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COBRA

HROG Section:
Work/Life Benefits
Document Title:
COBRA
Initial Date Posted:
April 7, 1986
Board Approval:
Applies To:
Benefit-Eligible Employees
Source:
District Human Resources and Employees Retirement System of Texas
Related TASB Policy:
Last Date Revised:

Purpose

Background

On April 7, 1986, a federal law was enacted (Public Law 99-272, commonly called “COBRA”).  This law requires the state of Texas to offer employees and dependents covered under the Uniform Group Insurance Program (UGIP) the opportunity to temporarily extend their health and dental coverage at the group rate. Continuation coverage is available only when qualifying events cause coverage under the UGIP to end. Coverage under COBRA is limited to the health and dental coverage in effect at the time of the qualifying event.

Definitions

Eligibility

Who May Continue Coverage

If you are an employee covered under the UGIP, you and/or your covered dependents have the right to choose up to 18 months of continuation coverage if your UGIP coverage ended due to:

  • Termination of employment for reasons other than gross misconduct (including retirement with less than 10 years of service credit with the Employees Retirement System of Texas, Teachers Retirement System of Texas or Texas Optional Retirement Program)
  • Loss of UGIP eligibility due to expiration of coverage following leave without pay
  • Loss of UGIP coverage eligibility due to reduction in hours

If you are a dependent covered by an employee under the UGIP, you have the right to choose up to 36 months of continuation coverage if your UGIP coverage terminates due to loss of dependent status, including such qualifying events as:

  • Death of the employee who covered you as a dependent,
  • Divorce of the employee who covered you as a dependent,
  • Your marriage or attainment of age 26, and
  • If you are other than a natural child of the employee who covered you as a dependent and you move out the employee’s household

If you are a former employee’s dependent continuing UGIP coverage under COBRA as a result of the former employee’s termination of employment, expiration of coverage following leave without pay or loss of UGIP eligibility due to reduction in hours, you have the right to extend your coverage for a total continuation of up to 36 months if you lose eligible-dependent status under the rules of the UGIP provided you were covered as a dependent at the time of the initial qualifying event. Beginning Jan. 1, 1997, a COBRA participant’s newborn child or newly adopted child acquired on or after the initial qualifying event also will have a right to extend their coverage. Qualifying events that occur during the initial 18 months of continuation of coverage that entitle covered dependents to the additional continuation period are:

  • Death of the former employee who covered you as a dependent,
  • Divorce of the former employee who covered you as a dependent,
  • Your marriage or attainment of age 26,
  • If you are other than a natural child of the former employee who covered you as a dependent and you move out of the former employee’s household, and
  • Former employee who covered you as a dependent begins receiving Medicare benefits

Procedures

Election Period 

For employees and dependents eligible for continuation coverage

The ERS will provide you with a COBRA Election Form and COBRA Notification (pdf) following the termination of your coverage. You and/or your dependents must formally elect continuation coverage on the form provided and submit the appropriate premium payment within 105 days of the date coverage terminated or the date of notice, whichever is later. Failure to do so will result in the forfeiture of your continuation coverage. Each covered participant has the right to elect continuation coverage independently. You and your dependents will not have coverage after the date coverage terminated until you formally elect continuation coverage and pay all premiums due retroactive to the first day of the month following the date coverage terminated.

For dependents whose coverage terminates due to loss of dependent status

The member or the covered dependent has the responsibility to notify one of the following of a divorce or when a covered dependent loses dependent status. Notification must occur within 60 days of the qualifying event date.

  • Active employee – your institution benefits coordinator
  • Retiree or current COBRA participant – the Employees Retirement System of Texas (ERS)

Upon notification the ERS will provide a form for the dependent to complete and forward to the ERS with the appropriate premium within 105 days of the date of notice on the form or the date coverage terminated, whichever is later. If the benefits coordinator or ERS is not notified within 60 days, continuation coverage will be forfeited.

Adding newly acquired dependents during the election period

Newly acquired dependents may be added to the COBRA continuation coverage provided the ERS is notified in writing within 30 days of the date the individual first became an eligible dependent. This rule also applies during the 105-day election period. Example: An employee terminated employment on July 20 and acquired an eligible dependent on Aug. 5. To add the new dependent to the COBRA continuation coverage, the request must be postmarked on or before Sept. 4 even though the 30-day notification deadline occurs before the end of the 105-day election period.

Cost of Continuation Coverage

People electing continuation coverage must pay the full premium plus an additional 2 percent administrative fee. The first premium payment is due within 105 days from the date of the COBRA qualifying event or the date of notice, whichever is later. If you will receive an annuity from ERS, your monthly premium will be automatically deducted from your monthly annuity payment. To ensure that no break in coverage occurs, the first premium payment must include all premiums due retroactively to the first day of the month following the date coverage terminated. Subsequent monthly payments are due on the first of each coverage month and must be postmarked by the U.S. Postal Service within 30 days of the due date. If your payment is late, your coverage will be automatically canceled retroactive to the last day of the month in which a full payment was received and was not considered delinquent.

Length of Continuation Coverage

Your continuation coverage may be canceled for any of the following reasons:

  • The required premium for your continuation coverage is not received within the required time period, regardless of the circumstances.
  • You enroll in another group health plan on or after the COBRA coverage effective date unless the other group health plan subjects you to a pre-existing condition limitation or exclusion. If you enroll in another group health plan, your COBRA coverage will end when the new group health plan covers you and does not limit or exclude coverage for pre-existing conditions in accordance with Public Law 104-191 (Health Insurance Portability and Accountability Act of 1996).
  • You begin receiving Medicare benefits on or after the COBRA coverage effective date.
  • The GBP ceases to provide coverage to any employee/retiree.
  • You extend coverage due to a disability and the Social Security Administration (SSA) makes a final determination that the disability no longer exists.
  • You submit a written request to cancel coverage. Cancelations will be made effective the last day of the month in which the U.S. Postal Service postmarks your request. Therefore, you must make the full premium payment for the month in which you are mailing the cancellation request.

PLEASE NOTE: Canceled continuation coverage cannot be reinstated.

Employee Responsibility

HR Responsibility

Exceptions To Policy

Other Notes

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