Department of Human Resources Benefits Division COBRA Training

1-Course Objectives What plans are affected by COBRA What is cobra and how to apply this federal law What government agencies govern cobra Definition of “qualified beneficiary” What is a “qualifying event” Required notices

2-Course Objectives (cont.) Personnel/employee/dependent/ plan responsibilities Enrollment forms, premium payments, and where to send Gross misconduct

The availability of cobra coverage under the FlexElect medical reimbursement account Non-compliance penalties and fines 3-Course Objectives (cont.)

State Dental Plans Delta Dental Plan of CA (Wolfpack Insurance Services, Inc.) DeltaCare USA (Wolfpack Insurance Services, Inc.) SafeGuard Premier Access Western Dental

State Vision Plan and FlexElect State-Sponsored FlexElect Medical Reimbursement Account (only) Department of Human Resources Benefits Division/FlexElect Program (COBRA Enrollment) Attention: Becky Bayliss (916)

Bargaining Unit 6 For employees in Bargaining Unit 6 - send all COBRA enrollment forms to CCPOA Benefit Trust.

1-Qualified Beneficiary The term “qualified beneficiary” means, an individual that is eligible to continue group coverage because of a qualifying event.

2-Qualified Beneficiary The individual must be covered under the plan at the time of the qualifying event. If the individual is not covered, he/she is not eligible for COBRA.

1-Eligible Individuals Who is Covered: Employee Former Employee Retired Employee

2-Eligible Individuals Spouse and Dependent children Newborn or Child Place for Adoption (deemed a qualified beneficiary, although not covered at time of the qualifying event)

Domestic Partners Domestic partner (eligible based on State of California Legislation, not under Federal COBRA Law)

1-Qualified Medical Child Support Order A Qualified Medical Child Support Order (QMCSO) is a judgment, decree, or order that requires that a child receive benefits under group coverage.

A child enrolled in group coverage under a QMCSO is deemed a qualified beneficiary under COBRA law, regardless of his/her status as a dependent of the covered employee. Send an Initial General Notice to the agency that sent the QMCSO. 2-Qualified Medical Child Support Order

Ineligible Individuals Non-resident alien (with no U.S. income) Individual (not qualified beneficiaries) under the plan because of another qualified beneficiary’s election

1-Initial General COBRA Notice Who is responsible for sending: – Personnel Office What is it: –Notice of COBRA Rights

2-Initial General COBRA Notice Who does it address: Covered Employee/Spouse/Domestic Partner. When does it need to be sent: – Within 90 days from when coverage starts

Initial General COBRA Notice The Initial COBRA notice should contain the following information: Summary of continuation benefits/description of COBRA terms Listing of qualifying events Outline of employee/dependent notification responsibilities (See BAM Section 400–Attachment A)

Cobra Qualifying Events Length of Eligibility COBRA allows employees and dependents to maintain dental benefits for either 18 or 36 months after losing coverage because of the following qualifying events:

1-Cobra Qualifying Events (CQEs) 18 Month Events Voluntary Termination Involuntary Termination of Employment (other than for Gross Misconduct), Reduction of Hours

2-COBRA Qualifying Events (CQEs) 36 Month Events Divorce Legal Separation Child Ceases to be a Dependent Death of Employee Employee Becomes Entitled to Medicare

1-Coverage and Continuation Termination of Domestic Partnership (State of California Legislation, not under Federal COBRA Law). 120-day death benefit direct payment apply, COBRA provisions are applicable after CalPERS determination of survivor benefits.

Note: For an unpaid leave of absence, the dental and vision benefits may be continued through direct payment, not COBRA. 2-Coverage and Continuation

COBRA Election Notice COBRA Election Notice Flow Who Sends the COBRA notice: Personnel Office Sends Notice of COBRA Rights To Elect COBRA, Based on the Event.

1-COBRA Election Notice The Notice sent to: Covered Employee Spouse Domestic Partner Other Covered Dependent(s).

2-COBRA Election Notice The COBRA election notice (BAM Section 400–Attachment B) should contain the following information: Details of COBRA rights and responsibilities Outline of coverage/notification procedures/premium payments A COBRA Election Form (BAM Section 400–Attachment C)

1-COBRA Qualifying Event (CQE) Notification Responsibilities Personnel Office The Personnel Office should be aware of when a covered employee has died, voluntarily terminated their employment, or had a reduction of hours.

Personnel Office A COBRA election notice and election form must be provided to qualified beneficiaries within 14 days from the date of the qualifying event or loss of coverage. 2-COBRA Qualifying Event (CQE) Notification Responsibilities

1-CQE-Triggers Notification Responsibilities Employee, spouse, and domestic partner must: Notify the Personnel Office when a divorce, termination of domestic partnership, legal separation, or child ceases to be a dependent occurs (e.g., child turns 26).

Employee, spouse, and domestic partner must also: Notice personnel within 60 days from the date of the qualifying event or the date on which coverage is lost. 2-CQE-Triggers Notification Responsibilities

CQE Notification Responsibilities – Although it is the employees, spouses, and domestic partners responsibility to notify the Personnel Office when a child ceases to be a dependent, you may be aware that a COBRA qualifying event has occurred (e.g., child turns 26).

CQE Notification Reminder Remember: Employees are generally responsible to notice the Personnel Office of the CQE events, but they must be provided the Initial General COBRA Notice to know what and when to report the event.

1-Notice of Unavailability of Continuation Coverage In the event that the Personnel Office is notified of a qualifying event and determines that an individual is not entitled to elect continuation coverage, (i.e., 60-day notification period missed) the Personnel Office must provide a “Notice of Unavailability of Continuation Coverage”.

