COBRA continuation coverage rights

This notice contains important information about your right to continue your health care coverage and other health coverage alternatives that may be available through the Health Insurance Marketplace.

What is continuation coverage?

Federal law requires that most group health plans - including this plan - give employees and their eligible dependents 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' can include the current or retired employee covered under the group health plan, the covered employee’s spouse, and the dependent children of the covered employee.

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 open enrollment and special enrollment rights.

For questions and more information about The Consolidated Omnibus Budget Reconciliation Act of 1985, COBRA, visit the Arizona Department of Administration COBRA webpage or the Centers for Medicare and Medicaid COBRA FAQ webpage.

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 for up to a total of 18 months. In the case of losses of coverage due to an employee’s death, divorce or legal separation, the employee’s 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 up to a total of 36 months.

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. This notice shows the maximum period of continuation coverage available to the qualified beneficiaries.

Continuation coverage will be terminated before the end of the maximum period under the following circumstances:

• Any required premium is not paid in full on time.
• A qualified beneficiary becomes covered, after electing continuation coverage, under another group health plan that does not impose any pre-existing condition exclusion for a pre-existing condition of the qualified beneficiary. Note: there are limitations on plans’ imposing a preexisting condition exclusion and such exclusions will become prohibited beginning in 2014 under the Affordable Care Act.
• A qualified beneficiary becomes entitled to Medicare benefits - under Part A, Part B or both - after electing continuation coverage.
• The employer ceases to provide any group health plan for its employees.

Continuation coverage may also be terminated for any reason the plan would terminate coverage of participant or beneficiary not receiving continuation coverage, e.g. fraud.

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 Member Services at 602-542-5008 or 800-304-3687 of a disability or a second qualifying event in order to extend the period of continuation coverage. Failure to provide notice of a disability or second qualifying event may affect the right to extend the period of continuation coverage.

Disability

An 11-month extension of coverage may be available if any of the qualified beneficiaries is determined by the Social Security Administration to be disabled. 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.

You or another member of your family must notify the ADOA Benefit Services Office of the disability determination by the Social Security Administration before the end of the 18-month COBRA coverage period. Each qualified beneficiary who has elected continuation coverage will be entitled to the 11-month disability extension if one of them qualifies. If the qualified beneficiary is determined by SSA to no longer be disabled, you must notify the plan of that fact within 30 days after SSA’s determination.

Second qualifying event

An 18-month extension of coverage will be available to spouses and dependent children who elect continuation coverage 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’s child ceasing to be eligible for coverage as a dependent under the plan.

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 within 60 days after a second qualifying event occurs if you want to extend your continuation coverage.

How can you elect COBRA continuation coverage?

To elect continuation coverage, you must complete the State of Arizona Benefit Options COBRA Enrollment Form and finish 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 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 enrollment form. However, you must make your first payment for continuation coverage not later than 45 days after the date of your election. If mailed, this is the date the election notice is postmarked. COBRA begins the day after your active coverage ends and is not effective until payment is made. 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. You are responsible for making sure that the amount of your first payment is correct.

You may contact Member Services at 602-542-5008 or 800-304-3687 to confirm the correct amount of your first payment.

Make your first payment by check or money order out to: ADOA – HITF for continuation coverage
Send payments to:
Arizona Department of Administration – Benefit Services
c/o COBRA
100 N. 15th Ave., #103
Phoenix, AZ 85007

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 first day for that coverage period. You may instead make payments for continuation coverage for the following coverage periods, due on the following dates: If you make a periodic payment on or before the first day of the coverage period to which it applies, your coverage under the plan will continue for that coverage period without any break. Billing statements are mailed as a courtesy.

If you do not receive a bill, you may call Member Services at 602-542-5008 or 800-304-3687 for assistance.

Send all periodic payments for continuation coverage to:
Arizona Department of Administration – Health Insurance Trust Fund
100 N. 15th Ave., #202
Phoenix, AZ 85007

Grace periods for periodic payments
Although periodic payments are due on the dates shown above, you will be given a grace period of 30 days after the first day of the coverage period to make each periodic payment. Your continuation coverage will be provided for each coverage period as long as payment for that coverage period is made before the end of the grace period for that payment.

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.

Plan Administrator
Arizona Department of Administration – Benefit Options
100 N. 15th Ave., #103
Phoenix, AZ 85007
Phone: 602-542-5008 or 800-304-3687

Declining COBRA coverage

To decline COBRA coverage, return the COBRA enrollment form with the “I decline COBRA coverage” option marked. COBRA coverage will not be available to you once it is declined.

If you fail to return an enrollment form, your right to COBRA coverage will expire after 60 days from the date on this notice.

For questions and more information, visit the Arizona Department of Administration COBRA webpage or the Centers for Medicare and Medicaid COBRA FAQ webpage.

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, contact:

Arizona Department of Administration – Benefit Services Office
100 N. 15th Ave., #103
Phoenix, AZ 85007
Phone: 602-542-5008 or 800-304-3687

For more information about your rights under COBRA, the Health Insurance Portability and Accountability Act and other laws affecting group health plans, visit the U.S. Department of Labor’s Employee Benefits Security Administration website or call 866-444-3272.

There may be other coverage options for you and your family. When key parts of the health care law take effect, you will be able to buy coverage through the Health Insurance Marketplace. In the marketplace, you could be eligible for a new kind of tax credit that lowers your monthly premiums right away, and you can see what your premiums, deductibles and out-of-pocket costs will be before you make a decision to enroll. Being eligible for COBRA does not limit your eligibility for coverage or a tax credit through the marketplace.

Additional details
Health insurance options available through a Health Insurance Marketplace.

You also may qualify for a special enrollment opportunity for another group health plan for which you are eligible, such as a spouse’s plan, even if the plan generally does not accept late enrollees, as long as you request enrollment within 30 days of loss of other coverage.

Keep your plan informed of address changes

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.

Questions?

Member Services
602-542-5008
800-304-3687