CONTINUATION COVERAGE RIGHTS UNDER COBRA
You are receiving this notice because you are covered under the CHEIBA Trust
(the Plan). This notice contains important information about your right to COBRA
continuation coverage, which is a temporary extension of coverage under the Plan. This notice
generally explains COBRA continuation coverage, when it may become available to you
and your family, and what you need to do to protect the right to receive it.
The right to COBRA continuation coverage was created by a federal law, Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA continuation coverage may
become available to you and your dependents that are covered under the Plan when you would
otherwise lose your group health coverage. This notice gives only a summary of your COBRA
continuation coverage rights. For more information about your rights and obligations under the
Plan and under federal law, you should review the Plan's Summary Plan Description or get a
copy of the Plan Document from the HealthSmart COBRA Administrator listed below.
COBRA continuation coverage for the Plan is administered by:
10303 E. Dry Creek Road, Suite 200
Englewood, CO 80112
What is COBRA Continuation Coverage?
COBRA continuation coverage is a continuation of Plan coverage when coverage would
otherwise end because of a life event known as a “qualifying event.” Specific qualifying
events are listed later in the notice. COBRA continuation coverage must be offered to each
person who is a “qualified beneficiary”. A qualified beneficiary is someone who wil lose
coverage under the Plan because of a qualifying event. Depending on the type of qualifying
event, Employees, spouses of Employees, Domestic Partners and dependent children of
Employees/Domestic Partners may be qualified beneficiaries. Under the Plan, qualified
beneficiaries who elect COBRA continuation coverage must pay for COBRA continuation
If you are an Employee, you will become a qualified beneficiary if you will lose your
coverage under the Plan because either one of the following qualifying events occurs:
Your hours of employment are reduced, or
Your employment ends for any reason other than gross misconduct.
If you are the spouse or Domestic Partner of an Employee, you will become a qualified
beneficiary if you will lose your coverage under the Plan because any one of the following
qualifying events occurs:
The Employee dies;
The Employee’s hours of employment are reduced;
The Employee’s employment ends for any reason other than gross misconduct;
The Employee becomes enrolled in Medicare (Part A, Part B, or both);
You become divorced or legally separated from your spouse; or
The domestic partnership is terminated.
Your dependent children and the dependent children of a Domestic Partner will become
qualified beneficiaries if they will lose coverage under the Plan because any one of the
following qualifying events occurs:
The parent/Employee dies;
The parent/Employee's hours of employment are reduced;
The parent/Employee's employment ends for any reason other than his or her gross
The parent/Employee becomes enrolled in Medicare (Part A, Part B, or both);
The parents become divorced or legally separated;
The domestic partnership is terminated; or
The child stops being eligible for coverage under the plan as a “dependent child”.
When is COBRA Coverage Available?
The Plan will offer COBRA continuation to qualified beneficiaries only after the Plan
Administrator has been notified in a timely manner that a qualifying event has occurred.
When the qualifying event is the end of employment or reduction of hours of employment,
death of the Employee, or enrollment of the Employee in Medicare (Part A, Part B, or both),
the employer must notify the Plan Administrator of the qualifying event.
Employees Must Give Notice of Some Qualifying Events
For the other qualifying events (divorce or legal separation of the Employee and spouse or a
dependent child's losing eligibility for coverage as a dependent child), you must notify the
Plan Administrator. The Plan requires you to notify the Plan Administrator in writing within
60 days after the later of the qualifying event or the loss of coverage.
IF YOU, YOUR SPOUSE, DOMESTIC PARTNER OR DEPENDENT CHILDREN DO NOT
ELECT CONTINUATION COVERAGE WITHIN THIS 60-DAY ELECTION PERIOD, YOU
WILL LOSE YOUR RIGHT TO ELECT CONTINUATION COVERAGE.
How is COBRA Coverage Provided?
