This section contains important information about your right to COBRA continuation coverage, which is a temporary extension of coverage under the Williams College Group Insurance Plan. This section generally explains COBRA continuation coverage, when it may become available to you and your family, and what you need to do to protect the right to receive it. This section applies only to the following benefits: Health Insurance Benefit, Extended Outpatient Mental Health Benefit, Dental Insurance Benefit, MERA, and Employee Assistance Program. For this section, each of these benefits will be referred to as the “plan.”
The right to COBRA continuation coverage was created by a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA continuation coverage can become available to you when you would otherwise lose your group health coverage under the plan. It can also become available to other members of your family who are covered under the plan when they would otherwise lose their group health coverage.
What is COBRA Continuation Coverage?
COBRA continuation coverage is a continuation of plan coverage when coverage would otherwise end because of a life event known as a “qualifying event.” Federal law requires that the plan give employees and their families the opportunity to elect COBRA continuation coverage when there is a “qualifying event.” Specific qualifying events are listed later in this section. After a qualifying event, COBRA continuation coverage must be offered to each person who is a “qualified beneficiary.” You, your spouse, and your dependent children could become qualified beneficiaries if coverage under the plan is lost because of the qualifying event. Under the plan, qualified beneficiaries who elect COBRA continuation coverage must pay for COBRA continuation coverage.
COBRA 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 any special enrollment rights.
If you do not choose COBRA continuation coverage, your coverage under the plan will end with the date you would otherwise lose coverage.
If you are an employee, you will become a qualified beneficiary if you lose your coverage under the plan because either one of the following qualifying events happens:
- Your hours of employment are reduced, or
- Your employment ends for any reason other than your gross misconduct.
If you are the spouse of an employee, you will become a qualified beneficiary if you lose your coverage under the plan because any of the following qualifying events happens:
- Your spouse dies;
- Your spouse’s hours of employment are reduced;
- Your spouse’s employment ends for any reason other than his or her gross misconduct;
- Your spouse becomes entitled to Medicare benefits (under Part A, Part B, or both); or
- You become divorced or legally separated from your spouse.
Your dependent children will become qualified beneficiaries if they lose coverage under the plan because any of the following qualifying events happens:
- The parent-employee dies;
- The parent-employee’s hours of employment are reduced;
- The parent-employee’s employment ends for any reason other than his or her gross misconduct;
- The parent-employee becomes entitled to Medicare benefits (Part A, Part B, or both);
- The parents become divorced or legally separated; or
- The child stops being eligible for coverage under the plan as a “dependent child.”
Sometimes, filing a proceeding in bankruptcy under title 11 of the United States Code can be a qualifying event. If a proceeding in bankruptcy is filed with respect to the college, and that bankruptcy results in the loss of coverage of any retired employee covered under the plan, the retired employee will become a qualified beneficiary with respect to the bankruptcy. The retired employee’s spouse, surviving spouse, and dependent children will also become qualified beneficiaries if bankruptcy results in the loss of their coverage under the plan.
When COBRA Coverage Is Available
The plan will offer COBRA continuation coverage to qualified beneficiaries only after the Plan Administrator has been notified that a qualifying event has occurred. When the qualifying event is the end of employment or reduction of hours of employment, death of the employee, commencement of a proceeding in bankruptcy with respect to the employer, or the employee’s becoming entitled to Medicare benefits (under Part A, Part B, or both), the employer must notify the Plan Administrator of the qualifying event.
You Must Give Notice of Some Qualifying Events
For the other qualifying events (divorce or legal separation of the employee and spouse or a dependent child’s losing eligibility for coverage as a dependent child), you must notify the Plan Administrator within 60 days after the qualifying event occurs. You must provide this notice in the manner specified below in “How to Provide Notices to the Plan Administrator.”
How COBRA Coverage Is Provided
Once the Plan Administrator receives notice that a qualifying event has occurred, COBRA continuation coverage will be offered to each of the qualified beneficiaries. Each qualified beneficiary will have an independent right to elect COBRA continuation coverage. Covered employees may elect COBRA continuation coverage on behalf of their spouses, and parents may elect COBRA continuation coverage on behalf of their children.
