What is continuation coverage?
Federal law requires that most group health plans (including this Plan) give employees and their families the opportunity to continue their health care coverage when there is a “qualifying event” that would result in a loss of coverage under an employer’s plan. Depending on the type of qualifying event, “qualified beneficiaries” may include the employee (or retired employee) covered under the group health plan, the covered employee’s spouse, and the dependent children of the covered employee. Only those dependents that are covered by the Plan on the date of the qualifying event can be considered qualified beneficiaries for purposes of COBRA continuation coverage. More detailed information concerning who is a qualified beneficiary is contained in the COBRA section of your summary plan description (SPD).
Continuation coverage is the same coverage that the Plan gives to other participants or beneficiaries under the Plan who are not receiving continuation coverage. Each qualified beneficiary who elects continuation coverage will have the same rights under the Plan as other participants or beneficiaries covered under the Plan, including special enrollment rights, which are described in your SPD.
If you are eligible for retiree coverage from the Fund, please be aware that, when you retire, you have the option of electing COBRA continuation of your active coverage instead of retiree coverage. If you do not elect COBRA continuation coverage when you retire within the timeframes described in the COBRA Election Notice, you will no longer have any rights to COBRA continuation coverage, even if and when you lose your retiree coverage. However, if your spouse and/or dependent child(ren) who are covered under the retiree coverage experience a COBRA qualifying event while receiving retiree coverage (for example, if you die or get divorced), they will be entitled to continue the retiree coverage in accordance with COBRA for a period of up to 36 months from the date of the loss of retiree coverage.
This notice pertains to the coverage you have through the PFT Health and Welfare Fund which includes Dental, Optical, and Prescription Drug benefits. Information on your basic health care (hospitalization, medical, surgical) should come from the School District’s Benefits Office.
How long will continuation coverage last?
In the case of a loss of coverage due to end of employment or reduction in hours of employment, coverage generally may be continued only for up to a total of 18 months from the date of loss of coverage due to the qualifying event.
In the case of losses of coverage due to an employee’s death or divorce, the employee becoming entitled to Medicare benefits or a dependent child ceasing to be a dependent under the terms of the plan, coverage may be continued for a spouse and dependents who are qualified beneficiaries for up to a total of 36 months from the date of loss of coverage due to the qualifying event.
When the qualifying event is the end of employment or reduction of the employee’s hours of employment, and the employee became entitled to Medicare benefits less than 18 months before the qualifying event, COBRA continuation coverage for qualified beneficiaries other than the employee lasts until 36 months after the date of Medicare entitlement.
Continuation coverage will be terminated before the end of the maximum period if:
- any required premium is not paid in full on time,
- a qualified beneficiary becomes covered, after electing continuation coverage, under another group plan that does not impose any pre-existing condition exclusion for a pre-existing condition of the qualified beneficiary,
- a qualified beneficiary becomes entitled to Medicare benefits (under Part A, Part B, or both) after electing continuation coverage, or
- The plan ceases to provide any group coverage to active participants.
Continuation coverage may also be terminated for any reason the Plan would terminate coverage of a participant or beneficiary not receiving continuation coverage (such as fraud).
As shown in the COBRA Election Form attached to this notice, the maximum period of continuation coverage available to the qualified beneficiaries is 18 months. However, because the maximum period shown on the Election Notice is less than 36 months, the following describes how the COBRA continuation coverage period can be extended:
How can you extend the length of COBRA continuation coverage?
If you elect continuation coverage, an extension of the maximum period of coverage may be available if a qualified beneficiary is disabled or a second qualifying event occurs. You must notify the Fund Office of a disability or a second qualifying event in order to extend the period of continuation coverage. Failure to provide timely notice of a disability or second qualifying event may affect the right to extend the period of continuation coverage.
An 11-month extension of coverage may be available if any of the qualified beneficiaries is determined by the Social Security Administration (SSA) to be disabled. To be entitled to this extension, the disability has to have started at some time before the 60th day of COBRA continuation coverage and must last at least until the end of the 18-month period of continuation coverage. Each qualified beneficiary who has elected continuation coverage will be entitled to the 11-month disability extension if one of them qualifies. You must provide the Fund Office with written notice no later than 60 days after the later of (1) the date of the disability determination by the Social Security Administration or (3) the date on which the qualified beneficiary would lose coverage under the plan due to the qualifying event and before the end of the 18-month COBRA period. You must also provide a copy of the Social Security Administration Determination along with your notification.
If the qualified beneficiary is determined by the SSA to no longer be disabled, you must notify the Plan of that fact within 30 days after the Social Security Administration’s determination.
Second Qualifying Event
An 18-month extension of coverage will be available to spouses and dependent children who elect continuation coverage (and are qualified beneficiaries) if a second qualifying event occurs during the first 18 months of continuation coverage. The maximum amount of continuation coverage available when a second qualifying event occurs is 36 months. Such second qualifying events may include the death of a covered employee, divorce or separation from the covered employee, the covered employee’s becoming entitled to Medicare benefits (under Part A, Part B, or both), or a dependent child’s ceasing to be eligible for coverage as a dependent under the Plan (e.g., the child reaches the maximum age under the Plan or ceases to be a full-time student). These events can be a second qualifying event only if they would have caused the qualified beneficiary to lose coverage under the Plan if the first qualifying event had not occurred.
