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COBRA:  The Rest of the “To Do” List

By Lesley Sifers, Tax Favored Benefits, Inc.

This article will cover changes to notice requirements under COBRA as well as new notice requirements included in the final regulations.  By now, you should have started to review your Summary Plan Description (SPD) to ensure that it complies with new rules.  In addition, if you included any COBRA information in an employee handbook, be sure that gets updated as well.  Here is a rundown of changes to old notices and content for new ones:

“General Notice” (formerly referred to as “Initial Notice”)

The new rules establish minimum content and timing requirements.  DO NOT use the old DOL model notice – this will no longer be considered “good faith” compliance.  The initial notice must be sent within 90 days of the effective coverage date.  A new model notice is available at http://www.dol.gov/ebsa/regs/fedreg/final/2004011796.htm.  Review it carefully since it includes some statements that may not apply to you.

“Notice of Qualifying Event”

The Department of Labor (DOL) has provided a model notice and election form at their website.  The new rules require that a lot more information be included in this notice.  For example, you must now explain:

·        that each qualified beneficiary can elect coverage independently;

·        that the employee (or spouse) can make the election on behalf of the qualified beneficiary;

·        the consequences of failure to elect or waive continuation coverage;

·        any alternative coverage options the qualified beneficiaries may have.

New notice requirements cover specific situations.  There are no model notices for these and the DOL does not intend to create any.  The following NEW notices are required under final regulations:

“Notice of Unavailability”

This letter is sent when COBRA coverage does not apply.  For example, a former employee on COBRA gets divorced and notifies you that a court order mandates her/him to provide health insurance coverage for an ex-spouse.  However, the spouse was never covered under your group plan.  You must notify the employee, in writing, within 14 days of receiving notice, that coverage is not available.  In this example, the spouse was never a qualified beneficiary and would not have COBRA election rights.

“Notice of Early Termination”

This is sent to qualified beneficiaries when their coverage will end prior to the maximum COBRA coverage period.  In my experience, the most common reason for early termination is failure to pay premiums within the prescribed grace periods.  Other reasons include Medicare eligibility, employer’s discontinuance of the health insurance plan and, in some cases, change in status of a dependent.

The above notices/letters are “requirements” but you should not forget that any person who is on COBRA must be treated like an employee covered under your health plan.  That means they may have rights at an open enrollment period and, if plan provisions or premiums change, they should be notified just as you would notify your employees.

One thing the new regulations clarified was the method of delivery for notices and letters.  Electronic delivery gets a thumbs-up along with the good, old United States Postal Service.  Handing a notice to a departing employee is NOT acceptable.  If you intend to use e-mail for delivering notices, be sure to set up a file to keep those “sent” items.  Mailing notices by certified mail does provide proof of delivery.

COBRA has generated a lot of work for attorneys over the years.  Most cases hinge on whether or not the required notices were provided to the qualified beneficiary(ies) in the proper format, within appropriate timeframes.  The typical scenario seems to be that a person who had the right to COBRA didn’t take the coverage and then has a terrible accident or medical condition that costs thousands of dollars.  At this point, an attorney gets involved and tries to prove that the qualified beneficiary was not properly notified of his/her rights.  To the court’s credit, employers seem to prevail in most cases but, as you well know, even when you win in court, you lose.

The spirit of these COBRA changes seems to be to improve communication with people who have continuation rights or who elect to continue coverage in your group plan.  While these new rules add more administrative burden for employers, after studying the requirements, there is a lot here that could help you avoid a lawsuit – if you do things properly.  The regulations offer more guidance than has been given since 1986 and that’s a good thing!

If you have questions on this topic or any personnel matter, please contact me at the HR Help Line.  Please call 800-683-3440 or e-mail lesley@taxfavoredbenefits.com.

 

COBRA and the SPD

By Lesley Sifers, Tax Favored Benefits, Inc.

SPD stands for “Summary Plan Description” (SPD).  You are required by law to provide this document to participants in many kinds of group benefit plans including health plans, cafeteria or flexible benefit plans, and retirement plans.  The SPD is supposed to be written in language that can be easily understood by the average person.  Unfortunately, that requirement has resulted in lengthy documents that are redundant, repetitive and boring and are seldom read by the average person unless he/she perceives a problem and takes the SPD to an attorney. 

