Berkshire Health Group
COBRA ADMINISTRATION PROCEDURES
through Gallagher Benefits Services (GBS)
As Berkshire Health Group’s COBRA Plan Administrator, GBS will handle every detail of COBRA, from sending election notices to qualifying beneficiaries to receiving monthly COBRA payments.
The responsibilities of the Berkshire Health Group are few but extremely important!
I. WHEN AN EMPLOYEE ELECTS HEALTH CARE COVERAGE
When you have an employee elect health or dental coverage for the first time, or add any dependents to the policy, it is very important that you give or send the employee and spouse a COBRA Initial Notice. (GBS will provide sample copies of this notice to you.) This notice informs the employee and spouse of their rights under COBRA. We strongly suggest that you send this notice by first class mail, keep a photocopy of the posting (envelope), and have the employee sign that they have received the notice.
II. COBRA QUALIFYING EVENTS
A COBRA Qualified Beneficiary is any individual covered by a group health plan on the day before a qualify event. A qualified beneficiary may be an employee, the employee’s spouse and dependent children, and in certain cases, a retired employee, the retired employee’s spouse and dependent children.
COBRA qualifying events for employees are
Voluntary or involuntary termination of employment for reasons other than “gross misconduct”
Reduction in hours of employment making employee ineligible for group coverage
COBRA qualifying events for spouses are
Termination of the covered employee’s employment for any reason other than “gross misconduct”
Reduction in hours worked by the covered employee
Covered employee becoming entitled to Medicare (doesn’t apply to most governmental employers)
Divorce or legal separation of the covered employee
Death of the covered employee
COBRA qualifying events for dependent children are
Termination of the covered employee’s employment for any reason other than “gross misconduct”
Reduction in hours worked by the covered employee
Loss of “dependent child” status under the plan rules
Covered employee’s becoming entitled to Medicare (doesn’t apply to most governmental employers)
Divorce or legal separation of the covered employee
Death of the covered employee
NOTE: The employee or spouse must notify the employer (who then notifies GBS) or the Plan Administrator directly within 60 days of events consisting of divorce or legal separation or a child’s ceasing to be covered as a dependent under plan rules.
NOTE: The IRS has ruled that leave taken under the Family and Medical Leave Act (FMLA) is not a COBRA Qualifying Event. An employee must be allowed to elect COBRA continuation coverage after the 12 weeks of FMLA leave expires – even if he/she failed to pay health premiums or declined coverage during the leave. Furthermore, the IRS says that the right to COBRA continuation coverage is not conditioned upon the employee’s reimbursement of any premiums the employer paid to maintain the health coverage during the FMLA period!
III. WHEN THERE HAS BEEN A COBRA QUALIFYING EVENT
You must notify GBS within 30 days of a COBRA qualifying event. We urge you to notify GBS as soon as you know about the qualifying event. GBS has provided you with an Employer Notice Form to be sent to GBS. Please feel free to fax or email this form. (GBS fax number: 1-508-832-0491). If you fax the form, there is no need to mail the original.
You must terminate the qualifying beneficiary(s) from his/her health/dental/vision plan. If the qualifying beneficiary elects COBRA, GBS will re-enroll the individual.
If there is a second qualifying event during the COBRA election period ex. divorce after termination of employment or qualification for Social Security Disability, it is the COBRA Qualified Beneficiary’s responsibility to notify the Plan Administrator (GBS). This may extend the COBRA coverage period.
IV. ONCE GBS HAS BEEN NOTIFIED OF A COBRA QUALIFYING EVENT
GBS will send a Notice of Right to Elect COBRA and a COBRA Election Form to the qualifying beneficiary, spouse and dependents, if any. GBS will send this notice by first class mail. The notice will explain to the qualifying beneficiary(s) why COBRA is being offered, the duration of COBRA coverage and cost.
The qualifying beneficiary will need to fill out the COBRA Election Agreement and send it back to GBS.
Please note that the qualifying beneficiary has 60 days upon receiving the notice to respond. During that time, the qualifying beneficiary can change his/her mind as many times as he/she wishes until the 60 days are up.
If a person elects COBRA, GBS will send twelve months’ of coupons to be used when mailing in premium payment checks. Additional coupons will be sent once these are used to cover the duration of the COBRA coverage period. The COBRA enrollees will mail their checks to GBS. GBS will record the date that the checks were postmarked and then send them to the Treasure of BHG. The checks will be made payable to “BHG-Berkshire Health Group-BHG.”
If a COBRA beneficiary sends their payment checks to you by mistake, please note the postmark date and give GBS a call telling us when the check was mailed.
Your monthly BHG trust fund invoice from GBS will include COBRA beneficiaries from your governmental unit. However, they will be listed with no charge since they are billed separately.
V. OPEN ENROLLMENT PERIOD
GBS will mail new rates and renewal information to all COBRA beneficiaries and handle all changes that occur during the open enrollment period for those individuals on COBRA.
VI. ADDITIONAL RESPONSIBILITIES OF BHG GOVERNMENTAL UNITS
Provide GBS with all known address changes for both employee and spouse, as you are made aware of them.
Do not override COBRA policies. Example: There is a 30-day Grace Period for payment of premiums. If the postmark on the envelope containing the premium payment is a date after the 30-day period, the COBRA coverage will be terminated. BHG’s contract with GBS requires that you do not override this policy.