Group Health Continuation Coverage Under COBRA

Qualifying Events - Subscriber

If you are an employee of a Public Entity covered by a group health plan offered through the MCHCP, you have a right to choose this continuation coverage if you lose your group health plan coverage because of a reduction in your hours of employment or the termination of your employment (for reasons other than gross misconduct on your part).

Qualifying Events - Spouse

If you are the spouse of an employee covered by a group health plan offered through MCHCP, you have the right to choose continuation coverage for yourself if you lose group health coverage under a plan offered through MCHCP for any of the following reasons:

• The death of your spouse;
• A termination of your spouse's employment (for reasons other than gross misconduct) or reduction in your spouse's hours of employment;
• Divorce or legal separation from your spouse; or
• Your spouse becomes entitled to Medicare.

Qualifying Events - Dependent Children

In the case of a dependent child of an employee covered by a group health plan offered by MCHCP, he or she has the right to continuation coverage if group health coverage under a plan offered through MCHCP is lost for any of the following reasons:

• The death of the employee;
• A termination of the employee's employment (for reasons other than gross misconduct) or reduction in the employee's hours of employment;
• The employee's divorce or legal separation;
• The employee becomes entitled to Medicare; or
• The dependent child ceases to be a “dependent child” under MCHCP's eligibility rules.

Required Notifications

Under the law, the employee or a family member has the responsibility to inform MCHCP of a divorce, legal separation, or child losing dependent status under MCHCP within 60 days of the date of the event.

Your Public Entity has the responsibility to notify MCHCP of the employee’s death, termination, reduction of hours of employment or Medicare entitlement.

Election Period

When MCHCP is notified that one of these events has occurred, MCHCP notifies you that you have the right to choose continuation coverage. Under the law, you have at least 60 days from the date you would lose coverage because of one of the events previously described to inform MCHCP that you would want continuation coverage. The initial premium payment for continuation coverage must be received within 45 days of your election of that coverage.

If you choose continuation coverage, MCHCP is required to give you coverage which, at the time coverage is being provided, is identical to the coverage provided under the plan to similarly situated employees or family members.

If you do not choose continuation coverage on a timely basis, your group health insurance coverage ends and will not be reinstated.

If you have Medicare prior to becoming eligible for COBRA coverage, you are entitled to coverage under both. However, Medicare is always primary, and COBRA is secondary.

Your coverage with MCHCP shall terminate if any one of the following events occurs:

• You no longer meet the eligibility requirements set forth in this handbook including, without limitation, upon termination of the subscriber from employment; divorce or legal separation from the subscriber; or when a dependent child reaches the limiting age.
• You fail to pay required premiums. Note: In the event that the Plan has not received payment of premium at the end of the 31 day grace period, you will be retroactively terminated to the date covered by your last paid premium. You will be responsible for the value of services rendered after the retroactive termination date (including but not limited to the grace period).
• You knowingly misrepresent or giving false information on any enrollment form which is material to the Plan’s acceptance of such enrollment.
• You participate in fraudulent or criminal behavior, including but not limited to:
  • Performing an act or practice that constitutes fraud or intentionally misrepresenting material facts including using your identification card to obtain goods or services which are not prescribed or ordered for you or to which you are otherwise not legally entitled. In this instance, coverage for the subscriber and all dependents will be terminated.
  • Allowing any other person to use you your identification card to obtain services. If a dependent allows any other person to use his/her identification card to obtain services, the coverage of the dependent who allowed the misuse of the card will be terminated. If the subscriber allows any other person to use his/her identification card to obtain services, the coverage of the subscriber and his/her dependents will be terminated.
  • Threatening or perpetrating violent acts against the Plan or an employee of the Plan. In this instance, coverage for the subscriber and all dependents will be terminated.

If your coverage under this agreement is terminated under this section, all rights to receive covered services shall cease as of the date of termination.

Your coverage cannot be terminated on the basis of the status of your health or the exercise of your rights under the Plan’s grievance and complaint procedures. The Plan may not terminate an agreement solely for the purpose of effecting the disenrollment of an individual member for either of these reasons.