COBRA regulations are specific about what must be discussed in the group plan SPD.  The following information must be included:

·        Information about qualifying events

·        Definition of qualified beneficiaries

·        Premiums 

·        Notice and election requirements

·        Duration of coverage

·        Procedures for both qualified beneficiaries and employers

·        Duration of coverage

·        Circumstances that would lead to loss, reduction or denial of coverage

The SPD must also explain how other laws such as HIPAA, FMLA and Medicare entitlement might affect COBRA coverage.  In addition, all SPDs must contain the following paragraph:

 “ERISA provides that all plan participants shall be entitled to:  Continue health care coverage for yourself, spouse or dependents if there is a loss of coverage under the plan as a result of a qualifying event.  You or your dependents may have to pay for such coverage.  Review this summary plan description and the documents governing your plan on the rules governing your COBRA continuation rights.”

The SPD is likely to take some time to finalize because normally it is a document provided by your group plan provider.  They may use a “boilerplate” document that does not really fit your situation.  For example, if you are not required to comply with FMLA, ask the provider to customize the SPD to your situation by removing any FMLA language.  In some cases, the SPD has been used in court to require an employer to provide a benefit to which an employee would not otherwise have been entitled.

Employees have won many court cases by maintaining they never received the required SPD for their health or retirement plan.  Employers lose those cases when they have no proof that they distributed the required SPD.

Practical Tip:  Require your employees to sign-off on receipt of any important document – employee handbooks, SPDs for health and retirement plans, etc.  When distributing updated documents to everyone, take a few minutes to call a short meeting and explain what the document is and why the employee should read it.  Tell them who to contact with questions. Prepare a dated checklist, specifying what document is being distributed, with employee names already listed.  All you are asking the employee to do is sign the list indicating that they have received the document.

I’m still studying the new COBRA requirements and will discuss additional elements of the new regulations in the next issue of The Retailer.  I hope you have contacted your health insurance carrier by now because that SPD may, as already stated, take some time.  Remember, even though the SPD must include detailed information about COBRA, it is not a substitute for the required, specific COBRA notices.

If you would like to research this topic in more detail, the DOL website has extensive information about SPD requirements.  In addition, you are always welcome to call me on the HR HelpLine at 800-683-3440 or via e-mail at lesley@taxfavoredbenefits.com.

 

New COBRA Requirements
By Lesley Sifers, Tax Favored Benefits, Inc.

     The new COBRA regulations, originally proposed in May 2003, are now finalized.   These new rules take effect on the first day of the first plan year beginning after November 26, 2004.  So, calendar year plans must be in compliance on January 1, 2005.

     The new rules create two new notice requirements, establish time limits for providing notices and specify what information must be included in the notices.  On the plus side, the new rules provide much needed guidance to employers as well as some useful model notices.  On the down side, the new obligations make the COBRA process more complicated and add new administrative burdens.

     Before discussing the changes, here is a review of some COBRA basics:

     Employers who have 20 or more employees on at least 50 percent of regular business days during the preceding calendar year and who offer certain kinds of group health plans must comply.  All full-time and part-time employees, even those not enrolled in any group health plans, count.  However, part-time employees only count as fractional employees based upon hours worked.   For example, a part time employee averaging 20 hours a week counts as one-half of an employee.

     Employers who are subject to COBRA must allow employees and dependents (called “qualified beneficiaries”) covered under group health plans the opportunity to continue in those plans following certain events (called “qualifying events”) that would normally cause the employee and/or dependents to lose coverage.  Group health plans are broadly defined to include not only traditional medical coverage but dental, vision and prescription plans as well.  Medical flexible spending accounts (also called medical reimbursement accounts) and cafeteria plans that offer medical benefits are also considered group health plans.  Employer-sponsored programs that simply encourage good health, such as a fitness program, would not be covered under COBRA.

     A qualifying event is an event that causes a covered employee and/or the employee’s covered dependents to lose coverage under the group health plan(s).  Some examples of qualifying events are:

·        Termination of employment including discharge, resignation, retirement, layoff, strike or lockout;

·        Reduction in hours below the minimum threshold for plan participation;

·        Death, divorce or legal separation of a covered employee;

·        Loss of dependent status under the terms of the group plan(s).

