COBRA is a federal regulation which permits you as an employee or retiree and your eligible covered dependents, to continue your medical (includes pharmacy) or full coverage (includes medical, dental, pharmacy and vision) benefits that were in effect on the day before you or your dependents coverage ended due to circumstances called Qualifying Events.

The continuation of such coverage through COBRA provides you time to find another source of health care, either group coverage through another employer or an individual policy. The group health coverage offered under COBRA is the same coverage PEBP provides to active employees/retirees and their eligible dependents. When the state changes the group health coverages for active employees and their eligible dependents, the group health coverages provided under COBRA will change in the same manner. The COBRA coverage period may be a minimum of 18 months, but no longer than 36 months.

Qualifying Event is a specific event that causes a Qualified Beneficiary to lose coverage. There are several types of Qualifying Events for employees/retirees, their spouses, and dependent children:

• The voluntary or involuntary termination of employment.

• The reduction in work hours which results in loss of coverage, such as part-time status.

• The death of the employee/retiree.

• The divorce of an employee/retiree.

• A covered dependent loses dependent status and no longer qualifies for coverage under the employee/retiree’s plan.

A Qualified Beneficiary has 60 days from the date coverage ends to elect COBRA continuation of coverage:

Actual coverage begins on the day after the last day of the month that coverage ends. For example, your date of termination is December 2, 2004. Coverage ends at the end of the month following termination; December 31, 2004 therefore your COBRA coverage would begin on January 1, 2005.

A Qualified Beneficiary is responsible for paying the entire premium comprised of the actual cost of coverage plus a two percent administrative fee.

If a Qualified Beneficiary is disabled and qualifies for 29 months of COBRA coverage according to Social Security guidelines, the monthly premium for the last 11 months (months 19 through 29), is the total premium and a 50% administrative fee.

Payments/Billing:

Billing statements are mailed to the Qualified Beneficiary’s current address on file. The Qualified Beneficiary is responsible for remitting payment to PEBP. The Qualified Beneficiary has 45 days from the date of election to continue COBRA coverage and to make the first premium payment—which must include payment(s) through the end of the current month. Monthly premiums are due on the first calendar day of each month and are late on the 31st day.

If payment is received late, coverage will be cancelled. Coverage cancelled due to nonpayment of COBRA premiums, cannot be reinstated.

Duration of coverage through COBRA:

An employee and the employee’s enrolled spouse and/or dependent children are allowed to continue coverage for a maximum period of 18 months if coverage would otherwise end due to:

• Termination of employment.

• A reduction in hours.

An enrolled spouse and/or dependent children are allowed to continue coverage for a maximum period of 36 months if coverage would otherwise end due to:

• The death of the covered employee

• The divorce of the covered employee/retiree

• The loss of dependent status e.g., student status

An employee, spouse and/or dependent children entitled to 18 months of coverage are allowed to extend coverage to 29 months if:

• He/she is deemed disabled by Social Security at the time of COBRA enrollment or within 60 days of the Qualifying Event;

• He/she remains disabled during the extended COBRA coverage period;

A Qualified Beneficiary will be able to change their plan:

• During the annual open enrollment period. Any changes to coverage becomes effective July 1.

• When a Qualified Beneficiary moves out of the group health plan’s coverage area.

Events triggering a cancellation of COBRA benefits include the Qualified Beneficiary:

• Fails to pay the premium within the 30-day grace period.

• Becomes entitled to Medicare.

• Becomes covered under another group health plan.

For more detailed information about COBRA, refer to the Plan Year 2009 Master Plan Document.

To determine the monthly premium cost for medical only and full coverage check the COBRA Rate Schedule.