COBRA is the "Consolidated Omnibus Budget Reconciliation Act" which was enacted by Congress in 1985 to enable certain individuals the opportunity to continue health coverage at favorable group rates in certain circumstances where they would ordinarily lose eligibility for that coverage.  COBRA is a federal law, however there are also additional MN state laws regarding continuation coverage that compliment the COBRA continuation rules. 

The SPPS insurance plans that are subject to COBRA are health insurance, dental insurance, and flexible spending plans.  (Please note that, while the HSA Qualified High Deductible Health Plan is subject to COBRA, an attached HSA plan is not subject to COBRA.)  Life insurance, long term disability, and short term disability are not subject to COBRA, however life insurance continuation is allowed under MN continuation laws.

Individuals who are eligible to be covered under COBRA are called "qualified beneficiaries".  Qualified Beneficiaries (QBs) include the employee covered under the group health plan as of the date of the "qualifying event", the employee's covered spouse, and covered dependent children.  Each QB who elects continuation coverage will have the same rights under the group health plan as other participants or beneficiaries covered the plan, including special enrollment rights.

Examples of COBRA qualifying events include:

• termination of employment (resignation, retirment, layoff, etc.)
• change from full time to part time
• non-FMLA leave of absence
• union strike
• employee's death
• divorce
• loss of dependent status

If you aren't sure whether or not an event you've experienced is a "qualified event" under COBRA, contact the benefits staff within Human Resources.

Events Requiring Notification
Under Federal and Minnesota law, the employee or family member has the responsibility to inform the District of the following qualifying events: 
1. a divorce
2. a dependent child losing dependent status
3. disability (for the purpose of extending continuation coverage)
4. second qualifying events (for the purpose of extending continuation coverage)
5. intent to commence period of military service
If you, your dependent or your representative fail to notify the plan administrator within 60 days of one of the above events all continuation of coverage rights will be lost.

Notification Procedures
Notification to the plan administrator must be in writing and:
1. disclose the nature of the event; and
2. include the date the event occurred
3. include the name(s) and current address(es) of those persons entitled to continuation coverage; and
4. enclose documentation verifying and confirming the qualifying event; and
5. include the name(s) and address(es) of those persons who are to receive information on continuation coverage in the future if different from those that are entitled

Notification must be hand delivered or mailed to:
St. Paul Public Schools
Human Resources
360 Colborne
St. Paul, MN  55102

In the case of loss of group health plan coverage due to termination of employment (other than for gross misconduct) or a reduction in work hours, coverage may be continued for a maximum period of 18 months.  If  you were totally disabled (as defined by Minnesota Law) when the termination or reduction in work hours occurred, Minnesota law allows qualified beneficiaries to continue coverage for the entire period of time for which the employee is totally disabled.  COBRA also allows for special coverage should a covered employee, spouse or dependent become disabled within 60 days following an employee’s termination of employment or reduction in hours for reasons other than disability. Coverage for all covered individuals may then be continued for up to 29 months (standard 18 months plus an additional 11 months).  The extended continuation period applies to health and/or dental insurance only (life insurance is limited to the standard 18 months).

Under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) if an employee is absent from employment due to military service, they may elect to continue coverage on a COBRA-like basis. The maximum period of coverage they may elect will be the lesser of the 24 month period beginning on the date on which the absence began; or the day after the date on which the person fails to apply for or return to work.  If you don't elect to continue coverage during your military service, you have the right to be reinstated in your employer's health plan when you are reemployed, generally without any waiting periods or exclusions (e.g., pre-existing condition exclusions) except for service connected illnesses or injuries.

Group health plan coverage may be continued for a maximum period of 36 months if the loss of group health plan coverage is due to the following:

1. Employee/parent becomes enrolled in Medicare
2. Dependent child ceases to be a dependent under the terms of the group health plan

If you lose group health and/or dental insurance coverage because of a divorce or the death of the employee, Minnesota Law requires that you be afforded the opportunity to maintain coverage until you become covered under another group health plan or become enrolled in Medicare.

