Cobra

TO: Employee and Family Members
FROM: The Office of Human Resources

Department of Human Resources
VERY IMPORTANT NOTICE
A Federal law was enacted in 1986 (Public Law 99-272, Title X) requiring that most employers sponsoring group health plans offer employees and their families the opportunity for a temporary extension of health coverage (called “continuation coverage”) at group rates in certain instances where coverage under the plan would otherwise end. This notice is intended to inform you, in a summary fashion, of your rights and obligations under the continuation coverage provisions of the law. (Both you, your spouse and other dependents should take the time to read this notice carefully).

If you are an employee of Furman University and you are covered by our health insurance policy, you have a right to choose this continuation coverage if you lose your group health coverage because of a reduction in your hours of employment or the termination of your employment (for reasons other than gross misconduct on your part).

If you are the spouse of an employee and you are already covered by our health insurance policy, you have the right to choose continuation coverage for yourself if you lose group health coverage under Furman University for any of the following four reasons:

  1. The death of your spouse;
  2. A termination of your spouse’s employment (for reasons other than gross misconduct) or reduction in your spouse’s hours of employment;
  3. Divorce or legal separation from your spouse; or,
  4. Your spouse becomes eligible for Medicare.

In the case of a dependent child of an employee covered by Furman’s health insurance plan and the child is already covered by our health plan, he or she has the right to continuation coverage if group health coverage is lost for any of the following five reasons:

  1. The death of a parent;
  2. The termination of a parent’s employment (for reasons other than gross misconduct) or reduction in a parent’s hours of employment with Furman University;
  3. Parent’s divorce or legal separation;
  4. A parent becomes eligible for Medicare; or,
  5. The dependent ceases to be a “dependent child” under one of Furman’s health policy.

Under the law, the employee or a family member has the responsibility to inform the Human Resources Department of a divorce, legal separation, or a child losing dependent status under the University’s health insurance plan. The University has the responsibility to notify the insurance company of the employee’s death, termination of employment, or reduction in hours, or Medicare eligibility.

When the insurance company is notified that one of these events has happened, the insurance company will temporarily suspend your coverage until a decision to continue is made and premiums are paid. Under the law, you have 60 days from the date of notice or loss of coverage date to make your decision. When a decision is made, the premium payment is divided into three parts: (1) Retroactive Premium (amount due from loss of coverage to date of election); (2) Amount accrued from date of election to date of first payment; and (3) Future Monthly Premiums (payable 1st of each month so claims can continue to be paid).

If you choose continuation coverage, Furman University is required to give you coverage which, as of the time coverage is being provided, is identical to the coverage provided under the plan to similarly situated employees or family members. The law requires that you be afforded the opportunity to maintain continuation coverage for 36 months unless you lost group health coverage because of a termination of employment or reduction in hours. In that case, the required continuation coverage period is 18 months. There is a 29 months continuation event under the disability policy which, if you are approved for disability, your continuation length is 29 months.

However, the law also provides that your continuation coverage may be cut short for any of the following five reasons:

  1. Furman University no longer provides group health coverage to any of its employees;
  2. The premium for your continuation coverage is not paid;
  3. You become an employee covered under another group health plan;
  4. You become eligible for Medicare; or
  5. You were divorced from a covered employee and subsequently remarry and are covered under your new spouse’s health plan.

You do not have to show that you are insurable to choose continuation coverage. However, under the law, you may have to pay all or part of the premium for your continuation coverage. (The law also says that, at the end of the 18, 29, or 36 months continuation coverage period, you must be allowed to enroll in an individual conversion health plan provided under the insurance company you were enrolled with previously).

If you do not choose continuation coverage, your group health insurance coverage will end.

This law applies to any of the University health insurance companies. If you have any questions about the law, please contact Furman University Human Resources Department, 3300 Poinsett Highway, Greenville, SC 29613. Also, if you have changed marital status, or you or your spouse have changed address, please notify Furman at the above address.