COBRA coverage is a temporary extension of coverage that applies in certain situations when a loss of health coverage would otherwise occur. The right to COBRA coverage was created by a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985.
In order for COBRA coverage to become available, a qualified beneficiary must have a loss of coverage due to certain events (listed below). When one of these events causes a qualified beneficiary to lose coverage under the Plan it is referred to as a "qualifying event." The following information explains COBRA eligibility, time periods, rates, costs, and other conditions:
COBRA Continuation of Coverage
The initial COBRA notice contains important information about the right to COBRA continuation coverage. The notice generally explains COBRA continuation coverage, when it may become available, and what to do to protect the right to receive it.
Loyola has contracted with Benefit Express (“the COBRA Administrator”) to perform many of the administrative tasks required by federal law. This Initial Notice of COBRA Rights indicates when employees should contact the COBRA Administrator, rather than Loyola, for information or assistance. To contact the COBRA Administrator, address all inquiries to:
P.O. Box 189
Arlington Heights, IL 60006
The group health benefits to which this notice applies are provided under the following plan(s):
- The Loyola University Chicago Health Insurance Plan
- The Loyola University Chicago Dental Insurance Plan
- The Loyola University Chicago Health Care Flexible Spending Account Plan
- Vision Service Plan
- Always Vision
Each of these plans is referred to in this notice as the “Plan,” so employees should read this notice as if it applied separately to each Plan. The word “participant” refers to any employee or former employee of Loyola who is or was covered under health benefits provided by the Plan. Under the Plan, participants can elect coverage under the following health benefits:
- Loyola Advantage PPO (BCBS)
- Vision Service Plan
- Always Vision
- Traditional Dental Plan—Delta Dental
- Managed Care Dental Plan—First Commonwealth DMO
- Health Care Flexible Spending Account Plan
Each qualified beneficiary or participant will have the opportunity to continue coverage at the COBRA rate for the number of months shown on the charts below from the date of the "qualifying event":
|Length of Continuation of Coverage||Qualifying Events|
|18 Months||Termination of employment for the covered employee/participant or a reduction in work hours|
|29 Months||Social Security Disability: 18 months of continuation of coverage can be extended an additional 11 months, to a maximum of 29 months, if the Social Security Administration determines a qualified participant/beneficiary was disabled|
|36 Months||If the original event causing loss of coverage, such as the death of the spouse, divorce, legal separation, medicare entitlement, or a dependent child's eligibility ends under the employer's Group Health Plan(s)|
Limited Availability of Health Care FSA
COBRA coverage under the Health Care FSA will terminate at the end of the plan year in progress at the time of the qualifying event. Employees will not be able to make elections for the next plan year. All of the usual rules for the Health Care FSA regarding submitting claims, forfeiting unused balances, etc. will apply during the COBRA period.
If a qualified beneficiary elects COBRA under the Health Care FSA, the COBRA coverage will apply to all of the qualified beneficiaries who lost Health Care FSA coverage due to the same qualifying event as the electing qualified beneficiary, unless the election form specifies otherwise. Each qualified beneficiary has separate election rights, and each could elect separate COBRA coverage under the Health Care FSA to cover that beneficiary only, with a separate Health Care FSA annual limit and a separate premium.
If the qualifying event was a participant's termination of employment or reduction in hours of employment, the maximum COBRA coverage period for health benefits, other than the Health Care FSA, generally is 18 months.
Events Potentially Extending an 18-Month Maximum COBRA Coverage Period
The 18-month maximum COBRA coverage period that usually applies when a termination of employment or reduction in hours qualifying event occurs can be extended in three situations.
Medicare Entitlement Before Termination of Employment or Reduction in Hours
If a participant becomes entitled to Medicare during the 18 months before a qualifying event consisting of the participant’s terminating employment or reducing hours, an extended maximum COBRA coverage period can apply to that participant’s spouse and dependent children who become qualified beneficiaries due to the termination of employment or reduction in hours. The participant’s maximum COBRA coverage period will remain 18 months in this case, but the other qualified beneficiaries will have a maximum continuation period that ends 36 months after the date of the participant's Medicare entitlement. If, for example, a participant became entitled to Medicare on July 1, 2005 and terminated employment on September 15, 2005:
- The participant’s maximum COBRA coverage period would end on March 15, 2007.
- The participant’s spouse and dependent children would have a maximum COBRA coverage period that ends on July 1, 2008.
- Social Security Administration Determination of a Qualified Beneficiary’s Disability
- The 18-month maximum COBRA coverage period (or the period of coverage resulting from Medicare entitlement as described in the preceding paragraph) may be extended to a total of 29 months from the date of termination of employment or reduction in hours if a qualified beneficiary receives a Social Security Administration determination that the qualified beneficiary is disabled. This extension will apply only if the Social Security Administration determines that the employee (or another individual who is entitled to COBRA coverage because of the same qualifying event) was disabled at any time during the first 60 days of COBRA coverage, the employee notifies the COBRA Administrator in a timely fashion, and the employee remains disabled throughout the extension period. For this extension to be available, the COBRA Administrator must be notified in writing of the Social Security Administration determination.
