COBRA Continuation of Coverage

COBRA, a federal law, allows you and your eligible dependents to continue health care coverage for a limited period at your own expense under certain circumstances when health coverage would otherwise end under the terms of the Plan because of a qualifying event. COBRA continuation coverage is offered to each person who is a qualified beneficiary. A qualified beneficiary is someone who will lose coverage under the Plan because of a qualifying event. Depending on the type of qualifying event, participants, spouses or former spouses of participants and dependent children of participants may be qualified beneficiaries. Qualified beneficiaries who elect COBRA continuation coverage must pay premiums on a monthly basis. The amount of the premium due is included in the COBRA Election Notice sent by the Trust after a qualifying event has occurred.

You do not have to prove that you are in good health to choose COBRA continuation coverage, but you do have to meet the Plan’s COBRA eligibility requirements and you must apply for and pay for such coverage. Also, please note your COBRA rights are subject to change. 

Coverage will be provided only as required by law. If the laws change your rights will change accordingly. You and your dependents may each choose independently whether or not to continue coverage under COBRA.

COBRA continuation of coverage includes all current health benefits for active participants and their dependents provided you are enrolled under Medical, Dental and Prescription Drug at the time of your loss of coverage. It does not include Life Insurance or Accidental Death and Dismemberment benefits.

A COBRA participant can continue coverage only under the options he/she was enrolled in as of the date his/her coverage would have otherwise ended. He/she can change their coverage options only during the Trust’s regular annual Open Enrollment period.  For example, someone enrolled in the Kaiser Permanente medical option as of the date his coverage would otherwise end, can continue coverage only under the Kaiser Permanente option until the next annual Open Enrollment period.  Exceptions are made only if someone enrolled in a Health Maintenance Organization (HMO) moves out of the service area.

The monthly premium rates depend on the Plan(s) you were enrolled in at the time of termination of your coverage. The amount of the premium due is included in the COBRA Election Notice sent by the Trust after a qualifying event has occurred. 

Call the Administrative Office to verify the receipt of your COBRA payment.

The duration of COBRA coverage depends on the reason for termination of eligibility. For example, if the loss of coverage is due to a lack of hours worked; COBRA coverage lasts up to 18 months. COBRA coverage for a divorce or a death, however, is up to a maximum of 36 months. For more information on how long you can pay COBRA, refer to your Summary Plan Description booklet or contact the Administrative Office.

As a result of health care reform (the Affordable Care Act; commonly referred to as “Obamacare”), health care coverage is available to most individuals and families through the Health Insurance Marketplace. We recommend people losing coverage under the Trust check out the coverage available to them through the Marketplace as an alternative to enrolling in the Trust’s COBRA continuation coverage.

The Marketplace offers “one-stop shopping” to find and compare private health insurance options.  In the Marketplace, you could be eligible for a new kind of tax credit that lowers your monthly premiums and cost-sharing reductions (amounts that lower your out-of-pocket costs for deductibles, coinsurance, and copayments) right away, and you can see what your premium, deductibles, and out-of-pocket costs will be before you make a decision to enroll.  Through the Marketplace you’ll also learn if you qualify for free or low-cost coverage from Medicaid or the Children’s Health Insurance Program (CHIP).  You can access the Marketplace for your state at www.HealthCare.gov

Coverage through the Health Insurance Marketplace may cost less than COBRA continuation coverage. Being offered COBRA continuation coverage won’t limit your eligibility for coverage or for a tax credit through the Marketplace.

If you sign up for COBRA continuation coverage, you can switch to a Marketplace Plan during a Marketplace Open Enrollment period. You can also end your COBRA continuation coverage early and switch to a Marketplace Plan if you have another qualifying event such as marriage or birth of a child through something called a “special enrollment period.”  But be careful though—if you terminate your COBRA continuation coverage early without another qualifying event, you’ll have to wait to enroll in the Marketplace coverage until the next Open Enrollment period, and could end up without any health coverage in the interim. 

Once you’ve exhausted your COBRA continuation coverage and the coverage expires, you’ll be eligible to enroll in the Marketplace coverage through a special enrollment period, even if the Marketplace Open Enrollment has ended. For more information go to www.HealthCare.gov.

Please Note:

  1. If you sign up for the Marketplace coverage instead of COBRA continuation coverage, you cannot switch to COBRA continuation coverage under any circumstances. 
  2. If you do not submit a completed Election Form and remit payments according to the due dates stipulated in your COBRA notice, you will lose your right to elect COBRA continuation coverage.
  3. If you elect COBRA continuation coverage but later you decide to drop it, you cannot re-enroll in COBRA continuation coverage at a later date.

One of the changes required by the Affordable Care Act (ACA) is the “individual shared responsibility” provision, which requires that just about everyone have a minimum level of coverage or pay a penalty starting on January 1, 2014. Your health insurance coverage can come from your (or your spouse’s) employment, through a policy you buy on your own, or through a government-sponsored program like Medicare or Medicaid. Information on the individual shared responsibility provision can be found on the following websites:

“Questions and Answers on the Individual Shared Responsibility Provision”

“Individual Shared Responsibility Provision—Calculating the Payment”

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