A Federal law, usually called COBRA, requires that most employers sponsoring group health plans offer employees and their families the opportunity for a temporary extension of health coverage (called "continuation coverage") at group rates in certain instances where coverage under the plan would otherwise end.  This notice is intended to inform you, in summary fashion, of your rights and obligations under the continuation coverage provisions of COBRA.  (Both you and your spouse should take the time to read this notice carefully).

If you are an employee of Penn State covered by Healthpass, Hospital/Surgical/Major Medical, an HMO or Dental and Vision, you have a right to choose this continuation coverage if you lose your group health coverage because of a reduction in your hours of employment or the termination of your employment ( for reasons other than gross misconduct on your part).

If you are the spouse of an employee covered by Healthpass, Hospital/Surgical/Major Medical, an HMO or Dental and Vision, you have the right to choose continuation coverage for yourself if you lose group health coverage for any of the following three reasons:

1.    The death of your spouse;

2.    A termination of your spouse's employment (for reasons other than gross misconduct) or reduction in your spouse's hours of employment;

3.    Divorce or legal separation from your spouse.

In the case of a dependent child of an employee covered by Health pass, Hospital/Surgical/Major Medical, an HMO or Dental and Vision, he or she has the right to continuation coverage if group health coverage is lost for any of the following four reasons:

1.    The death of a parent;

2.    The termination of a parent's employment (for reasons other than gross misconduct) or reduction in a parent's hours of employment with Penn State;

3.    Parent's divorce or legal separation;

4.    The dependent ceases to be a "dependent child" under the health insurance plan.

Under COBRA, the employee or family member has the responsibility to inform the Employee Benefits Division of a divorce, legal separation, or a child losing dependent status.  When the Employee Benefits Division is notified that one of these events has happened, it will in turn notify you that you have the right to choose continuation coverage.  Under COBRA, you have 60 days from the date you would lose coverage because of one of the events described above to inform the Employee Benefits Division that you want continuation coverage.  The ELECTION FORM FOR CONTINUATION OF BENEFITS, along with the initial premium payment must be received by the Employee Benefits Division within the above time period.

If you do not choose continuation coverage, your group health insurance will end.

If you choose continuation coverage, Penn State is required to give you coverage which is identical to the coverage provided under the plan to similarly situated employees or family members.  COBRA requires that you be afforded the opportunity to maintain continuation coverage for 3 years unless you lost group health coverage because of a termination or reduction in hours.  In that case, the required continuation coverage period is 18 months.

However, the law also provides that your continuation coverage may be cut short for any of the following three reasons:

1.    Penn State no longer provides group health coverage to any of its employees;

2.    The premium for your continuation coverage is not paid on time;

3.    You become covered by another group health plan, unless that other plan contains an exclusion or limitation with respect to any preexisting condition affecting you or a covered dependent.

You do not have to show that you are insurable to choose continuation coverage.  However, under COBRA, you will have to pay the premium for your continuation coverage.

COBRA also says that, at the end of the 18 month or 3 year continuation coverage period, you must be allowed to enroll in an individual conversion health plan provided under Healthpass, Hosptial/Surgical/Major Medical, or an HMO.

If you have any questions about COBRA, please contact the Employee Benefits Division.  Also, if you have changed marital status, if a dependent ceases to be a "dependent child," or you or your spouse have changed address, please notify the Employee Benefits Division at (814) 865-1473.

OHR 3/92