Second Qualifying Event
For a participant’s spouse and dependent children, the maximum COBRA coverage period may be extended to a total of 36 months from the date of the participant’s termination or reduction in hours if, during the first 18 months (or 29 months, if a disability extension applies) that COBRA coverage is in effect, a second qualifying event occurs.
- A second qualifying event for a participant’s spouse may consist of the participant’s death, legal separation, or divorce, but only if the event would have caused the spouse to lose coverage under the Plan had the first qualifying event not occurred.
- A second qualifying event for a participant’s dependent child may consist of the participant’s death, legal separation, or divorce, or the dependent child’s ceasing to meet the dependent eligibility requirements under the Plan, but only if the event would have caused the dependent child to lose coverage under the Plan had the first qualifying event not occurred.
- For this extension to be available, written notice of the event must be properly given to the COBRA Administrator.
If notice is not provided to the COBRA Administrator within the applicable 60-day period, the extension of the maximum COBRA coverage period described in this paragraph will not be available as a result of that event.
Limits on Extensions of the Maximum COBRA Coverage Period
In no case will the total maximum COBRA coverage period for anyone be more than 36 months, and in no case will the total COBRA coverage period for a participant be more than 18 months (29 months in the case of disability, as provided above). For a child born to, adopted by, or placed for adoption with a participant during continuation coverage, these periods are measured from the date of the event that triggered the continuation coverage in effect at the time of birth, adoption, or placement. In no event is the coverage period for such a child based on the date of birth, adoption, or placement.
All of the COBRA coverage periods described above are maximums. COBRA coverage can end before the end of these maximum coverage periods for several reasons, which are described in the following section.
If a 36-month maximum COBRA coverage period applies, it cannot be extended under any circumstances.
COBRA coverage will terminate automatically if, after electing COBRA, an employee first becomes entitled to any Medicare benefits (Part A, Part B or both). Employees must notify the COBRA Administrator promptly after Medicare becomes effective. Regardless of whether or not this notice is provided, termination of COBRA coverage will be effective on the date of Medicare entitlement.
Cessation of Disability
COBRA coverage will terminate automatically if, after becoming entitled to a 29-month maximum coverage period due to an employee's own or another qualified beneficiary’s disability, during the extension, there is a final Social Security Administration determination that the disabled individual ceased to be disabled. Within 30 days after receipt of the Social Security Administration determination, the COBRA Administrator must be notified in writing of that determination according to the notice procedures. Termination of COBRA coverage will be effective on the first day of the first month that is more than 30 days after the date of the Social Security Administration determination, regardless of whether or not an employee gives the required notice.
A participant, the participant’s spouse (as defined in federal law), and the participant’s dependent children can be qualified beneficiaries who are entitled to elect COBRA coverage if they lose coverage under the Plan because of a qualifying event. After a qualifying event has occurred (and, if applicable, proper notice of the qualifying event has been given), COBRA coverage must be offered to each of these “qualified beneficiaries” that would lose Plan coverage as a result of that qualifying event.
For a Participant
If you are a participant, you will be entitled to elect COBRA if you have a loss of coverage under the Plan because one of the following events occurs:
- Your hours of employment with Loyola are reduced to a level that renders you ineligible for benefits
- Your employment with Loyola ends for any reason other than your gross misconduct
For a Participant’s Spouse
If you are the spouse of a participant, you will be entitled to elect COBRA if you have a loss of coverage under the Plan because any of the following events occurs:
- Your spouse dies
- Your spouse’s hours of employment with Loyola are reduced
- Your spouse’s employment with Loyola ends for any reason other than his or her gross misconduct
- You become divorced or legally separated from your spouse, but only if notice of the divorce or legal separation is given, as specified later in this Notice in the section entitled “In Some Cases Qualified Beneficiaries Are Required to Give Notice”
For a Participant’s Dependent Child
If you are the dependent child of a participant, you will be entitled to elect COBRA if you have a loss of coverage under the Plan because any of the following events occurs:
- The participant that is your parent dies
- The participant that is your parent has a reduction in hours of employment with Loyola
- The participant that is your parent terminates employment with Loyola for any reason other than his or her gross misconduct
- The participant that is your parent becomes divorced or legally separated, but only if notice of the divorce or legal separation is given as specified later in this Notice in the section entitled “In Some Cases Qualified Beneficiaries Are Required to Give Notice”
- You stop being eligible for coverage under the Plan as a “dependent child” of the participant, but only if notice of the event making you ineligible is given as specified later in this notice in the section entitled “In Some Cases Qualified Beneficiaries Are Required to Give Notice”
(Including 2% administration fee)
|Coverage Level||Loyola Advantage PPO—BCBS||Delta Dental PPO||Guardian DHMO||VSP||Always Vision|
|Single Coverage Only||$637.57||$32.15||$19.09||$9.77||$8.51|
|Single Plus Child/Children Coverage||$1282.88||$64.26||$34.60||$15.51||$13.50|
|Single Plus Spouse Coverage||$1156.02||$74.26||$38.18||$15.83||$13.79|
|Single Plus LDA Coverage||$1282.88||$64.26||$34.60||$15.51||$13.50|
|Single Plus Child/Children and LDA Coverage||$1904.74||$106.39||$56.07||$25.54||$22.24|
The type of qualifying event determines whether or not a qualified beneficiary is required to give notice of the qualifying event. In some cases, qualified beneficiaries are required to give notice.
