becomes covered by another group health plan maintained by another employer that does not limit or exclude coverage for any pre-existing medical condition of the person
-
the person becomes covered by Medicare
-
the Company ceases to provide group health plan coverage for all active employees
DO I HAVE TO PAY FOR CONTINUATION COVERAGE?
You must pay the full cost of continuation coverage, plus 2% for the Company’s administrative expenses. Your Company should include information on the cost of continuation coverage and the payment terms in notices to individuals who have a qualifying event.
DO SPECIAL PROVISIONS APPLY TO THE DISABLED?
Persons whom Social Security determines are disabled, under Title II of XVI of the Social Security Act, at the time of employment termination or reduction in hours can request an extension in the maximum coverage period from 18 to 29 months. To obtain this extended coverage, you must notify the plan administrator of Social Security’s disability determination within 60 days of the determination and 18 months of the qualifying event.
If you receive this extended coverage, you must pay 102% of the full cost of the continuation coverage for the first 18 months. After 18 months, the required payments will increase from 102% to 150% of the full cost of coverage.
If you receive the extended coverage, you are required by law to notify the plan administrator that you are no longer disabled within 30 days of any final determination made by Social Security. Once notified, your extended coverage will be terminated effective the first month beginning more than 30 days after Social Security’s determination.
WHEN CONTINUATION COVERAGE TERMINATES
When continuation coverage terminates, you may be able to purchase an individual medical policy or convert your existing plan to an individual policy with your current insurance company. This conversion privilege may also be available if you decline continuation coverage. You should look into the cost of getting other coverage a few months prior to termination of your existing coverage to avoid a lapse.
DO I HAVE TO NOTIFY THE COMPANY OF ANY QUALIFYING EVENTS?
In general, the Company will notify you of a qualifying event. However, employees or their families must notify the Company in the event of a divorce, legal separation, or when a child no longer qualifies as a covered dependent under the plan within 60 days after these events occur or, if later, within 60 days of the date coverage would otherwise terminate. Individuals failing to notify the Company of these events within the 60-day period will not be permitted to continue coverage.
QUESTIONS ABOUT CONTINUATION COVERAGE
If you have any questions about continuation coverage, please contact your plan administrator.
HIPAA (Health Insurance Portability & Accountability Act) [ Up to Top ]
Health Insurance Portability and Accountability Act (“HIPAA”) was signed into federal law, in August of 1996. (This law is sometimes referred to as "the Kennedy-Kassebaum bill," after its sponsors.) Most parts of the law apply to new employer groups starting 7/l/97, and to in-force groups at their first renewal or plan anniversary on or after that date.
Its major impact is in the following areas:
UNDERWRITING
No one may be excluded from coverage on the basis of health. For small groups (2-50), coverage is available on a guaranteed issue basis.
PRE-EXISTING CONDITION LIMITATION
The maximum pre-ex limitation permitted is 6/12 (18 months for late adds), which must be reduced by "creditable" prior coverage. No pre-ex limitation is permitted for pregnancy or for newborns or adopted children under 18 if enrolled on time.
CERTIFICATION OF COVERAGE DATES & WAITING PERIODS
A certification form must be provided when an insured terminates, when COBRA ends, and on request within 24 months after termination. Creditable coverage does not include any time prior to a break in coverage of 63 days or more. Note: the effective date for this part of the law was 6/l/97. As required by the law, notice should have been sent to employees terminated between October 1, 1996 and June 1, 1997 notifying them of their right to obtain certification if they need it.
GUARANTEED RENEWAL
Applies to all size groups and individual insurance.
SPECIAL ENROLLMENT
If an employee has waived enrollment for themselves or their dependents because of other health insurance coverage, they may in the future be able to enroll themselves and/or their dependents in their company plan, provided that they request enrollment within 30 days after the other coverage ends and are eligible for the special enrollment.
In addition, if they waived enrollment for any reason and obtain a new dependent as a result of marriage, birth, adoption, or placement for adoption, they may be able to enroll themselves and their dependents, provided that they request enrollment within 30 days after the marriage, birth, adoption, or placement for adoption.
FMLA (Family and Medical Leave Act) [ Up to Top ]
OBJECTIVE
FMLA requires covered employers to provide up to 12 weeks of unpaid, job-protected leave to "eligible" employees for certain family and medical reasons.
ELIGIBILITY
Employees are eligible if they have worked for a covered employer for at least one year, and for 1,250 hours over the previous 12 months, and if there are at least 50 employees within 75 miles.
REASONS FOR TAKING LEAVE
Unpaid leave must be granted for any of the following reasons:
- to care for the employee’s child after birth, or placement for adoption or foster care;
- to care for the employee’s spouse, son or daughter, or parent, who has a serious health condition; or
- for a serious health condition that makes the employee unable to perform the employee’s job. At the employee’s or employer’s option, certain kinds of paid leave may be substituted for unpaid leave.
ADVANCE NOTICE AND MEDICAL CERTIFICATION
The employee may be required to provide advance leave notice and medical certification. Taking of leave may be denied if requirements are not met.
- The employee ordinarily must provide 30 days advance notice when the leave is "foreseeable."
- An employer may require medical certification to support a request for leave because of a serious health condition, and may require second or third opinions (at the employer’s expense) and a fitness for duty report to return to work.
