COBRA Benefits Continuation Policy US

COBRA Benefits Continuation Policy US

Company Name: [Company Name]
Effective Date: [Effective Date]
Policy Owner: [Policy Owner]
Approved By: [Approved By]
Group Health Plan Administrator: [Group Health Plan Administrator]

PURPOSE & SCOPE
- This policy establishes the Organization's procedures for administering continuation of group health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), ensuring compliance with all federal requirements and timely notification to eligible individuals.
- This policy applies to all group health plans maintained by the Organization and to all employees, former employees, spouses, and dependent children who are or may become qualified beneficiaries under COBRA.
- The Organization's COBRA Administrator shall be responsible for ensuring timely notification, accurate premium calculation, and proper administration of all COBRA continuation coverage in accordance with this policy and applicable law.

QUALIFYING EVENTS & BENEFICIARIES
- A qualifying event is any event that causes a covered employee, spouse, or dependent child to lose coverage under the Organization's group health plan. Qualifying events include termination of employment, reduction in hours, death of the covered employee, divorce, and a dependent child ceasing to meet eligibility requirements.
- A qualified beneficiary is any individual who was covered under the Organization's group health plan on the day before a qualifying event and who would lose coverage as a result of the qualifying event. This includes the covered employee, their spouse, and dependent children.
- The Organization must notify the group health plan administrator of certain qualifying events within 30 days of the event. Employees and family members are responsible for notifying the Organization of qualifying events involving divorce, legal separation, or a dependent child's loss of eligibility within 60 days.

ELECTION PERIOD & ENROLMENT
- Qualified beneficiaries shall have a 60-day election period to choose whether to continue group health coverage under COBRA. The election period begins on the later of the date of the qualifying event or the date the COBRA election notice is provided.
- The COBRA election notice shall be provided to each qualified beneficiary within 14 days of the plan administrator receiving notice of the qualifying event. The notice shall contain all information required under COBRA regulations, including the available coverage, premium amounts, and election deadline.
- Upon timely election, COBRA coverage shall be retroactive to the date of the qualifying event, ensuring that there is no gap in health coverage. The qualified beneficiary shall have 45 days from the date of election to make the initial premium payment.

COVERAGE DURATION & PREMIUMS
- COBRA continuation coverage is available for up to 18 months for qualifying events involving termination of employment or reduction in hours, and up to 36 months for qualifying events involving death, divorce, Medicare entitlement, or loss of dependent status.
- The premium for COBRA continuation coverage shall not exceed 102 percent of the full cost of coverage for similarly situated active employees, including both the employer and employee share. Premiums shall be recalculated annually upon plan renewal.
- COBRA coverage shall terminate before the maximum coverage period upon the occurrence of certain events, including failure to make timely premium payments, the qualified beneficiary obtaining other group health coverage, the qualified beneficiary becoming entitled to Medicare, or the Organization ceasing to maintain any group health plan.

ADMINISTRATION, COMPLIANCE & PENALTIES
- The Organization shall provide a COBRA General Notice to all new employees and their spouses within 90 days of the date group health plan coverage begins, informing them of their COBRA rights in the event of a future qualifying event.
- The COBRA Administrator shall maintain complete records of all COBRA notices, elections, premium payments, and coverage periods for a minimum of 6 years in accordance with ERISA record-keeping requirements.
- Failure to comply with COBRA requirements may expose the Organization to significant penalties, including an excise tax of $100 per day per qualified beneficiary for each day of non-compliance, ERISA statutory penalties of $110 per day, and liability for legal fees and damages in private litigation.