Continuation of coverage will be terminated before the end of the maximum continuation period for any of the following reasons: 

1. The Employer no longer provides group health insurance coverage to any of its employees;
2. The premium for your continuation coverage is not paid on time;
3. You become covered under another group health insurance plan that does not include any pre-existing conditions clause that applies to you or to a covered dependent;
4. After making a COBRA election, the qualified beneficiary first becomes enrolled in Medicare;
5. A final determination has been made that the qualified beneficiary is no longer totally disabled (as defined in Minnesota law).  Termination of coverage is effective in the month that begins more than 30 days after the final determination.
6. For any reason the group health plan would terminate coverage of a plan participant or beneficiary not receiving continuation coverage (e.g. fraud);
7. You period of military service comes to an end and you fail to reapply for coverage/employment

If you elect continuation coverage, an extension of the maximum period of 18 months of coverage may be available if a second qualifying event occurs.  You must notify the District of a disability or second qualifying event in order to extend the period of continuation coverage.  Failure to provide notice of a disability or a second qualifying event may affect the right to extend coverage.

Continuation on Disability
An 11 month extension of group health plan continuation (total 29 month continuation period) may be available if any of the qualified beneficiaries (including dependents) becomes disabled within 60 days of the termination of employment or reduction in hours.  In order to be entitled to the 29 month continuation, the qualified beneficiary must satisfy all of the following conditions:

1. The disability must be approved by the Social Security Administration; and
2. The disability must have occurred prior to the end of the 60 day election period for continuation coverage; and
3. The qualified beneficiary must notify the District within 60 days of the Social Security approval of the disability; and
4. The qualified beneficiary must notify the District regarding the Social Security determination of disability prior to the expiration of the 18 month continuation of coverage period

If the qualified beneficiary is determined by the Social Security Administration to no longer be disabled, you must notify the District of the fact within 30 days of the Social Security decision.

Second Qualifying Event
If a second qualifying event occurs during the first 18 months of continuation coverage, spouses and dependent children who elected continuation will have available an additional 18 months extension of continuation coverage.  The maximum amount of continuation coverage available when a second qualifying event occurs is 36 months.  Second qualifying events include:

1. Death of the employee; or
2. Divorce from the employee; or
3. The covered employee enrolls in Medicare; or
4. A dependent child ceases to be eligible for coverage as a dependent under the plan

You must notify the District within 60 days after a second qualifying event occurs in order to extend your continuation coverage.

Under the group health plan you have the right, when your group health plan coverage ends, to enroll in an individual health insurance policy without providing proof of good health.  The benefits provided under such a conversion policy may not be identical to those provided under the group health plan.  You may exercise this right in lieu of electing continuation coverage, or you may exercise this right after you have received the maximum continuation coverage available to you  under COBRA. 

You should note that if you enroll in an individual conversion policy you lose the right under federal law to purchase individual health insurance that does not impose any pre-existing conditions limitations when your conversion policy coverage ends. 

If you are on continuation coverage due to military service and your military service ends, you have the right to be reinstated in your employer's health plan when you are reemployed, generally without any waiting periods or exclusions (e.g., pre-existing condition exclusions) except for service connected illnesses or injuries.

When Human Resources is notified of a qualifying event, they will send you a packet of information including continuation election forms to be completed and returned if continuation coverage is desired.  (Remember, for many qualifying events such as divorce or a child losing dependent status, it is your responsibility as a covered member to notify Human Resources of the event so the COBRA process can be initiated.)  A qualified beneficiary must elect continuation coverage within 60 days from the date of the qualifying event or the loss of group health plan coverage due to the qualifying event, whichever is later.  Failure to do so will result in a loss of the right to elect continuation coverage under the group health plan.  Each qualified beneficiary has a separate independent right to elect group health plan continuation coverage.  For example, both the employee and the employee’s spouse may elect continuation coverage or only one of them.  Parents may elect to continue coverage on behalf of their dependent children only.

