Health Care & Benefits Division

Consolidated Omnibus Budget Reconciliation Act (COBRA)

 

What is COBRA continuation coverage?

COBRA continuation coverage is a continuation of the State of Montana Plan coverage when it would otherwise end because of a life event. This is also called a “qualifying event.” Specific qualifying events are listed later in this notice. After a qualifying event, COBRA continuation coverage must be offered to each person who is a “qualified beneficiary.” You, your spouse, and your dependent children could become qualified beneficiaries if coverage under the State of Montana Plan is lost because of the qualifying event. Under the Plan, qualified beneficiaries who elect COBRA continuation coverage must pay for COBRA continuation coverage.

If you’re an employee, you’ll become a qualified beneficiary if you lose your coverage under the Plan because of the following qualifying events:

  • Your hours of employment are reduced, or
  • Your employment ends for any reason other than your gross misconduct.

If you’re the spouse of an employee, you’ll become a qualified beneficiary if you lose your coverage under the Plan because of the following qualifying events:

  • Your spouse dies;
  • Your spouse’s hours of employment are reduced;
  • Your spouse’s employment ends for any reason other than his or her gross misconduct;
  • Your spouse becomes entitled to Medicare benefits (under Part A, Part B, or both); or
  • You become divorced or legally separated from your spouse.

Your dependent children will become qualified beneficiaries if they lose coverage under the Plan because of the following qualifying events:

  • The parent-employee dies;
  • The parent-employee’s hours of employment are reduced;
  • The parent-employee’s employment ends for any reason other than his or her gross misconduct;
  • The parent-employee becomes entitled to Medicare benefits (Part A, Part B, or both);
  • The parents become divorced or legally separated; or
  • The child stops being eligible for coverage under the Plan as a “dependent child.”

 

When is COBRA continuation coverage available?

The Plan will offer COBRA continuation coverage to qualified beneficiaries only after the Plan Administrator, Allegiance COBRA Services Inc, has been notified that a qualifying event has occurred. The State of Montana will notify Allegiance COBRA Services of the following qualifying events:

  • The end of employment or reduction of hours of employment;
  • Death of the employee;
  • Dependent child losing eligibility due to aging off the Plan

For all other qualifying events (divorce or legal separation of the employee and spouse or a dependent child’s losing eligibility for coverage as a dependent child due to divorce or legal separation), you must notify the Health Care and Benefits Division within 60 days after the qualifying event occurs. You must make an online Mid-Year Change or you can contact the following for more information:

Health Care & Benefits Division
Phone: (800) 287-8266, (406) 444-7462
TTY: (406) 444-1421
Fax: (406) 444-0080
Email: 
benefitsquestions@mt.gov

 

How is COBRA continuation coverage provided?

Once the Health Care and Benefits Division has notified Allegiance COBRA Services Inc, that a qualifying event has occurred, COBRA continuation coverage will be offered to each of the qualified beneficiaries. Each qualified beneficiary will have an independent right to elect COBRA continuation coverage. Covered employees may elect COBRA continuation coverage on behalf of their spouses, and parents may elect COBRA continuation coverage on behalf of their children.

COBRA continuation coverage is a temporary continuation of coverage that generally lasts for 18 months due to employment termination or reduction of hours of work. Certain qualifying events, or a second qualifying event during the initial period of coverage, may permit a beneficiary to receive a maximum of 36 months of coverage.

There are also ways in which this 18-month period of COBRA continuation coverage can be extended:

Disability extension of 18-month period of COBRA continuation coverage

If you or anyone in your family covered under the Plan is determined by Social Security to be disabled and you notify the Plan Administrator in a timely fashion, you and your entire family may be entitled to get up to an additional 11 months of COBRA continuation coverage, for a maximum of 29 months. The disability would have to have started at some time before the 60th day of COBRA continuation coverage and must last at least until the end of the 18-month period of COBRA continuation coverage. [Add description of any additional Plan procedures for this notice, including a description of any required information or documentation, the name of the appropriate party to whom notice must be sent, and the time period for giving notice.]

Second qualifying event extension of 18-month period of continuation coverage

If your family experiences another qualifying event during the 18 months of COBRA continuation coverage, the spouse and dependent children in your family can get up to 18 additional months of COBRA continuation coverage, for a maximum of 36 months, if the Plan is properly notified about the second qualifying event. This extension may be available to the spouse and any dependent children getting COBRA continuation coverage if the employee or former employee dies; becomes entitled to Medicare benefits (under Part A, Part B, or both); gets divorced or legally separated; or if the dependent child stops being eligible under the Plan as a dependent child. This extension is only available if the second qualifying event would have caused the spouse or dependent child to lose coverage under the Plan had the first qualifying event not occurred.

 

When Will COBRA Continuation Coverage End?