     The changes to COBRA apply to notice obligations and notice periods, and provide a new set of model notices that employers may choose to use.  Here is a rundown of those requirements:

  1. Initial notice (now referred to as “general notice”) – sent to employees and covered dependents at their home address(es).  Must be sent within 90 days after coverage under the plan begins.  Use the new model notice customized to your plan.  DO NOT use the old model notice.
  2. Qualifying event notice – sent to qualified beneficiaries when there is an event that triggers COBRA eligibility.  Must notify each qualified beneficiary within 14 days.   A new model notice is available.
  3. Notices that plan administrators must provide to qualified beneficiaries include the election notice and two new notices:  a “notice of termination” when coverage is ending and a “notice of unavailability” if continuation coverage is denied for any reason.

     A description of COBRA rights must also be included in the Summary Plan Description (SPD).  This may mean that your SPD must be revised to include a “detailed and easily understood” description that includes information about qualifying events, qualifying beneficiaries, premiums, notices, election requirements and duration of coverage.  The SPD should also explain how other laws affect COBRA, including HIPAA, FMLA and Medicare entitlement, as well as the newly passed Trade Assistance Act.   There also is special, required ERISA language that must be included.

     In my next couple of articles, I will discuss COBRA and its myriad of requirements in more detail.  For now, you need to review all of your current procedures and notices, as well as your SPD to determine what changes are needed.  Your group plan providers should be able to help you with this – especially concerning the SPD – so be sure to meet with their representative(s). 

     You can also research this online and obtain the model notices at the Department of Labor website: www.dol.gov.

     Other helpful websites are: www.onque.com,  www.ebia.com and http://benefitslink.com.   Note:  COBRA changes were first proposed in 2003 and the initial proposals were published and analyzed, so there are a lot of articles on the web that are out of date.  Be sure you are looking at information on the regulations when they were finalized on July 25, 2004.

 

COBRA Revisited: The Snake is Awake
By Lesley Sifers, Tax Favored Benefits, Inc.

     It has been 17 years since the passage of the Combined Omnibus Budget Reconciliation Act of 1985. Commonly known as COBRA, this legislation requires employers with 20 or more employees who provide/offer health benefits, to allow employees and qualified beneficiaries to continue health benefits (continuation coverage) after an event that would otherwise cause loss of coverage.  COBRA applies to Medical Reimbursement Accounts in a cafeteria plan, as well as to fully or partially insured health plans.   In addition, all but a handful of states have COBRA-like laws that apply to employers who are too small to be covered by the federal law.

     In brief, COBRA requires covered employers to extend health benefits for a period of time (18-36 months, depending upon the situation) to covered persons who lose benefits due to employment changes, loss of eligibility, divorce, death, etc.   To be in compliance, employers must provide specific notices to employees and family members at various times and within certain timeframes.  The Department of Labor (DOL) created “model notices” that most employers have used for years.   Failure to provide appropriate notices is punishable by significant fines for each day of non-compliance.

     Since 1985, nothing much has changed – the snake has been slumbering and we were all feeling pretty comfortable.  Now, however, the DOL has decided to revise the compliance requirements (i.e. add more paperwork for you).  This is probably in response to numerous lawsuits where former employees/dependents asserted they were not properly advised of their rights at the proper time.  While changes will take effect January 1, 2004, it is not clear what the new requirements will be except for the fact that at least two more required notices have been added.

     What should you do right now?  Here’s a little “to do” list:

·        Contact your health carrier or third party administrator (for cafeteria plans and self-insured plans) to see what assistance they can offer.

·        Review all Summary Plan Descriptions (SPD) since many employers use this as the “initial” COBRA notice.  Make sure they are up-to-date and that all employees have a copy.

·        If you are using the old DOL model notices, be prepared to STOP!  They will no longer be considered “good faith” compliance.

·        Review your recordkeeping procedures to ensure that you can prove that every employee has received all required notices in the past.

·        Consider subscribing to a newsletter or other service to keep abreast of developments. (There are several good ones available online at no cost.)

·        Familiarize yourself with your state’s continuation coverage requirements.  These laws often trip up the small employer who does not fall under the federal law.

     Remember the old Scout motto:  Be Prepared.  The snake is awake and could be ready to strike you.  It’s a lot cheaper to prevent a snake’s bite than to treat it.  You will be safer if you take some time now to review your COBRA procedures.

     I will continue to closely follow this development and hope to create a COBRA compliance kit that will be available for a reasonable fee.   If you would be interested in purchasing such a tool, please email me at lesley@taxfavoredbenefits.com and I will put you on a contact list – there is no obligation on your part.

 

The Combined Omnibus Budget Reduction Act of 1985
Better Known as “COBRA”
By Lesley Sifers, Tax Favored Benefits, Inc.