How long COBRA Coverage Will Last
COBRA continuation coverage is a temporary continuation of coverage. When the qualifying event is the death of the employee, the employee’s becoming entitled to Medicare benefits (under Part A, Part B, or both), your divorce or legal separation, or a dependent child’s losing eligibility as a dependent child, COBRA continuation coverage lasts 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. For example, if a covered employee becomes entitled to Medicare 8 months before the date on which his employment terminates, COBRA continuation coverage for his spouse and children can last up to 36 months after the date of Medicare entitlement, which is equal to 28 months after the date of the qualifying event (36 months minus 8 months). Otherwise, when the qualifying event is the end of employment or reduction of the employee’s hours of employment, COBRA continuation coverage generally lasts for only up to a total of 18 months.
There are two ways in which the 18-month period of COBRA continuation coverage can be extended:
Disability extension of 18-month period of continuation coverage
If you or anyone who is a qualifed beneficiary covered under the plan is determined by the Social Security Administration (SSA) to be disabled following an employee’s temination of employment of reduction of hours and any qualified beneficiary notifies the Plan Administrator in a timely fashion, you and each qualified beneficiary may be entitled to receive up to an additional 11 months of COBRA continuation coverage, for a total maximum of 29 months. Each qualified beneficiary who has elected continuation coverage will be entitled to the 11-month disability extension if one of them is determined by SSA to be disabled. The disability would have to have started at some time before the 60th day of COBRA continuation coverage and must last at least until the first day of continuation coverage. You must notify the Plan Administrator of a disability in order to extend the period of continuation coverage. You must notify the Plan Administrator of the disability within 60 days after the the date of SSA’s disability determination and before the date that the qualified beneficiary loses, or would lose, plan coverage as a result of a qualifying event. Failure to provide notice of a disability may affect the right to extend the period of COBRA continuation coverage. If the qualified beneficiary is determined by SSA to no longer be disabled, you must notify the Plan Administrator of that fact within 30 days after SSA’s determination. You must provide the two notices described in this paragraph in the manner specified below in “How to Provide Notices to the Plan Administrator.”
Second qualifying event extension of 18-month period of continuation coverage
If your family experiences another qualifying event while receiving 18 months of COBRA continuation coverage, your spouse and dependent children in your family can get up to 18 additional months of COBRA continuation coverage, for a maximum of 36 months, if notice of the second qualifying event is properly given to the Plan Administrator. This extension may be available to the spouse and any dependent children receiving continuation coverage if the employee or former employee dies, becomes entitled to Medicare benefits (under Part A, Part B, or both), or gets divorced or legally separated, or if the dependent child stops being eligible under the plan as a dependent child, but only if the event would have caused the spouse or dependent child to lose coverage under the plan had the first qualifying event not occurred. In order to extend the period of COBRA continuation coverage, you must notify the Plan Administrator of a second qualifying event within 60 days after the later of the date the second qualifying event occurs or the date you would lose coverage on account of the qualifying event. Failure to provide notice of a second qualifying event may affect the right to extend the period of continuation coverage. You must provide this notice in the manner specified below in “How to Provide Notices to the Plan Administrator.”
COBRA continuation coverage will be terminated before the end of the maximum period if:
- any required premium is not paid in full on time,
- a qualified beneficiary becomes covered, after electing COBRA 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,
- a qualified beneficiary becomes entitled to Medicare benefits (under Part A, Part B, or both) after electing COBRA continuation coverage, or
- the college 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 a participant or beneficiary not receiving continuation coverage (such as fraud).
Electing COBRA continuation coverage
To elect continuation coverage, you must complete the election form that you will receive and furnish it according to the directions on the form. You have 60 days from the date you would lose coverage for one of the reasons described above or the date you are sent notice of your right to elect continuation coverage, whichever is later, to inform the Plan Administrator that you wish to continue coverage. Failure to return the election form within the 60-day period will be considered a waiver, and you will not be allowed to elect continuation coverage.
