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SECTION 4.0 - CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1986 (COBRA)

Consolidated Omnibus Budget Reconciliation Act of 1986: Requires that the Trustees offer those eligible employees and dependents whose Health Benefits are scheduled to be terminated, the opportunity of continuing their Group Health Benefits through a series of monthly direct payments for a limited period of time. The following paragraphs are intended to explain and summarize your rights and those of your dependents under this law.

COBRA RIGHTS

  1. Definitions: An "Eligible Employee" is any Employee who has met the Eligibility Requirements of the Plan, but whose coverage is scheduled to be terminated due to failure to meet the Eligibility Requirements of the Plan.

    An "Eligible Dependent" is defined as:
    1. the SPOUSE of an Active Employee, or upon the death of an Eligible Employee, the surviving spouse of such deceased Eligible Employee, and
    2. any Dependent CHILD of such Eligible Employee or deceased Eligible Employee. Dependent CHILD is each unmarried child who has not attained age 19, or an unmarried dependent child under age 25 who is attending a college, university, trade or training school (beyond the high school level) as a full time student. Such child must be dependent upon the employee for support and maintenance.
  2. Employees: If you are an active employee whose benefits are scheduled to be terminated due to having failed to work the required number of hours, you have the right to continue your Group Health Benefits through a series of monthly direct payments for a period of up to eighteen months, starting with the date your regular eligibility under the Plan was scheduled to be terminated due to failure to work the required number of hours.

  3. Disabled Participants: Active employees who become totally disabled prior to age 65 and while eligible hereunder shall be permitted to make Cobra Payments when their normal eligibility terminates. Under Cobra the participant shall be permitted to maintain their Group Health Benefits for themselves and their dependents until such time as they become eligible for Medicare, but not beyond thirty-six months, except that should they become, eligible for Medicare prior to the expiration of such thirty-six month period, they may continue the group health coverage for their dependents on a COBRA payment basis until the expiration of such thirty-six month period

  4. Spouse: Your spouse (husband or wife) also has the right to continue his or her Group Health Benefits on a direct payment basis under any of the following circumstances:

    1. upon your death (providing you were eligible at the time of death).
    2. upon your termination from the Plan due to failure to work the required number of hours.
    3. upon divorce or legal separation from you.
    4. when you become eligible for Medicare and your regular Group Health Benefits are terminated.
  5. Divorced or Legally Separated Spouse: The spouse of an eligible Active Participant following a divorce or legal separation may continue his or her Group Health Coverage on a COBRA payment basis. The spouse of such Active Participant must apply within a sixty-day period immediately following the effective date of such divorce or separation. COBRA payments will be permitted for up to thirty-six months but not after such period, nor for any period following the date such spouse becomes either eligible for Medicare or another Group Health Insurance Plan

  6. Dependent Children: Your dependent children (as defined in the Plan) may also continue their Group Health Benefits on a direct payment basis under any of the following circumstances:

    1. upon your death (providing you and such dependent child were covered at the time of your death).
    2. upon termination of your employment (providing your child was covered at the time of such termination).
    3. upon your divorce or separation.
    4. upon the date your eligibility (and that of your dependent child) ceases due to becoming eligible for Medicare.
    5. the date your dependent child ceases to be a dependent (due to age, marriage, change in student status, etc. [see 1.7].
  7. Coverage for Child or Children: Eligible dependent children who are scheduled to be terminated as a result of attaining age 19, or if a full student, age 25 (as provided under the Plan), may maintain their Group Health Benefits by making Cobra payments. Such Cobra payments may be continued for a period of up to thirty-six months, but not after the date such child ceases to be a dependent of the active participant, or after such child qualifies under another Group Health Insurance Plan.

  8. Widows and Dependent Children of Deceased Employee: Upon the death of an eligible employee, the surviving widow and child or children will be continued for the duration of the Insurance Period in which he died, and thereafter, such dependents may continue their Group Health Benefits through Cobra Payments. Widows of a deceased Active Employee will be given an option to continue their Group Health Benefits through COBRA payments for a period of up to thirty-six months following the death of their spouse. They may elect to continue Group Health Benefits for themselves only (Single Coverage) or for themselves and their dependent children (Widow and Child Coverage). The Election Form, together with the initial self-payment will be due thirty days from the date the self-payment notice is given.

  9. Notification and Payment Requirement: When an Active Participant's eligibility for benefits is scheduled to be terminated due to having worked an insufficient number of hours, such participant will be notified of his right to make a self-payment. A participant who wishes to continue his/her coverage through self-payment must then complete and return the payment coupon from his/her Work History Report, together with the initial payment. Such payment and election forms are due within fifteen days from the date of notice. All monthly payments must be made by the first day of the month in which such payment is due.

  10. Limitations: The privilege of continuing an individual participant's or dependent's Group Health Benefits through COBRA payments shall cease upon the first of any of the following events:

    1. when the participant or dependent fails to make the required COBRA payment on a timely basis.
    2. the date such participant becomes covered under another group health plan.
    3. the date such participant becomes eligible for Medicare.
    4. in the case of a divorced spouse, the date such person remarries or becomes covered under another group plan