The notice must be provided within 14 days to explain why the individual is not entitled to elect continuation coverage. (BAM Section 400- Attachment D) 2-Notice of Unavailability of Continuation Coverage

1-Calculating the COBRA Election Period The next examples illustrates how the COBRA election period works in the case of a qualified beneficiary who has lost State-sponsored group coverage.

There are two dates that you must be aware of, 60 days from the date of loss of coverage or 60 days from the date of the COBRA notice, whichever date is later. 2-Calculating the COBRA Election Period

Loss Of Coverage-Example 1 Date Being With COBRA Notice after CQE: Date of Termination or employment= Date of Notice=

Date of loss of coverage = End of Election period = Example 1 Loss Of Coverage-

Loss Of Coverage-Example 2 Date Being COBRA Notice Before CQE: Date of Termination = Date of Notice =

Date of loss of coverage = End of Election period = Example 2 Loss Of Coverage-

Retroactive COBRA Premium Due Calculating the 45-Day Initial Payment Period: The next table illustrates how the 45- day retroactive COBRA premiums payment period works.

Example Qualifying Event (Employment Terminates) May 16 First day of COBRA coverage July 1 Elect COBRA Coverage on August 15, 45 days later on September 29, Premium paid First premium payment covers CQB from July 1 through August 31

In the case of a qualified beneficiary whose employment terminates on May 16 and coverage is provided through the end of the next month. If the employee elects COBRA on August 15, the retroactive premium payment is not due until 45 days later (September 29). 1-Retroactive COBRA Premium Due

2-Retroactive COBRA Premium Due For example, the September premium payment which was due by September 1, the 30-day grace period would now apply.

Enrollment Forms, Addresses, COBRA Calendar How to complete COBRA enrollment form (BAM section 419) Where to send enrollment form and premiums (BAM section 421) COBRA Calendar (BAM Attachment H)

1-Gross Misconduct If the employee’s termination is due to “gross misconduct,” then the department should not offer COBRA coverage. While providing this exception to offering COBRA, the statue and IRS have not provided a definition for employers to use.

If, however, your department wants to utilize the gross misconduct exception, you should draft a written policy that will serve as the basis for your decision on what will constitute gross misconduct. 2-Gross Misconduct

3-Gross Misconduct Decision Criteria Written Policy – Is there a written policy in your department that described the actions that would constitute gross misconduct? Was the employee made aware?

Employee History - What type of employment history did the employee have at the department? Was the reason for termination a recurrent problem? 4-Gross Misconduct Decision Criteria

5-Gross Misconduct Decision Criteria Violation of Law - Did the employee violate a federal, state or local law? Has the employee been charged in criminal court? Has the employee admitted the violation.

State Unemployment Compensation Disqualification Based on Gross Misconduct -A description of reasons to disqualify former employees from collecting unemployment compensation is identified in the California State Unemployment Insurance Law. 6-Gross Misconduct Decision Criteria

Consult Legal Counsel - Legal counsel should review the reasons for termination and assist in the gross misconduct decision making process 7-Gross Misconduct Decision Criteria

COBRA-BAM Location Reminder Highlights of prior changes in the COBRA Program (BAM). These changes are currently reflected in the BAM COBRA Section 400. COBRA BAM Sections subject to change based on updates as needed.

COBRA Section 408 BAM Remember: BAM Section 408 Court Orders – Information added to discuss a need to provide an election notice and election form when notified of a qualifying event that requires an offer of continuation coverage to a child or spouse of an employee.

COBRA Section 413 BAM BAM Section 413: Health Insurance Premium Payment (HIPP) Program – Information added regarding COBRA premium payment assistance provided through the Health Insurance Premium Payment (HIPP) Program for persons disabled by HIV/AIDS.

COBRA Section 419 BAM BAM Section 419 Instructions for completion of the STD. 692 and STD 700–A box was added to both the STD. 692 and STD. 700, for the selection of a COBRA continuation enrollment. The Personnel Office will no longer need to write or type “COBRA Continuation Enrollment” at the top of these forms.

1-COBRA–Plan Contact Information BAM Section 421: Insurance Plan Addresses and Phone Numbers: For Delta and DeltaCare USA enrollees, send the STD. 692 and premium payments to: WolfPack Insurance Services, Inc.

Belmont, CA Attn: COBRA – State of California You may also fax the STD. 692 to (650) For Questions-Tel.: COBRA–Plan Contact Information

3-COBRA-Plan Contact Information Premier Access ATTN COBRA Unit 8890 Cal Center Drive Sacramento, Ca

Western Dental ATTN: COBRA Unit 530 South Main St., 6 th Floor Orange, Ca COBRA-Plan Contact Information

5-COBRA–Plan Contact Information SafeGuard Health Plans ATTN:SOC COBRA Billing P.O. Box Philadelphia, PA

6-COBRA–Plan Contact Information Vision Plan Insurance Plan Addresses and Phone Numbers The Vision Plan Enrollment Authorization (STD. 700) when used for the purpose of a COBRA continuation enrollment can now be faxed to Vision Service Plan (VSP) at fax number (916)

COBRA Compliance-federal Non-compliance penalties and fines Federal Court Two types of fines

COBRA-Questions Questions Regarding the State Dental and Vision COBRA Program: Personnel Office staff requiring assistance or clarification regarding the State’s Dental/Vision COBRA Program should call Bryan Bruno, Benefit Programs Manager at (916) or

1-What Have We Have Covered COBRA is governed under federal law. COBRA governed by: Dept. of Labor and IRS. Qualifying Events. Required Notices.

2-What Have We Have Covered Employer, Employee, Dependent, and Plan Responsibilities. Enrollment Forms, Premium Payments, and Where To Send.

What Have We Have Covered COBRA Availability, including Under the FlexElect (MRA) Program. Gross Misconduct. Non-compliance Penalties And Fines.