COBRA

APPENDIX F

COBRA

This federal law, referred to as COBRA, affects employers with twenty (20) or more employees. It allows those persons enrolled in an employer’s group health care contract the right to continue their coverage under the employer’s group health plan beyond the date that it might otherwise terminate.

Coverage may be continued as indicated below:

THE QUALIFYING EVENTS

As an employee of the Catholic Diocese of Spokane covered either by Group Health, Medical Service Corporation or Washington Dental Service, you and your spouse have a right to continue coverage if:

1. You lose your health coverage because of a reduction in hours or you are terminated (for reasons other than gross misconduct on your part.)

As the spouse of an employee of the Catholic Diocese of Spokane covered by Group Health, Medical Service Corporation or Washington Dental Service, you have the right to continue coverage for yourself if you lose health coverage for any of the following reasons:

         1.     Your spouse dies;
2.     Your spouse stops working (for reasons other than gross misconduct)
         or reduces hours of employment;
3.      Divorce or legal separation from your spouse; or
4.      Your spouse becomes entitled to Medicare benefits.

A covered dependent child of an employee of the Catholic Diocese of Spokane may continue coverage if health coverage is lost for any of the following reasons:

         1.      The death of a parent;
2.      The employee terminates employment (for reasons other than gross misconduct) or reduced
         hours of employment with the Catholic Diocese of Spokane;
3.      The parents divorce or legally separate;
4.      The employee/parent becomes entitled to Medicare; or
5.      The child ceases to be an “eligible dependent child.”

NOTICES REQUIRED

Under the law, you or a family member has the responsibility to inform the Catholic Diocese of Spokane of a divorce, legal separation, or a child’s loss of dependent status under Group Health, Medical Service Corp. or Washington Dental. You must inform the Catholic Diocese of Spokane sixty (60) days of the later event or the date on which coverage would otherwise end because of the event in order to be eligible for continued health coverage. In addition, in the event of the birth or adoption of a child after the qualifying event, you must notify the Catholic Diocese of Spokane of the employee’s death, termination of employment or reduction in work hours, or Medicare entitlement.

Similar rights may apply to certain retirees, spouses and dependent children if the Catholic Diocese of Spokane begins bankruptcy proceedings and these individuals lose coverage.

COBRA ELECTION PERIOD

When the Catholic Diocese of Spokane is notified that one of these events has occurred, you will be notified of your right to continue coverage. Under the law, you have at least sixty (60) days from the date you would lose coverage because of one of the events described above to inform the Catholic Diocese of Spokane that you want continuation of coverage. The 60 days starts with the later of the qualifying event or the date of the administrator’s election notice.

If you do not elect to continue coverage within 60 days, your health insurance will end at the end of the month of your termination.

DESCRIPTION AND MAXIMUM LENGTH OF COBRA COVERAGE

If you continue coverage, you will receive coverage identical to that provided under the plan for similarly situated employees or family members. You may continue coverage for 36 months unless you have lost health coverage because of termination of employment or reduction in hours. In that case, the maximum continuation coverage period is 18 months.

If you are covered for an 18-month period (due to termination or a reduction in hours) and a second event occurs that would also qualify you for continued coverage, you may extend coverage to 36 months. A second event includes death of spouse, divorce, legal separation, or Medicare entitlement.

The 18-month period may also be extended if, at any time of the qualifying event or during the first 60 days of COBRA coverage (effective January 1, 1997 ), you were disabled (as determined by Social Security.) Your coverage period may be extended from 18 months to a maximum of 29 months. To obtain these extended 11 months of benefits you must notify the Catholic Diocese of Spokane of Social Security’s determination of disability within 60 days of the date the determination is made and before the initial 18 months of COBRA coverage ends. The extension will end if during the 11-month period a final determination is made by Social Security that you are no longer disabled. You must notify the Catholic Diocese of Spokane within 30 days of any final determination that you are no longer disabled.

In no event will continuation coverage last beyond 3 years (36 months) from the date of the original qualifying event. The 36 months is counted from the first qualifying event.

The law provides that your continuation of coverage may end for any of the following reasons:

         1.     The Catholic Diocese of Spokane no longer provides health coverage to any employee,
2.     You do not pay the premium for your continued coverage by the required deadline,
3.     You become covered under another group health plan, which has no
        pre-existing condition exclusions or limitations that apply to you (effective January, 1, 1997 ).
4.     You become entitled to Medicare benefits,
5.     Your maximum continuation period (18, 29 or 36 months) ends; or
6.     There has been a final determination by Social Security that you are no longer disabled, and
        you have completed at least 18 months of COBRA coverage (this applies only to those who
        are qualified for an 11 month period.)

You do not have to show that you are insurable to choose continuation coverage. However, COBRA coverage is provided subject to your eligibility for coverage. The Catholic Diocese of Spokane reserves the right to terminate your COBRA coverage retroactively if you are determined to be ineligible.

PREMIUM PAYMENTS

The premium you will be charged will not be more that 102% of the total cost of providing coverage. The premium for a Social Security disabled person can be as much as 150% of the cost of coverage for the 19th through 29th months of coverage.

You will be notified of the cost of continuing benefits if you experience a qualifying event. You will have 45 days from the election date to pay the first premium; after that, premiums will be due and payable once each month. You will have a 30-day grace period to pay each monthly premium. The first premium should cover premiums due from the date you lost coverage through the date you elected COBRA. Any monthly premium that becomes due during the 45 day period is payable at the end of the 45 day period.

FUTURE CHANGES IN BENEFITS AND PREMIUM

If the Catholic Diocese of Spokane changes any regular health plan benefits during your continuation period, your coverage will also be changed in the same manner. Your required monthly premiums may also change during your continuation period in the manner allowed by law*. You will be notified of any changes in benefits and/or rates during your continuation period.

* Note: Premiums may change only once in the determination year of the plan (once every 12 months.) Prop. Reg % 1.162.26,Q.45

IF YOU DO NOT ACT BY THE ELECTION DEADLINE

If you or your dependents do not complete the Election Form and return it to the Diocese/Parish within 60 days of receiving the Election Form/Notice of COBRA Rights (or within 60 days of the Qualifying Event if that is later), you and your dependents will lose your right to elect continuation coverage.

At the end of COBRA coverage, you may be eligible for an individual conversion policy under your present health insurance. This depends on whether such conversion policies are otherwise available to members of the group at that time or your state requires conversion policies be available. The cost and benefits of the conversion policy may be different from those under COBRA.

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