Decatur County Community Schools
Administrative Guidelines
 

4421 - FEDERAL GROUP HEALTH CONTINUATION (COBRA)

Qualifying Event

 

A.

A covered employee shall be offered the opportunity to continue the School Corporation’s group health coverage if the employee loses coverage under the Plan upon either of the following "qualifying events":

   
 

1.

voluntary or involuntary termination of employment for reasons other than "gross misconduct"

   
 

Gross misconduct may be intentional, wanton, willful, deliberate, reckless, or in deliberate indifference to the Corporations interests. It is misconduct beyond mere minor breaches of employee standards, but conduct which would be considered gross in nature.

   
 

2.

reduction in the number of hours of employment

   
 

B.

The spouse of a covered employee may continue the Corporation’s group health coverage if the spouse loses coverage under the Plan because of any of the following "qualifying events":

   
 

1.

termination of the covered employee’s employment for any reason other than "gross misconduct"

   
 

2.

reduction in the hours worked by the covered employee

   
 

3.

divorce or legal separation with the covered employee

   
 

Also, if the employee reduces or eliminates group health coverage in anticipation of divorce or legal separation, then divorce or legal separation may be considered to be a qualifying event even though the spouse’s coverage was reduced or eliminated prior to the divorce or legal separation.

   
 

4.

death of the covered employee

     
 

C.

Dependent children may continue the group health coverage if the dependent child loses coverage under the Plan because of any of the following "qualifying events":

   
 

1.

termination of covered employee’s employment for any reason other than "gross misconduct"

   
 

2.

reduction in the hours worked by the covered employee

   
 

3.

loss of "dependent child" status under the Plan rules

   
 

Under the Patient Protection and Affordable Care Act, the Plan must offer coverage for an adult child until the child attains age twenty-six (26).

   
 

4.

divorce or legal separation of the covered employee

   
 

5.

death of the covered employee

Notification by Qualified Beneficiaries

Qualified beneficiaries are required to notify the Plan Administrator of the following qualifying events in order to be eligible for COBRA continuation coverage: (a) divorce or legal separation of the employee and spouse; and (b) loss of eligibility for coverage of a dependent child. The qualified beneficiary is required to notify the Plan Administrator in writing of these events within sixty (60) days of the later of: (a) the date of the qualifying event; or (b) the date on which the qualified beneficiary loses (or would lose) coverage under the terms of the Plan as a result of the qualifying event. Failure to comply with these rules will result in forfeiture of any COBRA continuation coverage.

COBRA Election

Qualified beneficiaries are required to elect COBRA continuation coverage within the sixty (60) day election period set forth in the Plan’s COBRA election notice. Qualified beneficiaries have the right to elect to continue coverage that is identical to the coverage provided under the Plan. If a COBRA beneficiary does not elect COBRA continuation coverage within the sixty (60) day election period, then the COBRA beneficiary will forfeit his/her right to elect COBRA.

Other Options for Qualified Beneficiaries

In lieu of electing COBRA continuation coverage, qualified beneficiaries may wish to pursue coverage through the health insurance marketplace established by the Patient Protection and Affordable Care Act ("ACA"). In some cases, individuals may receive significant subsidies towards the cost of coverage under the health insurance marketplace. These subsidies may make ACA marketplace coverage significantly less expensive than COBRA continuation coverage. Qualified beneficiaries may also wish to explore whether coverage under another employer group health plan or Medicaid is possible.

Termination of COBRA Coverage

COBRA continuation coverage generally lasts for eighteen (18) months. For example, if coverage is lost because of termination of employment or reduction of hours, the employee generally may elect COBRA for a maximum of eighteen (18) months.

However, there are a few exceptions to this rule. If Plan coverage was lost as a result of death of an employee, divorce or legal separation, or loss of eligibility for coverage as a dependent child, COBRA coverage can continue for a maximum of thirty-six (36) months. If a qualified beneficiary is determined under Tile II or Title XVI of the Social Security Act to have been disabled before the sixtieth (60th) day of continuation coverage and the qualified beneficiary properly notifies the Plan Administrator of the disability determination, the eighteen (18) month period is expanded to twenty-nine (29) months. If a second qualifying event occurs while receiving COBRA coverage and the qualified beneficiary properly notifies the Plan Administrator, COBRA coverage may continue for a maximum of thirty-six (36) months.

COBRA coverage under a health flexible spending account can last only until the end of the year in which the qualifying event occurred.

Coverage for qualified beneficiaries may end prior to the end of the maximum coverage period if:

 

A.

premiums are not paid on a timely basis;

   
 

B.

Corporation ceases to maintain the group health plan;

   
 

C.

coverage is obtained with another employee group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition (note that the Patient Protection and Affordable Care Act eliminated pre-existing exclusion conditions in most groups health plans);

   
 

D.

a qualified beneficiary becomes entitled to Medicare benefits;

   
 

E.

during a disability extension period, the disabled qualified beneficiary is determined by the Social Security Administration to be no longer disabled.

A qualified beneficiary is required to notify the Corporation in writing if the qualified beneficiary becomes eligible for Medicare or becomes covered under another group health plan. In addition, if a disabled qualified beneficiary is determined by the Social Security Administration to no longer be disabled, the qualified beneficiary must notify the Corporation of the fact within thirty (30) days after the Social Security Administration’s determination.

Revised 1/14/15
Revised 4/12/17

© Neola 2016