COBRA Administration Procedures

through Gallagher Benefit Services (GBS)

As Cape Cod Municipal Health Group’s COBRA Plan Administrator, GBS will handle
every detail of COBRA, other than providing the Initial Notice. GBS will handle everything from sending election notices to qualifying beneficiaries to receiving monthly COBRA payments.

The responsibilities of each governmental unit within CCMHG are few but extremely important!

***When you have an employee enroll in health or dental coverage for the first time, it is very important that you give or send the employee a COBRA Initial Notice.  If an employee changes their eligibility level from individual to family, you would need to provide this notice to the spouse and/or covered dependents. (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 have the employee sign that they have received the COBRA Initial Notice.

A COBRA Qualified Beneficiary is any individual covered by a group health plan on the day
before a qualifying 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
-Reduction in hours worked by the covered employee
-Covered employee’s becoming entitled to Medicare (doesn’t apply to most governmental
-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
-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
-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!

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 each unit with an Qualifying Event Notice Form to be sent to GBS (QE form (can be  saved filled out electronically – click here). Please feel free to fax 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 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.

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 Form and send it back to GBS.

GBS will notify the governmental unit as to whether COBRA was elected or not. Please note that the qualifying beneficiary has 60 days to respond (60 days from either the date they lose coverage or the date of the notice, whichever is later). 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 a year supply 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 deposit them into the CCMHG COBRA account. The checks will be made payable to “CCMHG”.

If a COBRA beneficiary sends their payment checks to you by mistake, please note the postmark date and send the check to GBS.

Your monthly CCMHG trust fund billing from GBS will include COBRA beneficiaries from your governmental unit listed under a COBRA group number with a zero dollar premium amount.

For CCMHG-sponsored health plans:
GBS will have all the necessary renewal information for health plans offered through
CCMHG and will mail renewal information to all COBRA beneficiaries.

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. CCMHG’s contract with GBS requires that participating governmental units do not override this policy.

Sample Initial Notice Form

Sample Memorandum

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