Continuation Coverage Notification (COBRA)

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 Texas Employees Group Benefits Program (GBP) the opportunity to temporarily extend their health and dental coverage at the group rates. Continuation coverage is available only when qualifying events cause coverage under the GBP to end. Coverage under COBRA is limited to the health and dental coverage in effect at the time of the qualifying event.

WHO MAY CONTINUE COVERAGE

If you are an employee (or a dependent of an employee) covered under the GBP, you have the right to choose up to 18 months of continued coverage if your GBP coverage ended due to:

• Termination of employment for reasons other than gross misconduct (including retirement with less than 10 years of service credit)
• Loss of GBP eligibility due to expiration of coverage following leave without pay
• Loss of GBP eligibility due to reduction of hours (only applicable to higher education institution employees)

If you are a dependent covered by an employee under the GBP, you have the right to choose up to 36 months of continued coverage if your GBP 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 25
• If you are other than a natural child of the employee who covered you as a dependent and you move out of the employee's household

If you are a former employee's dependent continuing GBP coverage under COBRA as a result of the former employee's termination of employment, expiration of coverage following leave without pay, or loss of GBP eligibility due to reduction of hours, you have the right to extend your coverage for a total continuation period of up to 36 months if you lose eligible-dependent status under the rules of the GBP provided you were covered as a dependent at the time of the initial qualifying event. Beginning January 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 entitle dependents to the additional continuation period are:

• Death of the former employee who covered you as a dependent
• Divorce of the employee who covered you as a dependent
• Your marriage or attainment of age 25
• If you are other than a natural child of the employee who covered you as a dependent and you move out of the employee's household
• Former employee who covered you as a dependent becomes eligible for Medicare benefits

ELECTION PERIOD

For employees eligible for continued coverage:
Your Benefits Coordinator will provide you with a form indicating both the date your coverage terminated and the date of notice. You and/or your dependents must formally elect continuation coverage on the form provided within 60 days of the date coverage terminated or the date of notice on the form, whichever is later. Each covered participant has the right to elect continued coverage independently. You and your dependents do 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 terminated due to loss of dependent status:
The member or the covered dependent has the responsibility to inform one of the following of a divorce or when a child loses dependent status within 60 days of the qualifying event date:

• Active employee - your agency or institution Benefits Coordinator
• Retiree or COBRA participant - the Group Insurance Division of the Employment Retirement System of Texas (ERS)

If the Benefits Coordinator or the ERS is not notified with 60 days, continued coverage will not be available. Upon notification, the coordinator or the ERS will provide a form for the dependent to complete and forward to the ERS within 60 days of the date of notice on the form or date coverage terminated, whichever is later.

COST OF CONTINUATION OF COVERAGE

Persons electing continuation coverage must pay the full premium plus an additional 2% administrative fee. After your election form is processed, you will be notified of the premium amounts. The first premium payment will be due within 45 days from the date the election form is processed. To ensure that no break in coverage occurs, the first premium payment will include all premiums due retroactive 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 cancelled automatically retroactive to the last day of the month in which a full monthly payment was received and not considered late.

LENGTH OF CONTINUATION COVERAGE

Your continued coverage may be cancelled for any of the following reasons:

• The required premium for your continued coverage is not received within the required time period, regardless of the circumstances
• You become covered under any other group health plan, unless pre-existing conditions are excluded or benefits for the pre-existing conditions are limited under the other health plan. Beginning on and after July 1, 1997, if you become covered by another group health plan, your COBRA coverage will end when the new group plan covers you regardless of any pre-existing conditions, in accordance with Public Law 104-191 (Health Insurance Portability and Accountability Act of 1996).
• You become entitled to Medicare benefits
• The GBP ceases to provide coverage to any employee/retiree
• You extend coverage due to a disability and there has been a final determination by the Social Security Administration (SSA) that the disability no longer exists
• You submit a written request to cancel any coverage. Cancellations will be made effective the last day of the month in which your request is postmarked by the U. S. Postal Service

IMPORTANT: Cancelled continuation coverage cannot be reinstated.

Special provision for covered individuals who are determined to be disabled by the SSA

A COBRA participant or a dependent covered by the COBRA participant who is determined under Title II or Title XVI of the Social Security Act to have been disabled on or before the date of termination of employment, expiration of coverage following leave without pay, or loss of eligibility due to reduction of hours may have up to an additional 11 months of continued coverage. The disabled individual may continue coverage for a possible total of 29 months or until Medicare entitlement begins. Beginning January 1, 1997, individuals covered by COBRA may be eligible for up to 29 months of continuation coverage if any covered individual is determined by the SSA to have been disabled before or during the first 60 days of continuation of coverage provided the original 18-month continuation period began on or after July 1, 1995. All covered individuals may continue coverage for a possible total of 29 months or until Medicare entitlement begins, whichever occurs first. All covered individuals' coverage will be cancelled automatically when Medicare entitlement begins. Once the SSA sends you the award letter, you must submit the award letter to the ERS within the original 18-month continuation period. The premium for the additional 11 months of coverage will be 150% of the premium charged for active employees with the same types and levels of coverage. A covered individual who may be eligible for the coverage extension period due to a disability must contact the local SSA office to begin the determination process.

CONVERSION TO INDIVIDUAL POLICY

Within thirty (30) days after the date your COBRA coverage expires, you may enroll in an individual conversion health plan and/or dental plan. Contact your health and/or dental plan for specific information.

Questions about continuation coverage should be directed to the Group Insurance Division of the Employees Retirement System at
512.867.3193 or 1.800.541.5806 (outside the Austin area only).