If the member receives covered services after the termination of coverage, the plan may recover the contracted charges for such covered services from you or the provider, plus its cost to recover such charges, including attorneys’ fees.

Under certain circumstances, members may be eligible for continuation of coverage benefits or to convert to another policy as described in the following section.

Length of Continuation Coverage

The law requires that you be afforded the opportunity to maintain continuation coverage for 36 months, unless you lost group health coverage because of a termination of employment or reduction in hours. In that case, the required continuation coverage period is 18 months. This 18 months may be extended for affected individuals to 36 months from termination of employment if other events (such as a death, divorce, legal separation, or Medicare entitlement) occur during the 18-month period.

In no event will continuation coverage last beyond 36 months from the date of the event that originally made a qualified beneficiary eligible to elect coverage. The 18 months may be extended to 29 months if a qualified beneficiary is determined by the Social Security Administration to be disabled (for Social Security disability purposes) at any time during the first 60 days of COBRA coverage. This 11-month extension is available to all individuals who are qualified beneficiaries due to a termination or reduction in hours of employment. To benefit from this extension, a qualified beneficiary must notify MCHCP of that determination within 60 days and before the end of the original 18-month period. The affected individual must also notify MCHCP within 30 days of any final determination that the individual is no longer disabled.

New Dependents

A child who is born to or placed for adoption with a covered member during a period of COBRA coverage, is eligible to become a qualified beneficiary. In accordance with the terms of MCHCP and the requirements of federal and state laws, these qualified beneficiaries can be added to COBRA coverage upon proper notification.

Termination of Continuation Coverage

The law also provides that continuation coverage may be cut short for any of the following reasons:

• Your public entity no longer provides group health coverage to any of its employees.
• The premium for continuation coverage is not paid on time.
• The qualified beneficiary becomes covered (after the date he or she elects COBRA coverage) under another group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition he or she may have.
• The qualified beneficiary becomes entitled to Medicare after the date he or she elects COBRA coverage.
• The qualified beneficiary extends coverage for up to 29 months due to disability and there has been a final determination that the individual is no longer disabled.

Premium Payment

Under the law, you are responsible for payment of all applicable premiums from the date coverage was initially lost, even if the election is made after that date. In addition to the normal premium, MCHCP charges a 2% administration charge for continuation coverage. Once the initial premium payment has been received, MCHCP bills you monthly. There is a grace period of 31 days for payment of the regularly scheduled monthly premiums.

Spousal Continuation Coverage (COBRA Wrap-Around)

Missouri law provides that if you lose your group health insurance coverage because of a divorce, legal separation, or the death of your spouse, you may continue until age 65 if:

• You continue and maintain coverage under the 36 month provision of COBRA, AND
• You are at least 55 years old when your COBRA benefits end.

Within 60 days of legal separation or the entry of a decree of dissolution of marriage or prior to the expiration of a 36 month COBRA period, the legally separated or divorced spouse who seeks such coverage shall give MCHCP written notice of the qualifying event including his/her mailing address. Within 30 days of the death of an employee whose surviving spouse is eligible for continued coverage, the payroll representative shall give MCHCP written notice of the death and the mailing address of the surviving spouse.

Within 14 days of receipt of the notice, MCHCP shall notify the legally separated, divorced, or surviving spouse that coverage may be continued. The notice shall include:

1. A form for election to continue the coverage;
2. The amount of premiums to be charged, the method and place of payment; AND
3. Instructions for returning the elections form by mail within 60 days after the plan administrator mails the notice.

The principal qualified beneficiary must apply for continuation coverage through the spousal continuation provisions and will have to pay all of the applicable premiums. MCHCP may charge up to an additional 25% of the applicable premium.

The right to continuation coverage shall terminate upon the earliest of any of the following:

• The failure to pay premiums when due, including any grace period allowed by the policy.
• The date that the Public Entity's insurance is terminated to all group members.
• The date on which the legally separated, divorced, or surviving spouse becomes insured under any other group health plan.
• The date on which the legally separated, divorced, or surviving spouse remarries and becomes insured under another group health plan.
• The date on which the legally separated, divorced, or surviving spouse attains his/her sixty-fifth birthday.