Participation in IU-sponsored medical or dental coverage ends on the date that:
- the plan terminates; or
- you fail to make all required contributions; or
- your employment terminates; or
- you are no longer an eligible employee.
Coverage for your dependents terminates when:
- your coverage terminates; or
- they become eligible for employee coverage; or
- they cease to meet the definition of a dependent; or
- all dependent coverage is discontinued under the plan.
Under federal law, employees have the right to continue healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), and in the case of termination due to military service, under the Uniformed Services Employment and Reemployment Rights Act (USERRA).
You and your covered dependents have the opportunity to temporarily extend your healthcare coverage through COBRA at group rates in instances where coverage under the plan would otherwise end.
You and/or your dependents are responsible for the entire cost of COBRA coverage plus a 2% administrative charge. COBRA continuation coverage is offered only to “qualified beneficiaries” and only after a “qualifying event” has occurred.
A qualified beneficiary is an employee who was covered by an IU-sponsored health plan on the day before a qualifying event occurred, and the employee’s covered spouse and child(ren).
Qualifying events are events that cause an individual to lose IU-sponsored health coverage. As a covered employee, you become a qualified beneficiary if you lose your coverage because of the following qualifying events:
- Your hours of employment are reduced, or
- Your employment ends for any reason other than your gross misconduct.
Your covered dependents also have a right to elect COBRA coverage (independent from you) if they lose healthcare coverage due to any of the following qualifying events:
- You pass away
- Your hours of employment are reduced
- Your employment ends for any reason other than your gross misconduct
- You become entitled to Medicare benefits (under Part A, Part B, or both)
- If your spouse and you divorce or legally separate
- For children, they stop being eligible for coverage under the plan as a “dependent child”
Coverage is extended only to those who are covered at the time of termination and may only continue at the level of coverage that was in effect on the day of termination, or a lower level of coverage.
If moving out of a health plan’s medical network service area, coverage may be changed to another IU-sponsored health plan that provides benefits in the new location.
Under COBRA regulations, you or your dependents must inform the university if the qualifying event is a divorce, legal separation, or a child losing their qualifying status. Such notice must be within 30 days of the latter of the following dates: date of the event, or the date on which coverage would end under the plan because of the event.
When the university determines that you or your dependents have experienced a qualifying event, IU will provide you with written notice of your COBRA rights and an application for coverage. You and/or your dependents have 60 days to elect coverage from:
- The date of the qualifying event; or
- The date of the COBRA offer letter, whichever is later.
Each qualified beneficiary has a separate right to elect continuation coverage, but a parent may elect to continue coverage on behalf of any/all qualified children. You or your spouse can elect continuation coverage on behalf of all of the qualified beneficiaries. If you elect COBRA coverage and have a newborn child placed with you for adoption, then that child will be considered a dependent for COBRA purposes.
When deciding whether or not to elect continuation coverage, you should take into account any other group health plan options that are available to you and your family (such as a spouse’s plan). When you lose coverage, you have the right to request HIPAA Special Enrollment in another group health plan for which you are otherwise eligible within 30 days after your IU-sponsored health coverage ends.
The length of COBRA coverage is between 18 and 36 months depending on the type of qualifying event:
- 18 months when coverage is lost due to termination (other than for gross misconduct) or reduction in hours;
- 36 months when coverage is lost due to death, divorce, legal separation, or a child’s losing qualifying status; or
- 29 months when coverage is lost and the enrollee becomes disabled within 60 days of termination.
If you do not elect COBRA within 60 days, the option to reinstate IU-sponsored coverage ends and you will not have coverage beyond the date your coverage as an active employee ended. COBRA coverage may also terminate for any of the following reasons:
- Premiums are not paid on time;
- The enrollee gains coverage under another group health plan which does not limit coverage for an enrollee’s pre-existing condition;
- The enrollee becomes entitled to Medicare;
- The enrollee’s COBRA coverage was extended due to disability, and there is a final determination that the enrollee is no longer disabled; and/or
- IU no longer provides group health coverage to any employees.
COBRA benefits are provided subject to continued eligibility for coverage. Indiana University has the right to terminate COBRA coverage retroactive to the date that eligibility ends.
You may also consider other healthcare coverage options through the Health Insurance Marketplace or Medicaid. Some of these options may cost less than COBRA continuation coverage. You can learn more about many of these options at www.healthcare.gov and www.medicaid.gov.
