Issue 13

COBRA administration Disability extensions and second qualifying events

People frequently ask whether they can extend their COBRA continuation coverage. The answer is yes—in two specific circumstances for a person entitled to an 18-month maximum period of COBRA continuation coverage:

  1. One of the qualified beneficiaries is disabled.
  2. A second qualifying event occurs.

Disability extensions

If any of the qualified beneficiaries in a family are disabled and meet the requirements below, all qualified beneficiaries who are receiving continuation coverage because of a single qualifying event are entitled to an 11-month extension of their continuation coverage (for a total maximum period of 29 months of continuation coverage).

The requirements are:

  1. The Social Security Administration (SSA) determines that the qualified beneficiary is disabled before the 60th day of continuation coverage.
  2. The disability continues during the rest of the initial 18-month period of continuation coverage.

In addition, the disabled qualified beneficiary (or someone on their behalf) must also notify the COBRA plan administrator of the SSA disability determination. To provide notice, a copy of the SSA Disability Award Letter must be provided to the COBRA plan administrator. The plan can set a time limit for providing this notice, but it cannot be shorter than 60 days, starting from the latest of:

  • The date SSA issues the disability determination.
  • The date the qualifying event occurs.
  • The date the qualified beneficiary loses (or would lose) coverage under the plan as a result of the qualifying event.
  • The date the qualified beneficiary is informed of the responsibility to notify the plan administrator and the process for doing so. (The qualified beneficiary may be informed of this responsibility via the plan’s SPD or the COBRA General Notice.)

If the qualified beneficiary meets all requirements, then the 11-month extension will be approved. The plan can charge the qualified beneficiary an increased premium, up to 150 percent of the cost of coverage, during the 11-month disability extension. In such cases, the COBRA administrator would retain the standard 2 percent COBRA fee, and the additional 48 percent would be remitted back to the employer.

The right to the 11-month disability extension can be terminated if SSA determines that the qualified beneficiary is no longer disabled.

Second qualifying events

If a qualified beneficiary receiving an 18-month maximum period of continuation coverage experiences a second qualifying event, they may be entitled to an additional 18-month extension of their coverage continuation (for a total of 36 months of continuation coverage, counted from the original first day of COBRA). These are second qualifying events:

  • Death of the covered employee
  • Divorce or legal separation of the covered employee and spouse
  • Medicare entitlement
  • Loss of dependent child status under the plan

The event can be a second qualifying event only if it would have caused the qualified beneficiary to lose coverage under the plan in the absence of the first qualifying event.

The plan must have procedures for how a qualified beneficiary should provide notice of a second qualifying event, and these procedures should be described in the plan’s SPD. Again, the plan can set a time limit for providing this notice, but it cannot be shorter than 60 days from the latest of:

  • The date on which the qualifying event occurs.
  • The date on which the qualified beneficiary loses (or would lose) coverage under the plan as a result of the qualifying event.
  • The date the qualified beneficiary is informed of the responsibility to notify the plan administrator and the process for doing so. (The qualified beneficiary may be informed of this responsibility via the plan’s SPD or the COBRA General Notice.)

Of course, both extensions are still subject to early termination of coverage continuation. The plan may terminate continuation coverage earlier than the end of the maximum period for any of the following reasons:

  • Premiums are not paid in full on a timely basis.
  • The employer ceases to maintain any group health plan.
  • A qualified beneficiary begins coverage under another group health plan after electing continuation coverage.
  • A qualified beneficiary becomes entitled to Medicare benefits after electing continuation coverage.
  • A qualified beneficiary engages in fraud or other conduct that would justify terminating coverage of a similarly situated participant or beneficiary not receiving continuation coverage.

If continuation coverage is terminated early, the plan administrator must provide the qualified beneficiary with an early termination notice.

If you have any questions, our team of dedicated COBRA analysts will be more than happy to assist you. Feel free to contact your dedicated account analyst at any time, or the COBRA Department in general at COBRA@upmc.edu.

Reporting on reports

A menu of standard spending account reports is available to employers. Each report has helpful information that provides insight to your company’s spending accounts. Standard reports are available on the UPMC Consumer Advantage employer portal, and additional reports can be added to your report menu on a schedule or can be emailed by request.

Let’s take a look at the available reports, starting with health savings accounts specific reports. Here is a typical Reports tab on the employer portal: