In 1986, an important piece of legislation was enacted into law, allowing employees to continue benefit coverage after employment ceased. Actually, the continuation of benefits was only a small part of the budget bill that came to be know as COBRA, short for Consolidated Omnibus Budget Reconciliation Act.
What’s important to know is COBRA can offer a safety net for someone facing the loss of health coverage. Under the law, COBRA allows an individual whose eligibility terminates to continue health plan coverage under certain circumstances. Key to understanding the provisions of COBRA are the terms Qualified Beneficiary and Qualifying Event.
As defined under COBRA, a Qualified Beneficiary is an individual who loses coverage under any of the Qualifying Events (described below). A Qualified Beneficiary can be an active employee, his spouse or dependent child.
If you are the Employee, Qualifying Events are:
- termination of employment, or
- a reduction in hours.
If you are the spouse or dependent child, Qualifying Events are the same as for the Employee, plus:
- the Employee’s death, or
- your divorce from the employee, or
- the dependent child no longer meeting the plan’s definition of “Dependent”.
If the Qualifying Event is a termination or reduction of hours, the Fund Office notifies you. If the Qualifying Event is a death, divorce or a child losing dependent status, the qualified beneficiary should notify the Fund Office.
The monthly premiums are set each March by the Board of Trustees and do not change for 12 months. The cost is determined by the type of coverage you elect and whether you are buying coverage for yourself or for both yourself and your family.
The duration of coverage can be from 18 to 36 months. Generally, coverage is for 18 months, but can be extended to 36 months if a second qualifying event occurs or to 29 months if Social Security determines that a qualified beneficiary is totally disabled.
The provisions of COBRA are too numerous and complex to fully cover in the space allotted here. For more information on your rights to elect COBRA Continuation Coverage, refer to your plan booklet or contact the Fund Office at (707) 864-2800 or toll-free at 1-800-244-4530 and ask for the COBRA section.
You may also email us at firstname.lastname@example.org.