COBRA

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

COBRA requires that your group plan allow qualified persons (as defined below) to continue group health coverage after it would otherwise end. COBRA applies to group health plans maintained by an employer for medical, dental, vision, prescription, medical reimbursement, and certain Employee Assistance Programs. Generally, COBRA does not apply to life insurance or disability.

• Administrative Services
• Services Provided
• Frequently Asked Questions
  
  

COBRA Administrative Services

Wellmark, Inc. will only provide COBRA administrative services for its own products. Standard pricing for COBRA Administration is $100/participant, with a minimum fee of $250 at initial enrollment and each renewal. Billing is based on the number of COBRA participants covered when administration begins and on each renewal date. A COBRA Administrative Services Agreement must be completed for COBRA services to begin.

Services Provided

Wellmark, Inc. will provide COBRA clients with an Initial Notice and Continuation of Health Coverage Notice form that is to be distributed to all covered employees and spouses as an Initial Notice and also distributed to qualified beneficiaries at the time of a COBRA Qualifying Event. Wellmark, Inc. will also provide customized COBRA Election Forms, a sample cover letter, and a sample Letter of Unavailability for use in conjunction with the COBRA Notice. However, it remains the client's responsibility to provide the Initial Notice, to monitor COBRA events, and to mail the COBRA Notice and Election Form at the time of a COBRA Qualifying Event.

If an employee, spouse, or dependent chooses to elect COBRA coverage, eligible participants are instructed to send their completed COBRA Election Form to Wellmark, Inc.

Participants will be billed by Wellmark, Inc. for their premiums. Payments are made directly to Wellmark.

COBRA participants continue to use their identification cards without interruption. Claims are filed and processed exactly as they were under group coverage.

Within the COBRA Department, maximum coverage periods are tracked for those who have elected COBRA. Other notifications provided by the COBRA Department will include extension notifications and rate change notification. Open enrollment services may be provided upon request. As participants approach the end of their coverage periods, they are notified of the date on which their COBRA coverage will end. At this time information is also provided regarding the availability of coverage under individual coverages, including conversion coverage.

Frequently Asked Questions about COBRA

Q. Who must comply with COBRA?
A. All employers who had 20 or more employees on 50 percent of its typical business days during the preceding calendar year must comply with COBRA. The only exceptions are:

• Federal Government
• Church Plans (within meaning of Section 414(e))

Q. How do I determine Employee Count?
A. You must include all full and part time employees regardless of their eligibility for the group health plan. Part-time employees are counted as a fraction of a full-time employee.

Q. What is a Qualified Beneficiary?
A Qualified Beneficiary is an individual who is covered under the employer's group health plan the day before a COBRA Qualifying Event occurs. A Qualified Beneficiary is the covered employee, covered spouse or dependent of the employee, or any child born to, or placed for adoption with, the covered employee during the period of continuation coverage.

Q. What are the rights of the Qualified Beneficiaries?
A. Each Qualified Beneficiary has the same rights under the group health plan as a "similarly situated active employee".

Q. What are the 18 month Qualifying Events?
A. The qualifying events are:

• Voluntary Termination
• Involuntary Termination(Excluding Gross Misconduct)
• Reduction of Hours or Layoff

Q. What are the 36 month Qualifying Events?
A. The qualifying events are:

• Death of Employee
• Employee's Medicare Entitlement
• Divorce or Legal Separation
• Dependent Child Ceasing to be a Dependent
• Plan Bankruptcy Under Title 11 of U.S. Code (Retirees Only)

For more information about Wellmark's COBRA Administration Service, contact the COBRA team at 800-694-4105.

Copyright© 2008 Wellmark, Inc. All Rights Reserved.
Wellmark Blue Cross and Blue Shield is an Independent Licensee of the Blue Cross and Blue Shield Association doing business in Iowa and South Dakota. Blue Cross®, Blue Shield®, and the Cross® and Shield® symbols are registered marks of the Blue Cross and Blue Shield Association, an Association of Independent Blue Cross and Blue Shield Plans.