COVID-19 UPDATE AND FAQS FOR COBRA PARTICIPANTS AND BENEFICIARIES
Please enjoy this detailed report from a vendor partner of ours that we have worked with for years - Sterling Administration
On April 28, 2020, the Department of Labor (DOL) issued EBSA Disaster Relief Notice 2020-01, which extends COBRA grace periods to all plan participants. This relief information was updated in EBSA Disaster Relief Notice2021-01(published February 26, 2021).
WHAT YOU NEED TO KNOW
· This extension applies to both the COBRA election time frame as well as the time frame for making your initial COBRA premium payment.
· The extensions are retroactive to the March 13, 2020 national emergency declaration date.
· COBRA-eligible employees and beneficiaries have an extension of up to one year from their COBRA qualification date, or 60 days after the date the President announces an end to the national emergency.
· To date, there is still no declared end date for the national emergency.
Sterling Administration will continue to accommodate these extensions. Please note, Sterling’s COBRA notice documents sent to the COBRA beneficiaries continue to include standard COBRA deadlines. Employees and beneficiaries with COBRA-qualifying events or in their COBRA election period on or after March 1, 2020 will receive requested extensions.
Q1: What are the extensions are available to me as the COBRA participant?
Under the Final Rule, all group health, disability, and pension benefit plans subject to ERISA or the Code must disregard the period beginning March 1, 2020 and ending sixty (60) days after the federal government declares an end to the National Emergency (referred to as the "Outbreak Period" in the Final Rule). The Rule extends the following benefit periods and deadlines as they relate to COBRA benefits during this time:
· The 30- or 60-day period (if applicable) to request special enrollment in a covered health and welfare benefit plan
· The 60-day timeline for a participant to elect COBRA continuation coverage;
· The participant deadline for making COBRA premium payments.
Q2: I received my COBRA notice with deadlines. Are any of these timeframes extended, and can I still enroll for COBRA?
As long as your COBRA effective date starts on or after March 1, 2020, or you were in your 60-day election period on or after March 1, 2020, you are eligible to receive an extension of up to one year on the deadlines to enroll in and pay for your COBRA coverage. Disaster Relief Notice 2021-01 provided the following examples to illustrate the duration of the relief under the Notices:
· If a qualified beneficiary, for example, would have been required to make a COBRA election by March 1, 2020, the Joint Notice delays that requirement until February 28, 2021, which is the earlier of 1 year from March 1, 2020 or the end of the Outbreak Period (which remains ongoing).
· Similarly, if a qualified beneficiary would have been required to make a COBRA election by March 1, 2021, the Joint Notice delays that election requirement until the earlier of 1 year from that date (i.e., March 1, 2022) or the end of the Outbreak Period.
In both examples, the permitted extension period provided by the Notice 2021-01 does not exceed one year.
Q3: Do I have to pay for coverage months I did not use?
Yes, you will have to pay for any months after your active coverage terminated. COBRA is a retroactive continuation of coverage, and you cannot have a lapse. To have coverage for those months, you must pay the COBRA premium.
Q4: Can I get a discount since I cannot afford to pay the full premium?
There is no discount for COBRA premiums. Contact Sterling on how you can get caught up with your payments. Note, that you need to pay your monthly premium to have coverage.
Q5: Do I have to pay my monthly premium within the 30-day grace period?
Yes. You will have to pay for the premium within the coverage month.
Note that there is no reduction in COBRA premium amounts due under these regulations. You will have to pay for each month of coverage under COBRA in full and cannot have a gap in coverage.
Q6: I was furloughed from my job due to COVID-19; am I eligible for COBRA coverage continuation?
Yes. Complete and send in the COBRA election form to Sterling with your payment for reinstatement processing with your health insurance carrier. When you start working again, contact Sterling to close your COBRA account.
Q7: Can I obtain other health coverage?
Your other health coverage options may include the following:
· Special Enrollment in Another Group Health Plan - If other group health coverage is available (for example, if your spouse's employer offers a group health plan for which you are eligible), you may consider requesting a special enrollment period to enroll in the other coverage. A special enrollment period gives you (and your family) an opportunity to enroll in a plan for which you are otherwise eligible outside of the plan's open enrollment period.
· Health Insurance Marketplace – You may contact the marketplace exchange for options available to you at www.HealthCare.gov or call 1-800-318-2596. The federal Marketplace website offers "one-stop shopping" searches that allow you to find and compare various private health insurance options. Marketplace coverage also provides a possible tax credit to lower your monthly premiums and cost-sharing reductions to your out-of-pocket costs for deductibles, coinsurance, and copayments. This way, you can see your exchange premium, deductibles, and out-of-pocket costs before you decide to enroll in COBRA.
Q8: If my employer's physical location temporarily closes due to the COVID-19 outbreak, am I still covered by my employer's group health plan?
As long as your employer remains in business, sponsors a health plan, and you remain employed and meet your employer's eligibility requirements, you would generally remain covered under your existing health plan, even if the employer's physical location closes. However, if your employer terminates your coverage due to furlough (temporary leave of absence), that is considered a qualifying event for you to enroll in COBRA continuation
Q9: Am I eligible for COBRA if my employer/company closed or went bankrupt, and there is no health plan?
If there is no longer an active health plan, then there is no COBRA coverage available. You may seek individual coverage through the marketplace exchange (see Question 7 for more information).