     Access to group health insurance is a common fringe benefit for American workers.  Recent surveys show that employees today remain increasingly concerned about getting and keeping adequate, yet affordable, health coverage.  Over the past year, growing unemployment has brought the issue of access to health insurance into the headlines with a political slant.  New legislation continues to be debated, along with amendments and expansions of existing regulations.  Currently, the two major Acts related to health insurance benefits are the Combined Omnibus Budget Reduction Act of 1985 (COBRA) and HIPAA.

     COBRA requires employers with 20 or more employees to offer continuation of group health and dental insurance (at group rates), to employees and/or their dependents who lose coverage for a variety of reasons.  Under COBRA, the employee pays 100 percent of the group premium and the employer is allowed to charge an additional 2 percent to cover administrative costs.  Medical reimbursement accounts in a cafeteria plan are also subject to COBRA continuation rights.

     Each covered person, not just the employee, has the right to separately elect COBRA continuation coverage.  For example, if an employee gets divorced, the employer must notify the former spouse that he or she is losing health insurance coverage and has the right to elect continuation coverage.  Likewise, dependent children who “age-out” of a group health plan also have continuation rights.  The length of coverage is from 18 to 36 months, depending on the particular event that triggers loss of insurance.

     COBRA outlines various notification requirements and timeframes that the employer must follow.  The rules are complex and, in some areas, vague.  For example, failure to provide the proper notices to employees and dependents or to observe specified timeframes can result in stiff fines to the employer.  Due to the high potential of costly administrative errors, COBRA administration procedures should remain in writing and any actions related to COBRA matters should be well documented.

     Most states have enacted COBRA-like laws that apply to small employers not covered under federal law.  Iowa, Illinois, Kansas, Minnesota, Missouri and Nebraska all have state laws that apply to employers not covered under the Federal requirements. These state laws do not always mirror Federal COBRA requirements.  For example, in most cases, the period of continuation is less than 18 months.  In certain situations, an individual not enrolled in the group plan for at least three months is not eligible for continuation.

     Employee complaints to the Department of Labor concerning COBRA violations continue to increase.  A large percentage of complaints allege that the employer failed to provide notice of COBRA rights to a covered person.  This type of complaint often arises when a person who loses coverage later incurs medical expenses.  Without documentation, the employer often finds it impossible to prove that notice was, in fact, provided.

     Another problem arises when the employer fails to offer COBRA to an employee who is discharged for “gross misconduct.”  The regulations specify that COBRA does not have to be offered to an employee fired for such reason(s).  Even though the concept of gross misconduct comes up frequently in employment law, there is no standard, legal definition of the term.  Whether or not conduct meets a standard of “gross misconduct” is most commonly decided in legal proceedings according to the specifics of the case.  No matter how outrageous the employee’s conduct might seem to you, it will seldom be judged “gross misconduct” by the courts.

     The awful truth about employment law is that the EMPLOYER IS GUILTY UNTIL PROVEN INNOCENT!

     The ultimate responsibility for COBRA compliance (state and federal) remains with the employer.  Do not assume that your insurance carrier, broker or agent will take care of this for you.  That is seldom true.  Check with your carrier and find out what, if anything, they provide to help with compliance.  For your own protection against complaints and fines, you need to have a comprehensive process and procedures for complying with federal and state COBRA regulations.  This includes developing proper notices, communication and documentation procedures, as well as training all managers in basic COBRA compliance requirements.

     If you would like more information about requirements in your state, assistance with developing a COBRA compliance system or an assessment of your current methods and procedures, please contact your Association office for a referral to the Tax Favored Benefits, Inc. HR HelpLine.

 

COBRA vs. State Continuation
By Jenni Walters, Group Insurance Manger

We all know that when an employee terminates employment, we need to offer them continuation of their health insurance. However, it is important to understand the different types of continuation, as well as the other reasons that continuation may apply.

A different set of rules applies for each type of continuation. Therefore, it is extremely important to know what type of continuation applies at your dealership. The following is a brief summary of each type of continuation available.