COBRA Continuation Coverage and any coverage under the Plan that has been elected with respect to any Qualified Beneficiary will cease on the earliest of the following: 

  • On the date the Qualified Beneficiary becomes covered under another group health plan or health insurance. 
  • On the date, after the date of election for COBRA Continuation Coverage, that the Qualified Beneficiary becomes enrolled in Medicare (either Part A and Part B). 
  • On the first date that timely payment of any premium required under the Plan with respect to COBRA Continuation Coverage for a Qualified Beneficiary is not made to the Plan Administrator.
  • On the date the Employer ceases to provide any group health plan coverage to any Employee. 
  • On the date of receipt of written notice that the Qualified Beneficiary wishes to terminate COBRA Continuation Coverage. 
  • On the date that the maximum coverage period for COBRA Continuation Coverage ends, as follows: 
    • Eighteen (18) months for a former employee who is a Qualified Beneficiary as a result of termination, or reduction in hours, of employment; 
    • Eighteen (18) months for a Dependent who is a Qualified Beneficiary unless a second Qualifying Event occurs within that eighteen-month period entitling that Dependent to an additional eighteen (18) months; 
    • For the Dependent who is a Qualified Beneficiary as a result of termination, or reduction in hours, of employment of the former employee if that former employee enrolled in Medicare before termination, or reduction in hours, of employment, the later of eighteen (18) months from the Qualifying Event, or thirty-six (36) months following the date of enrollment in Medicare. 
    • On the first day of the month beginning thirty (30) days after a Qualified Beneficiary is determined to be no longer disabled by the Social Security Administration if the Qualified Beneficiary was found to be disabled on or within the first sixty (60) days of the date of the Qualifying Event and has received at least eighteen (18) months of COBRA Continuation Coverage. COBRA Continuation Coverage will also terminate on such date for all Dependents who are Qualified Beneficiaries as a result of the Qualifying Event unless that Dependent is entitled to a longer period of COBRA Continuation Coverage without regard to disability.
    • Twenty-nine (29) months for any Qualified Beneficiary if a Disability Extension Period of COBRA Continuation Coverage has been granted for such Qualified Beneficiary. 
    • Thirty-six (36) months for all other Qualified Beneficiaries. 
  • On the same basis that the Plan can terminate for cause the coverage of a similarly situated non-COBRA Participant. 

 

Are there other coverage options besides COBRA Continuation Coverage?

Yes. Instead of enrolling in COBRA continuation coverage, there may be other coverage options for you and your family through the Health Insurance Marketplace, Medicare, Medicaid, Children’s Health Insurance Program (CHIP), or other group health plan coverage options (such as a spouse’s plan) through what is called a “special enrollment period.” Some of these options may cost less than COBRA continuation coverage. You can learn more about many of these options at healthcare.gov.

 

Can I enroll in Medicare instead of COBRA continuation coverage after my group health plan coverage ends?

In general, if you don’t enroll in Medicare Part A or B when you are first eligible because you are still employed, after the Medicare initial enrollment period, you have an 8-month special enrollment period to sign up for Medicare Part A or B, beginning on the earlier of

  • The month after your employment ends; or
  • The month after group health plan coverage based on current employment ends.

If you don’t enroll in Medicare and elect COBRA continuation coverage instead, you may have to pay a Part B late enrollment penalty and you may have a gap in coverage if you decide you want Part B later. If you elect COBRA continuation coverage and later enroll in Medicare Part A or B before the COBRA continuation coverage ends, the Plan may terminate your continuation coverage. However, if Medicare Part A or B is effective on or before the date of the COBRA election, COBRA coverage may not be discontinued on account of Medicare entitlement, even if you enroll in the other part of Medicare after the date of the election of COBRA coverage.

If you are enrolled in both COBRA continuation coverage and Medicare, Medicare will generally pay first (primary payer) and COBRA continuation coverage will pay second. Certain plans may pay as if secondary to Medicare, even if you are not enrolled in Medicare. For more information visit medicare.gov/medicare-and-you.

 

If you have questions

Questions concerning your Plan or your COBRA continuation coverage rights should be addressed to the Plan Administrator:

Allegiance COBRA Services Inc
PO Box 2097
Missoula, MT 59806
Phone: (800) 259–2738

 

For more information about your rights under the Employee Retirement Income Security Act (ERISA), including COBRA, the Patient Protection and Affordable Care Act, and other laws affecting group health plans, contact the nearest Regional or District Office of the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) in your area or visit dol.gov/ebsa. For more information about the Marketplace, visit healthcare.gov.

 

Keep your Plan informed of address changes

To protect your family’s rights, let Allegiance COBRA Services Inc know about 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.

COBRA Resources

 

Plan Administrator 

Allegiance COBRA Services

Mailing Address:
Allegiance COBRA Services, INC. 
PO Box 2097
Missoula, MT 59806

 

Phone: (800) 259–2738

 

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