Problems in Failing to Elect Continuation Coverage
In considering whether to elect continuation coverage, you should take into
account that failure to continue your group health plan will affect your future rights under federal law. 

First, you may have a pre-existing conditions exclusion applied to your coverage under other group health plans if you have more than a 63 day gap in your health coverage, and election of continuation coverage (along with premium payment) will eliminate any gap in coverage.

Second, if you fail to elect group health plan continuation, you will lose the guaranteed right to purchase individual health insurance policies that do not impose a pre-existing conditions exclusion.  The guaranteed right to purchase such individual policies applies only where you accept continuation coverage for the maximum continuation period available to you.

If you are eligible for continuation due to military service and do not elect to continue coverage, you have the right to be reinstated in your employer's health plan when you are reemployed, generally without any waiting periods or exclusions (e.g., pre-existing condition exclusions) except for service connected illnesses or injuries.

Special Enrollment Rights in Other Group Health Plans
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 plan coverage ends because of a qualifying event. 

You will also have the same enrollment right at the end of continuation coverage if you maintain continuation coverage for the maximum time available to you. 

The cost of coverage depends on the “qualifying event”.   A chart below provides current 2009 costs.

Typical / Common Qualifying Events
For typical qualifying events (including resignation, reduction in hours, loss of
dependent status, etc.), each qualified beneficiary will be required to pay the entire cost of continuation coverage.  The amount a qualified beneficiary will be required to pay will 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 (covered employee) or beneficiary (covered dependent) who is not receiving continuation coverage

Involuntary termination or layoff
Employees who experience involuntary termination or layoff between the dates of September 1, 2008 and December 31, 2009 may be eligible for a federal subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA) of 65% towards the COBRA continuation premiums for a period of 9 months following their qualifying event.  
 
Disability
If the qualified beneficiary is totally disabled, the amount they will be required to pay will not exceed 100% of the cost of the group health plan coverage (including both employer and employee contributions) for 18 months.  If the qualified beneficiary is continuing group health plan coverage due to a disability that occurred within 60 days of termination of employment or reduction in hours, the group health plan may charge up to 150 percent of the premium cost for months 19 through 29 of your disability extension.

Military
If you have continuation coverage due to military service and your leave is shorter than 31 days, you will not be required to pay more than the regular employee share of the premium.

Chart of Costs:

Method of Payments Accepted
SPPS offers three options to pay for coverage – check, credit card, or electronic account withdrawal.  Sorry, cash payments cannot be accepted.

Time Limit for First Payment
You must make your first payment for group health plan continuation coverage within 45 days from the date you make an election for continuation coverage (this is the date the election notice is post marked if mailed).  If you do not make your first payment for your continuation coverage within the 45 day period, you will lose all continuation rights under the plan.
 
Amount of First Payment
Your first premium payment must cover the cost of the continuation coverage from the time your coverage under the plan would have otherwise terminated up to the time you make your first payment.  You are responsible for making sure that the amount of your first payment is enough to cover this entire period.  You may contact the District, to confirm the amount of your first payment.

Premium Payments After the First Payment
After you make your first payment for continuation coverage you will be required to pay for continuation coverage for each subsequent month of coverage.  Under the plan, these periodic payments are due on the first day of each month.  You will be given a 30 day grace period to make each premium payment.  Your continuation coverage will be provided for each coverage period as long as payment for that coverage is made before the end of the grace period. 

Suspension of Grace Period Coverage for Non-Payment
If you make a monthly payment for continuation coverage later than the due date but during its grace period, your coverage under the group health plan will be suspended as of the due date and then retroactively reinstated going back to the due date, when the monthly premium is made.  This means that any claim you submit for benefits while your coverage is suspended may be denied and the claim may have to be resubmitted once your coverage has been reinstated. 

Loss of Coverage Due to Non-Payment During the Grace Period
If you fail to make a monthly premium payment beyond the end of the grace period you will lose all rights to continuation coverage under the group health plan.