 

 

COBRA

 Iowa State Continuation
Applies To Employers with 20 or More Employees
(For 50% or more of the previous year.)		 Employer with Less Than 20 Employees
(For 50% or more of the previous year.)
Qualifying Event
  • Termination or Reduction of Hours
  • Divorce
  • Death of an Employee
  • Employee Becoming Entitled to Medicare
  • Dependent Child Ceasing to be Dependent
  • Termination
  • Divorce
Length of Continuation 18 Months – Termination or Reduction of Hours
29 Months – If disabled
36 Months – All others		 9 Months
Coverages that may be Continued Medical and Dental Medical Only
Employer Notifies Plan Administrator
(In case of termination of employment, death of employee, or Medicare entitlement.)		 30 Days 30 Days
Employee/Dependent Notifies Plan Administrator
(In case of divorce/loss of dependent eligibility.)		 60 Days 30 Days
Notification to Employee of Continuation Right
(After notification to plan administration.)		 14 days 10 Days
Employee Election Period 60 Days 31 Days/10 Days in case of Divorce
Administrative Charge Allowed 2% None

As you can see, there are some differences between each type of continuation. The government places heavy penalties on those who fail to comply, so it is important to properly administer continuation notification to your employees. The Association is revising the current continuation form and will forward new ones to you shortly. If you have any questions regarding continuation, please call the Association.

 

Medicare and You
By Jenni Walters, Group Insurance Manager

If you are like most people, you may not know what to do when you become eligible for Medicare. And, like many others, you want to know how to handle it if you are eligible for group health insurance.

Medicare is divided into two parts: Hospital Insurance (Part A) and Medical Insurance (Part B). Part A helps pay for care in a hospital or a skilled nursing facility, and for home health and hospice care. Part B helps pay for doctor bills, outpatient hospital care and other medical services not covered by Part A.

You do not have to pay a monthly premium for Part A if you or your spouse worked at least 10 years in a Medicare-covered employment, and you are 65 years old and a citizen or permanent resident of the United States. Certain younger disabled persons and kidney dialysis and transplant patients also qualify for premium-free Part A.

If you do not qualify for premium-free Part A, you may buy it if you are at least 65 years old and meet certain requirements. You may also buy part A if you are under age 65, were once entitled to Medicare under the disability provisions and still have the same disability but your benefits were ended because of your work and earnings.

Everyone who enrolls in Medicare Part B must pay a premium. Most enrolled have it deducted from their monthly Social Security check. You are automatically enrolled in Part B when you become entitled to premium-free Part A, unless you state you don’t want the coverage. Even if you do not qualify for premium-free part A, you generally can buy Part B if you are 65 or older.

The initial enrollment period for Part B and Part A, if you meet the requirements to purchase Part A, runs for seven months beginning three months before the month in which you turn 65. If you do not enroll during your initial 7-month enrollment period, you will have to wait until the next "general enrollment period." These enrollment periods are held each year, from January 1 through March 31. Your Medicare coverage begins the following July 1.

In some cases, you can delay enrolling in Part B without having to pay higher premiums. Specifically, if you are 65 or older and have group health insurance based on you or your spouse’s current employment, you have a choice as to when to enroll. You may enroll while you are covered by the group plan or you can wait and enroll during a special 8-month enrollment period. Coverage begins the month you or your spouse stops working or when you are no longer covered under the employer plan, whichever comes first. If you do not enroll during this period, you will have to wait until Medicare’s next general enrollment period.

Even if you continue to work after you turn 65, you should at least sign up for Part A. Part A may help pay some of the costs not covered by the employer plan. It may not, however, be a good idea to sign up for Part B at the same time. You would have to pay the monthly Part B premium and the Part B benefits would be of limited value to you as long as the employer plan is the primary payer of your medical bills. Moreover, you would start your Medigap open enrollment period. This is a period of time during which you can buy the Medigap policy of your choice.

Medigap coverage is a type of health insurance that can be purchased from private insurers and is regulated by state and federal law. It is specifically designed to supplement Medicare coverage. State and federal laws guarantee that for a period of six months from the date you are both enrolled in Medicare Part B and age 65 or older, you have a right to buy the Medigap policy of your choice, regardless of any health problems you may have. The company can, however, impose the same pre-existing condition restrictions that apply to Medigap policies sold outside the open enrollment period.

If you are covered under an employer group health plan when you become eligible for Part B at age 65, carefully consider your options. Once you enroll in Part B, the six-month Medigap open enrollment period starts and cannot be extended or repeated.