If a qualifying event is a participant’s divorce or legal separation, or a dependent child’s losing eligibility for coverage under the Plan, COBRA will not be offered (or available) unless written notice of these events is provided to Loyola University Chicago.
The notice must be given within 60 days of the event (the divorce or legal separation, or the event causing the dependent child’s ineligibility) or the date the Plan says coverage will end because of the event. If notice is not provided within the 60-day period, COBRA coverage will not be available as a result of that event. Also, any claims paid by the Plan after the date coverage should have ended must be refunded to the Plan.
In other cases, no notice is required.
If a qualifying event is a participant’s termination of employment, reduction in hours of employment, or death, notice of the event in order for COBRA coverage to be offered is not required. COBRA coverage will be offered to the qualified beneficiaries with respect to these events even if no notice is provided.
When it is determined that a qualified beneficiary should be offered COBRA, the offer is made by sending an election notice. Former employees or dependents of active employees who are no longer eligible for coverage will receive their Cobra packets directly from Benefit Express within 30 days of their last date of employment or their last date of coverage for dependents. The election period ends 60 days after the date of the election notice or, if later, the date the Plan terms call for the qualified beneficiary to lose coverage because of the qualifying event. The postmark date on the envelope in which the election of COBRA coverage is sent will be deemed the date the election was made.
If COBRA coverage election is not made before the end of the 60-day election period as described above, beneficiaries will lose the right to obtain COBRA coverage and health coverage under the Plan will end.
Independent Election Rights
Each qualified beneficiary losing coverage due to a qualifying event (and for whom any required notice has been provided) will have an independent right to elect COBRA coverage, meaning that each may elect COBRA coverage even if other family members do not.
Effect of Other Coverage or Medicare
Qualified beneficiaries who are entitled to elect COBRA may do so even if covered by another group health plan or Medicare prior to the election date. COBRA coverage will terminate automatically if, after electing COBRA, a qualified beneficiary first becomes entitled to Medicare benefits or becomes covered under another group health plan (but only after the qualified beneficiary is no longer subject to any exclusion or limitation applicable under that coverage that applies to a preexisting condition of the qualified beneficiary).
Loyola is subject to the Family and Medical Leave Act of 1993 (FMLA), and, when allowing leaves protected under the FMLA, Loyola allows participants to continue group health plan coverage at regular contribution levels while on the leave. Beginning an FMLA leave is not an event which qualifies for continuation coverage (beginning a non-FMLA leave may be a COBRA qualifying event, however). If one of the qualifying events listed earlier in this notice occurs during an FMLA leave, however, and, under the terms of the Plan, it normally would result in loss of coverage, then the normal rules described above concerning COBRA coverage would apply. In addition, if a participant who takes an FMLA leave does not return at the end of that leave, the last day of that leave may be treated as a reduction in hours for purposes of determining whether COBRA rights apply.
Payment is not required to be sent with election of COBRA, but COBRA coverage under the Plan will not become effective until coverage within the election period has been properly elected and initial COBRA premiums have been paid on time. The initial COBRA premium is due no later than the 45th day after the election date. That initial payment must cover the premium for the period of COBRA coverage from the date on which Plan coverage would have ended if COBRA had not been elected through the last day of the month that ends before the due date for the initial payment.
Under the Plan, qualified beneficiaries who elect COBRA coverage must pay for that coverage. In most cases, the amount a qualified beneficiary may be required to pay may not exceed 102 percent of the cost to the group health plan (including both employer and employee contributions) for coverage of a similarly-situated plan participant or beneficiary who is not receiving COBRA coverage.
Termination Due to Failure to Pay
COBRA coverage will terminate automatically if the premium for continuation coverage is not paid by the due date and any applicable grace period for paying the premium has expired without the past due premium being paid. Termination of COBRA coverage will be effective at the end of the last month for which the full premium was paid before expiration of the grace period for that payment.
COBRA coverage will terminate automatically on the first date Loyola ceases to provide any group health coverage to any employee.
If you have any questions about the Plan in general, please contact:
Loyola University Chicago Human Resources
820 North Michigan Avenue, 8th floor
Chicago, Illinois 60611
Questions about COBRA continuation coverage once it has been elected, including questions regarding premiums and coverage changes, should be directed to the COBRA Administrator:
P.O. Box 189
Arlington Heights, IL 60006
For more information about rights under ERISA, including COBRA, the Health Insurance Portability and Accountability Act (HIPAA), and other laws affecting group health plans, contact the nearest Regional or District Office of 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.)
Keep the Plan Informed of Address Changes
In order to protect your family’s rights, you should keep Loyola, as well as the COBRA Administrator after electing COBRA continuation coverage, informed of any changes in the addresses of family members. You should also keep a copy, for your records, of any notices you send to Loyola or the COBRA Administrator.