On April 7, 1986, a federal law was enacted (Public Law 99-272, Title X) requiring that most employers sponsoring group health plans offer employees and their families the opportunity for a temportaty extension of health coverage (called "continuation coverage") at group rates in certain instances where coverage under this plan would otherwise end. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
If you are a Covered Member of a company covered by Fleet Owners Insurance Fund you have the right to choose this continuation coverage if you lose your group health coverage because of reduction in your hours of employment or the termination of your employment (for reasons other than gross misconduct on your part).
If you are a spouse of an covered member by Fleet Owners Insurance Fund, you have the right to choose continuation coverage for yourself if you lose group health coverage under Fleet Owners Insuracne Fund 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 spouses hours of employment with a contributing employer:
3) Divorce or legal separation from your spouse; or
4) Your spouse becomes entitled to Medicare.
In the case of a dependent child of a covered member by Fleet Owners Insurance Fund, he or she has the right to continuation coverage if group health coverage under Fleet Owners Insurance Fund is lost for any of the following five reasons:
1) The death of the covered member;
2) A termination of the covered member's employment (for reasons other than gross misconduct) or reduction in the covered member's hours of employment with a contributing employer;
3) The covered member's divorce or legal separation;
4) The covered member becomes entitled to Medicare; or
5) The dependent child ceases to be a "dependent child" under Fleet Owners Insurance Fund.
Under the law, the covered member or a family member has the responsibility to inform the Fleet Owners Insurance Fund of a divorce, legal separation, or a child losing dependent status under Fleet Owners Insurance Fund within 60 days of the date of the event. Your employer has the responsibility to notify the Fleet Owners Insurance Fund of the covered member's death, termination, reduction in hours of employment or Medicare entitlement. Similar rights may apply to certain retirees, spouses, and dependent children if your employer commences a bankruptcy proceeding and these individuals lose coverage.
When Fleet Owners Insurance Fund is notified of a qualifying event, the Fleet Owners Insurance Fund will notify you that you have the right to choose continuation coverage. Under the law, you have at least 60 days from the date you would loose coverage to inform Fleet Owners Insurance Fund that you want continuation coverage.
If you do not choose continuation coverage on a timely basis, your group health insurance coverage will end.
If you choose continuation coverage, the Fleet Owners Insurance Fund 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 covered members 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 of hours. In that case, the required continuation coverage periodis 18 months. This 18 months may be extended for the affected individuals to 36 months from termination of employment if other events (such as death, divorce, legal separation, or Medicare entitlement) occur during that 18-month period.
In no event will continuation coverage last beyond 36 months from the date of the event that orginally made a qualified beneficiary eligible to elect coverage. The 18 months may be extended to 29 months if a qualified beneficiary is determined by the Social Security Administration to be disabled (for Social Security disability purposes) at any time during the first 60 days of COBRA coverage. This 11-month extension is available to all individuals who are qualified beneficiaries due to a termination or reduction in hours of employment. To benefit from this extension, a qualified beneficiary must notify the Fleet Owners Insurance Fund of that determination within 60 days before the end of the original 18 month period. The affected individual must also notify the Fleet Owners Insurance Fund within 30 days of any final determination that the individual is no longer disabled.
A child who is born to or placed for adoption with the covered member during a period of COBRA coverage will be eligible to become a qualified beneficiary. In the accordance with the terms of the Fleet Owners Insurance Fund and the requirements of federal law, these qualified beneficiaries can be added to COBRA coverage upon proper notification of the birth or adoption.
However, the law also provides that continuation coverage may be cut short for any of the following five reasons:
- Your employer no longer provides group health coverage to any of its employees;
- The premium for continuation coverage is not paid on time;
- The qualified beneficiary becomes-after the date he or she elects COBRA coverage- under another group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition he or she may have;
- The qualified beneficiary becomes entitled to Medicare after the date he or she elects COBRA coverage;
- The qualified beneficiary extends coverage for up to 29 months due to disability and there has been a final determination that the individual is no longer disabled.
You do not have to show that you are insurable to choose continuation coverage. However, continuation coverage under COBRA is provided subject to your eligibility for coverage; the Fleet Owners Insurance Fund reserves the right to terminate your COBRA coverage retroactively if you are determined to be ineligible.
Under the law, you may have to pay all or part of the premium for your continuation coverage. There is a grace period of at least 30 days for payment of the regularly scheduled premiums.
For COBRA Coverage Based on Type of Qualifying Event, see the following:
Duration of COBRA Coverage
based on type of qualifying event
|Qualifying Event||Beneficiary||Coverage Period|
Termination or reduction in
hours of employment or
|Up to 18 months|
Termination or reduction in
hours of employment, with
SSA disability determination
|Up to 29 months|
Employee entitled to Medicare
Divcorce or legal separation
Death of a covered employee
|Up to 36 months|
|Cessation of dependent status||Dependent Child||Up to 36 months|
The monthly COBRA rate will vary based on the Plan option that the Covered Member had. Contact us at (877) 301-0874 to get the single and family rates for the plans.
The Board of Trustees of the Fund reviewed a report received from the actuaries of the Fund, pertaining to the group health coverage continuation requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
|Coverage for Single|
|Hospital room and board (semi-private)||Prescription Benefits|
Hospital miscellaneous expenses Major
|X-ray and lab benefits||Surgery Benefits|
|Coverage for Family|
|Hospital room and board (semi-private)||Prescription benefits|
Hospital miscellaneous expenses Major
|X-ray and lab benefits||Surgery benefits|
No weekly accident or sick benefits and no life insurance coverage are included in Cobra.
Keep Your Plan Informed of Address Changes
In order to protect your family’s rights, you should keep the Fleet Owners Insurance Fund 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.