Federal law requires that an employer of 20 or MORE employees (defined as an employer who has 20 or more employees, including part-time employees, for each working day in each of 20 or more calendar weeks in the current or preceding year) offer any active full-time employees age 65 and older, and insured dependent spouses of active full-time employees, the option of electing (1) your group plan or (2) Medicare as their primary coverage. If an employee/dependent chooses your group plan, it is primary and Medicare will supplement the benefits of your group plan. If an employee/dependent chooses Medicare, the law prohibits your group plan from supplementing Medicare. An employee/dependent who elects Medicare as primary coverage can no longer be covered by your group plan.

If an employer has fewer than 20 employees, Medicare will be the primary carrier and your group plan will be secondary. Your group plan will integrate benefits with Medicare. This plan is not a Medicare supplement. Individuals who have Medicare as their primary health insurance coverage should be sure to enroll in both Part A and Part B. (Failure to enroll in both Parts A and B of Medicare will result in incomplete coverage.)

If you are covered under an employer plan that is primary to Medicare in paying your medical bills, you will not need a Medigap plan until you are no longer covered under the employer plan. If you begin buying Part B as a supplement to your employer plan while it is the primary payer, you will start your Medigap open enrollment period when it is of little use to you.

You may, therefore, want to wait to buy Part B until you are ready to make optimum use of your Medigap open enrollment period. Also, keep in mind that if you already triggered your Medigap open enrollment period at age 65, you cannot get another one by dropping Part B and re-enrolling during a special enrollment period after you are no longer covered under the employer plan.

Of course, this information cannot answer all of your questions. Contact your local Social Security office if you have any questions regarding Medicare. Each state also offers insurance counseling by trained counselors. The counselors will generally be able to answer your questions about Medicare and private insurance to supplement your Medicare benefits. These services are free. The telephone numbers are as follows: Iowa - (800) 351-4664 and Nebraska - (402) 471-2201.

 

Students and Insurance
By Jenni Walters, Group Insurance Manager

That time of year is here when children graduate from high school and/or college. Birthdays are abundant and parties are endless. We hope our children do well in their new endeavors and make the right decisions. With everything going on, the last thing on our minds is insurance. However, it is a very important issue that needs to be addressed.

I have received a lot of questions from insureds about the procedures when a dependent turns 19, goes to college, or graduates from college. The flowchart below should be an easy reference to whether a dependent is eligible between the ages of 19 and 24. Please copy it and keep it handy.

Due to the way Federated’s computer operates, you’ll notice that the dependent will come off the bill the 1st of the month prior to their 19th birthday. However, they are actually covered until the end of their birth month. I know this is confusing, but we all know how computers operate. Despite the confusion, there is a good side - it’s like getting the last month free!

When a child turns 19, they are still eligible for coverage if they are registered for college full-time or become disabled. For these purposes, a disabled dependent is defined as 19 or more years old and incapable of self-sustaining employment due to mental or physical handicap, provided coverage on this plan began prior to age 19. An application and proof of disability are required within 30 days of their 19th birthday.

If a dependent over age 19 is registered for college full-time, they are eligible for coverage. A full-time student is defined as attending an accredited school and enrolled with a minimum of 12 credit hours or the equivalent in a vocational school. Within 30 days of the dependent’s 19th birthday, you should contact the claims office to notify them of student status.

Once the dependent is covered as a student, there are several events that can cause them to become ineligible for coverage. Please notify the claims office of these changes, with the exception of #3.

1. Drops to part-time status
2. Gets married
3. Turns 24
4. Graduates

Keep in mind the requirements for a dependent over the age of 19 are unmarried, full-time college student and under the age of 24.

If a student begins a quarter or semester full-time and drops to part-time after it begins, they are no longer eligible for coverage. However, they will remain covered until the end of the quarter or semester. An exception to this rule is: if a student only needs 3, 4, 5, etc. hours in their last semester to graduate, and they are continuing on from a previous load of 12 hours or more, they will be eligible for coverage that semester.

The question also came up whether students are covered during the summer months. If the student knows when he or she completes the spring session of school that they will not be returning to school the following fall, coverage will terminate at the end of school. If the student is registered for fall, coverage will be provided during the summer months. However, if the student does not return in the fall, coverage will terminate at the end of summer vacation.

When a student is no longer eligible for coverage, there is a possibility of continuation. If the employer has 20 or more employees (including full-time and part-time), then COBRA would apply. The student can continue under COBRA for 36 months. You must notify I-NEDA within 60 days if COBRA will be elected. Unfortunately, if the employer has 20 or less employees, there is no continuation for students under State Continuation laws.

I hope this information helps answer some of your questions. Please feel free to call me at the Association office if you have any questions.

 

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