Once the Plan Administrator receives notice that a qualifying event has occurred, COBRA
continuation coverage will be offered to each of the qualified beneficiaries. Each qualified
beneficiary will have an independent right to elect COBRA continuation coverage. Covered
Employees may elect COBRA continuation coverage on behalf of their spouses and
Domestic Partners, and parents may elect COBRA continuation coverage on behalf of
their children. For each qualified beneficiary who elects COBRA continuation coverage,
COBRA continuation coverage will begin either (1) on the date of the qualifying event or (2)
on the date that Plan coverage would otherwise have been lost, depending on the nature of
How long will COBRA Coverage Last?
COBRA continuation coverage is a temporary continuation of coverage. When the
qualifying event is the death of the Employee, your divorce or legal separation, or a
dependent child losing eligibility as a dependent child, COBRA continuation coverage lasts
for up to 36 months.
When the qualifying event is the end of employment or reduction of the Employee's hours of
employment, and the Employee became entitled to Medicare benefits less than 18 months
before the qualifying event, COBRA continuation coverage for qualified beneficiaries other
than the Employee lasts until 36 months after the date of Medicare entitlement. For
example, if a covered Employee becomes entitled to Medicare eight months before the date
on which his employment terminates, COBRA continuation coverage for his spouse and
children can last up to 36 months after the date of Medicare entitlement, which is equal to 28
months after the date of the qualifying event (36 months minus eight months).
Otherwise, when the qualifying event is the end of employment or reduction of the
Employee's hours of employment, COBRA continuation coverage generally lasts for only up
to a total of 18 months. There are two ways in which this 18-month period of COBRA
continuation coverage can be extended.
Disability Extension of 18-month Period of Continuation Coverage
If you or anyone in your family covered under the Plan is determined by the Social Security
Administration or PERA to be disabled and you notify the Plan Administrator in a timely
fashion, you and your entire family may be entitled to receive up to an additional 11 months
of COBRA continuation coverage, for a total maximum of 29 months. The disability would
have to have started at some time before the 60th day of COBRA continuation coverage
and must last at least until the end of the 18-month period of continuation coverage. This
notice should be sent to the HealthSmart COBRA Administrator.
Second Qualifying Event Extension of 18-month Period of Continuation Coverage
If your family experiences another qualifying event while receiving COBRA continuation
coverage, the spouse and dependent children in your family can get additional months of
COBRA continuation coverage, up to a maximum of 36 months. This extension is available
to the spouse and dependent children if the former Employee dies, or gets divorced or
legally separated. The extension is also available to a dependent child when that child
stops being eligible under the Plan as a dependent child, but only if the event would have
caused the spouse or dependent child to lose coverage under the Plan had the first
qualifying event not occurred. In all of these cases, you must make sure that the Plan
Administrator is notified of the second qualifying event within 60 days of the second
qualifying event. This notice must be sent to the HealthSmart COBRA Administrator.
Continuation coverage will be terminated before the end of the maximum period if:
any required premium is not paid in full on time,
a qualified beneficiary first becomes covered, after electing continuation coverage, under
another group health plan that does not impose any preexisting condition exclusion for a
preexisting condition of the qualified beneficiary,
a qualified beneficiary first becomes entitled to Medicare benefits (under Part A, Part B,
or both) after electing continuation coverage, or
the employer ceases to provide any group health plan for its employees.
Continuation coverage may also be terminated for any reason the Plan would terminate
coverage of a participant or beneficiary not receiving continuation coverage (such as fraud).
If You Have Questions
If you have questions about your COBRA continuation coverage, you should contact the
HealthSmart COBRA Administrator at 1-800-423-4445 or send an email to
COBRA Premium Payment Guidelines
COBRA Premium Payment guidelines will be provided at the time of COBRA enrollment.
The monthly premium for continuation of the Health Care Flexible Spending Account is
based on the annual amount you choose to contribute to the account and the number of
months remaining under COBRA coverage during the period for which the employee made
the election. The Plan may charge additional administrative fees for continued participation.
Keep Your Plan Administrator Informed of Address Changes
In order to protect your family's rights, you should keep the Plan Administrator
informed of any changes in the addresses of family members. You should also keep a
copy, for your records, of any notices you send to the Plan Administrator.