Each qualified beneficiary has a separate right to elect COBRA 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 COBRA continuation coverage, you should take into account that a failure to continue your group health coverage will affect your future rights under federal law. First, you can lose the right to avoid having pre-existing condition exclusions applied to you by other group health plans if you have more than a 63-day gap in health coverage, and election of continuation coverage may help you not have such a gap. Second, you will lose the guaranteed right to purchase individual health insurance policies that do not impose such pre-existing condition exclusions if you do not get continuation coverage for the maximum time available to you. Finally, 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 will be required to pay the entire cost of COBRA 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 plan (including both employer and employee contributions) for coverage of a similarly situated plan participant or beneficiary who is not receiving continuation coverage.
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 election form. However, you must make your first payment for continuation coverage not later than 45 days after the date of your election. (This is the date the election notice is post-marked, if mailed.) If you do not make your first payment for continuation coverage in full within 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.
- 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 periodic payments can be made on a monthly basis. 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.
- Grace periods for periodic payments
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.
How COBRA Applies to the Medical Expense Reimbursement Account (MERA)
COBRA permits you and other qualified beneficiaries to continue to participate in the MERA through the end of the calendar year after a qualifying event occurs only if, as of the date of the qualifying event, you are entitled to receive a MERA benefit during the remaining portion of the calendar year that is greater than the maximum amount (the COBRA premium) that the MERA would be permitted to require you to pay for the remaining portion of the calendar year. For example, assume you elect to deduct $100 per month ($1200 per year) under the MERA. Assume further that as the date of a qualifying event on May 31 you have submitted $300 of reimbursable expenses. The MERA would be required to offer COBRA to you because your remaining annual maximum MERA benefit of $900 ($1200 – $300) is greater than the $714 (7 months x 1/12 of annual premium of $1200 x 102%) charge permitted by COBRA for your MERA coverage for the remaining portion of the calendar year. If, instead, however, you had submitted $1,000 of reimbursable expenses, you would not be entitled to elect COBRA for the MERA. Please contact the Plan Administrator for more information on how COBRA applies to the MERA.
How to Provide Notices to the Plan Administrator
You must provide notices to the Plan Administrator, in writing, in the following manner:
- Who May Provide the Notice: The covered employee, or anyone who is a qualified beneficiary with respect to the qualifying event, or a representative acting on behalf of the covered employee or the qualified beneficiary.
- Send by mail or deliver the notice to:
Williams College Office of Human Resources
100 Spring Street, Suite 201
Williamstown, MA 01267
- The notice must contain:
- The name of the plan;
- The name of the employee covered by the plan, and the name of any spouse or dependent covered by the plan;
- The date of the qualifying event (or, if applicable, the date of: a second qualifying event, the SSA determination of disability, or the SSA determination of end of disability);
- The type of qualifying event (divorce, legal separation, dependent child’s loss of eligibility) or second qualifying event (for example, death of former employee), or a statement that SSA has determined a certain individual to be disabled or no longer disabled;
- The current address of the covered employee and, if they have addresses different than the covered employee, the current addresses of the covered spouse and covered dependents; and
- The name and signature of the person providing the notice.
If you are notifying the Plan Administrator that SSA has determined an individual to be disabled, you must include with the notice a copy of the SSA’s determination of disability.
Keep the Plan Informed of Address Changes
In order to protect your and your family’s rights under COBRA, 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.
This SPD does not fully describe COBRA continuation coverage or other rights under the plan. More information about continuation coverage and your rights under the plan is available from the Plan Administrator. Additionally, for more information about your rights under COBRA, contact the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) in your area or visit the EBSA website at www.dol.gov/ebsa. (Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA’s website.)
Although continuation coverage is not required to be offered under COBRA to employees’ domestic partners, the college will provide continuation coverage similar to COBRA to employees’ same-sex domestic partners. This continuation coverage will be under terms similar to those that apply under COBRA to a married employee’s spouse. Please contact the Plan Administrator for more details.