You must notify the Plan in writing within 60 days of the later of (1) the date of the relevant second qualifying event or (2) the date coverage would be lost under the plan as a result of the qualifying event if you want to extend your continuation coverage. This notice must be sent to the Fund Office and must contain the following information: your name, for which event you are providing notice and the date of the event, along with a copy of the supporting documentation (a copy of the divorce decree, a copy of a child’s birth certificate or other proof of age, a copy of the employee’s death certificate or a copy of the employee’s Medicare card).
How can you elect COBRA continuation coverage?
To elect continuation coverage, you must complete the Election Form and furnish it according to the directions on the form. Each qualified beneficiary has a separate right to elect continuation coverage. For example, the employee’s spouse may elect continuation coverage even if the employee does not. Continuation coverage may be elected for only one, several, or for all dependent children who are qualified beneficiaries. A parent may elect to continue coverage on behalf of any dependent children. The employee or the employee’s spouse can elect continuation coverage on behalf of all of the qualified beneficiaries.
In considering whether to elect continuation coverage, you should take into account that a failure to continue your group coverage will affect your future rights under federal law. First, you can lose the right to avoid having pre-existing condition exclusions applied to you by other group plans if you have more than a 63-day gap in coverage, and election of continuation coverage may help you not have such a gap. Second, you will lose the guaranteed right to purchase individual health insurance policies that do not impose such pre-existing condition exclusions if you do not get continuation coverage for the maximum time available to you. Finally, you should take into account that you have special enrollment rights under federal law. You have the right to request special enrollment in another group health plan for which you are otherwise eligible (such as a plan sponsored by your spouse’s employer) within 30 days after your group health coverage ends because of the qualifying event listed above. You will also have the same special enrollment right at the end of continuation coverage if you get continuation coverage for the maximum time available to you.
How much does COBRA continuation coverage cost?
Generally, each qualified beneficiary may be required to pay the entire cost of continuation coverage. The amount a qualified beneficiary may be required to pay may not exceed 102 percent (or, in the case of an extension of continuation coverage due to a disability, 150 percent) of the cost to the group health plan (including both employer and employee contributions) for coverage of a similarly situated plan participant or beneficiary who is not receiving continuation coverage. The required payment for each continuation coverage period for each option is described in this notice.
When and how must payment for COBRA continuation coverage be made?
First payment for continuation coverage
If you elect continuation coverage, you do not have to send any payment with the Election Form. However, you must make your first payment for continuation coverage not later than 45 days after the date of your election. (This is the date the Election Notice is post-marked, if mailed.) If you do not make your first payment for continuation coverage in full not later than 45 days after the date of your election, you will lose all continuation coverage rights under the Plan. Your first payment must cover the cost of continuation from the time your coverage under the Plan would have terminated up to the time you make your first payment. You are responsible for making sure that the amount of your first payment is correct. You may contact the Fund Office to confirm the correct amount of your first payment.
Periodic payments for continuation coverage
After you make your first payment for continuation coverage, you will be required to make periodic payments for each subsequent coverage period. The amount due for each coverage period for each qualified beneficiary is shown in this notice. The periodic payments can be made on a monthly basis. Under the Plan, each of these periodic payments for continuation coverage is due on the due date of the month for that coverage period. The Plan will not send periodic notices of payments due for these coverage periods; it is your responsibility to make sure that the Fund Office receives your payment by the deadline. If you make a periodic payment on or before the due date for the month to which it applies, your coverage under the Plan will continue for that coverage period without any break.
Grace periods for periodic payments
Although periodic payments are due by your due date, you will be given a grace period of 30 days after the due date to make each periodic payment. Your continuation coverage will be provided for each month as long as payment for that month is made before the end of the grace period for that payment. However, if you pay a periodic payment later than the due date for the month to which it applies, but before the end of the grace period for the coverage period, your coverage under the Plan will be suspended and then retroactively reinstated (going back to the first day of the coverage period) when the periodic payment is received. This means that any claim you submit for benefits while your coverage is suspended may be denied and may have to be resubmitted once your coverage is reinstated.
If you fail to make a periodic payment before the end of the grace period for that coverage period, you will lose all rights to continuation coverage under the Plan.
Your first payment and all periodic payments for continuation coverage should be sent to:
PFT Health and Welfare Fund Office
1816 Chestnut Street
Philadelphia, PA 19103
Telephone – (215) 561-2722
Fax – (215) 561-8345
For more information
This notice does not fully describe continuation coverage or other rights under the Plan. More information about continuation coverage and your rights under the Plan is available in your summary plan description or from the Plan Administrator.
If you have any questions concerning the information in this notice, your rights to coverage, or if you want a copy of your summary plan description, you should the Fund Office at the phone number or address above.
For more information about your rights under COBRA, the Health Insurance Portability and Accountability Act (HIPAA), and other laws affecting group health plans, contact the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) in your area or visit the EBSA website at www.dol.gov/ebsa. (Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA’s website.)
Keep Your Plan Informed of Address Changes
In order to protect your and your family’s rights, you should keep the Plan Administrator informed of any changes in your address and the addresses of family members. You should also keep a copy, for your records, of any notices you send to the Plan Administrator.