JOB BENEFITS AND PROTECTION
- For the duration of FMLA leave, the employer must maintain the employee’s health coverage under any "group health plan."
- Upon return from FMLA leave, most employees must be restored to their original or equivalent positions with equivalent pay, benefits, and other employment terms.
- The use of FMLA leave cannot result in the loss of any employment benefit that accrued prior to the start of an employee’s leave.
UNLAWFUL ACTS BY EMPLOYERS
FMLA makes it unlawful for any employer to:
- interfere with, restrain, or deny the exercise of any right provided under FMLA;
- discharge or discriminate against any person for opposing any practice made unlawful by FMLA or for involvement in any proceeding under or relating to FMLA.
ENFORCEMENT
- The U.S. Department of Labor is authorized to investigate and resolve complaints of violations.
- An eligible employee may bring a civil action against an employer for violations. FMLA does not affect any Federal or State law prohibiting discrimination, or supersede any State or local law or collective bargaining agreement which provides greater family or medical leave rights.
FOR ADDITIONAL INFORMATION
Contact the nearest office of the Wage and Hour Division, listed in most telephone directories under U.S. Government, Department of Labor.
Texas State Continuation [ Up to Top ]
This
is to inform you of your rights to continue group health coverage if you,
your spouse, and/or your dependent child(ren) lose the coverage under this
plan due to a qualifying event and the planholder is subject to the state
law Texas State Continuation. Texas groups are usually subject to
this law if they have less than 20 employees.
QUALIFYING
EVENTS
A
qualifying event is any of the following events that causes you or a
dependent spouse or child to lose coverage under any of the Company’s
health plans:
-
A covered employee’s termination of employment for any reason other than gross misconduct
-
A reduction in hours to fewer than the number required for plan participation
-
A covered employee’s death
-
A covered employee’s divorce or legal separation from the spouse
-
A covered employee’s entitlement to Medicare under Title XVIII of the Social Security Act
-
A covered child’s loss of dependent status under the plan.
CONTINUATION
COVERAGE
If
you, your spouse, and/or your dependent child(ren) have a qualifying
event, you may continue the health coverage you had immediately before the
event occurred. However,
persons covered by Medicare under Title XVIII of the Social Security Act
or covered by this plan for less than 3 consecutive months on the day
before a qualifying event are not eligible to continue coverage.
HOW
DO I ELECT CONTINUATION OF COVERAGE?
Continuation of group coverage must be requested in writing together with the first contribution required to establish contributions on a monthly basis in advance within the later of:
-
31 days following the date the group coverage would otherwise terminate
-
The date the employee, member, or dependent is given notice of the right of continuation by either the employer or the group policyholder.
HOW
LONG CAN I CONTINUE COVERAGE?
In
general, you can continue coverage for up to 6 to 36 months, depending on
the qualifying event. If the
qualifying event is due to employment termination or reduction in hours,
the maximum period of time you may continue coverage is 6 months from the
date of the qualifying event. For
other qualifying events, the maximum period is 36 months.
WHAT
HAPPENS IN THE EVENT OF DEATH, DIVORCE, OR RETIREMENT?
If
previous eligibility for coverage under the health insurance policy ceases
due to the severance of the family relationship or the retirement or death
of the member of the group; and the family member or dependent has been a
member of the group for a period of at least one year or is an infant
under one year of age, they are eligible for 36months of continuation.
Notification of the event must be given in writing to the employer
within 15 days of the event. At
that time, the employer will notify the member of the cost for continuing
the plan. The cost is a total
of the cost of insurance per month plus an administrative fee of $5 per
month. The member has 60 days
from the qualifying event to remit any necessary forms and payment to the
employer.
CAN
THE COMPANY TERMINATE MY CONTINUATION COVERAGE BEFORE THE MAXIMUM COVERAGE
PERIOD ENDS?
The
Company can terminate a person’s continuation coverage before the
maximum coverage period ends for any of the following reasons:
-
Failure to make timely payments would terminate coverage
-
The date on which the group coverage terminates in its entirety
-
The date on which the covered person is or could be covered under Medicare
-
The date on which the covered person is covered for similar benefits by another hospital, surgical, medical, or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan or any other plan or program
-
The date the covered person is eligible for similar benefits whether or not covered therefore under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis
-
Similar benefits are provided or available to such person, pursuant to or in accordance with the requirements of any state or federal law.
DO
I HAVE TO PAY FOR CONTINUATION COVERAGE?
You
must pay the full cost of continuation coverage, plus 2% for the
Company’s administrative expenses.
We will include information on the current cost of continuation
coverage and the payment terms in notices to individuals who have a
qualifying event that we are aware of.
Please be aware that while you are on continuation, there could be
a change in the rates that are originally given.
If this occurs, you will be given notice of the rate change and
will be required to pay the difference.
WHAT
HAPPENS WHEN MY CONTINUATION EXPIRES?
Not
less than 30 days before the end of the six months after the date the
employee, member, or dependent elects continuation of the policy, the
insurer shall notify the participant that they may be eligible for
coverage under the Texas
Health Insurance Risk Pool. The
insurer shall provide the address for applying to the pool to the
participant.
©2004 James Zander & Associates, LLP