Issue 1

Passed by Congress in July of 1986, the Consolidated Omnibus Budget Reconciliation Act (COBRA) requires a continuation of coverage to be offered to covered employees, their spouses, their former spouses, and their dependent children when group health coverage would otherwise be lost due to certain specific events, referred to as “qualifying events.”

There are three basic requirements that must be met for an individual to be entitled to elect COBRA continuation coverage:

1. The individual’s group health plan must be covered by COBRA.
2. A qualifying event must occur.
3. The individual must be a qualified beneficiary for that event.

*In certain circumstances, qualified beneficiaries entitled to 18 months of continuation coverage may become entitled to a disability extension of an additional 11 months (for a total maximum of 29 months), or an extension of an additional 18 months because of a second qualifying event (for a total maximum of 36 months).

This is an individual who was covered by a group health plan on the day before a qualifying event occurred that caused him or her to lose coverage. Only certain individuals can become qualified beneficiaries due to a qualifying event, and the type of qualifying event determines who can become a qualified beneficiary.

COBRA requires employers to provide a general notice describing COBRA rights to each employee and spouse who becomes covered under the group plan. This notice explains COBRA and the steps necessary for notifying the Plan Administrator of a qualifying event. Employers must provide the general notice within the first 90 days of coverage. If we are contracted to provide this service for you, we recommend that you submit the required information for processing within the first 60 days of coverage to ensure adherence to the COBRA-regulated timeline.

Before continuation coverage can be offered, a qualifying event must occur, and notification of the event must be provided within the COBRA-regulated time frame.

The employer is responsible for providing notification of all qualifying events to UPMC Benefit Management Services (as your acting COBRA administrator) within 30 days of the event. These events include:

• Termination or reduction in hours of employment of the covered employee.
• Death of the covered employee.
• A covered employee becoming entitled to Medicare.
• Bankruptcy of a private-sector employer.
• Divorce/Legal separation.*
• A child’s loss of dependent status under the plan.*

Failure to provide notification of these events to your acting COBRA administrator within 30 days of the event will result in non-compliance with COBRA regulations.

*For qualifying events of Divorce/Legal Separation and Loss of Dependent Child Status, it is the employee’s responsibility to provide notice to the employer of the event within 60 days. This 60-day period is counted from the later of (1) the date on which the qualifying event occurs, or (2) the date on which the employee loses coverage under the plan as a result of the qualifying event.

Once we receive your notice of a qualifying event, we are then responsible for providing the COBRA Election Notice to the qualified beneficiaries. This letter explains COBRA, indicates the plan(s) being offered, the associated monthly premium(s) and the election/enrollment procedures. We are required to provide this notice to the qualified beneficiaries within 14 days after receiving your notice of a qualifying event.

On occasion, you the employer may have the right to deny a request for continuation coverage. For example, if a spouse contacts you 90 days after his/her divorce with a request to continue coverage, you have the right to deny this request, because the person did not meet the 60-day deadline established by COBRA regulations for providing notification. In such a case, the Department of Labor requires the Plan Administrator to provide a notice stating that the request for continuation coverage was denied and the reason for the denial. This notice must be provided within 14 days after the request is received by the employer.