HEALTH PLAN LEGAL NOTICES. Health Insurance Marketplace Group Health Continuation Coverage Under COBRA Prescription Drug Coverage and Medicare

Transcription

1 HEALTH PLAN LEGAL NOTICES Health Insurance Marketplace Group Health Continuation Coverage Under COBRA Prescription Drug Coverage and Medicare

2 New Health Insurance Marketplace Coverage Options and Your Health Coverage Eaton is required by the Affordable Care Act to provide all employees with this notice. It provides some basic information about the new Marketplace and the employment-based health coverage offered by Eaton. What is the Health Insurance Marketplace? The Marketplace is a website provided by the government that compares private health insurance options, and can help you evaluate your coverage options, including your eligibility and the cost for coverage through the Marketplace. On the site, you can fill out an application to be used to help you find and compare nonemployment based, private health insurance options. Open enrollment for health insurance coverage through the Marketplace begins in October 2013 for coverage starting on January 1, Can I Save Money on my Health Insurance Premiums in the Marketplace? You may be eligible for a new kind of tax credit that lowers the monthly premium you would otherwise pay for health insurance you buy through the Marketplace. Your eligibility for the credit, and the amount of your savings, depends on your household income. However, you will not be eligible for lower Marketplace premiums if you are eligible for health coverage offered by Eaton that meets certain standards. Does the Health Coverage Offered by Eaton Affect Eligibility for Tax Credit through the Marketplace? Yes. You generally are not eligible for the tax credit that lowers your monthly Marketplace premiums if you are eligible for the health coverage offered by Eaton. In general, employees may be eligible for a premium tax credit if the health coverage offered by their employer does not provide minimum value 1 or is not affordable. Eaton has determined that the health coverage it offers provides minimum value. Eaton has also determined that, based on employee wages, the health coverage it offers should not be considered unaffordable to you. Health coverage offered by Eaton would be considered unaffordable to you if Eaton s lowest cost option for employee-only coverage is more than 9.5% of your household income for the year. This generally means that your household income would need to be less than $10,000 per year to qualify for a marketplace tax credit. Household income may be less than your employee wages depending on your personal situation (for example if you have income losses). IMPORTANT Information about using Marketplace and not using the Eaton health coverage offered by Eaton: If you purchase health insurance through the Marketplace instead of enrolling in health coverage offered by Eaton, you will NOT receive any contribution from Eaton towards this cost or any Eaton contribution to your health savings account. Your payments for coverage through the Marketplace are made on an after-tax basis, unlike contributions for health coverage provided by Eaton which offer you a tax savings because they are taken on a before-tax basis, If the Marketplace choice does not work out for you, you will NOT be able to re-enroll in the health coverage provided by Eaton until the next annual enrollment period, unless you have a qualifying change in family status. How Can I Get More Information? For more information about your health coverage sponsored by Eaton, please check your summary plan description (SPD), review materials in the Reference Library on Fidelity NetBenefits, or contact the Eaton Service Center at Fidelity at EATON01. Please visit HealthCare.gov for more information, including an online application for health insurance coverage and contact information for a Health Insurance Marketplace in your area. 1 A plan provides minimum value if the plan s share of the total allowed benefits costs covered by the plan is not less than 60 percent of such costs. August 2013 This information has been provided by, and is the responsibility of, Eaton. 3.EA-H-301B.100

3 Important Notice Group Health Continuation Coverage Under COBRA The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires Eaton to offer employees and their families the opportunity to temporarily continue their group health coverage under Eaton group health coverage (the Plan) in certain instances where coverage under the Plan would otherwise end. This notice contains important information about your right to COBRA continuation coverage. It generally explains COBRA continuation coverage, when it may become available to you and your family, and what you need to do to protect the right to receive it. When you become eligible for COBRA, you may also become eligible for other coverage options that may cost less than COBRA continuation coverage. This is only a summary of your COBRA continuation coverage rights. For additional information about your rights and obligations under the Plan and federal law, you should review the Plan s Summary Plan Description or contact the Plan Administrator. You may have other options available to you when you lose group health coverage. For example, you may be eligible to buy an individual plan through the Health Insurance Marketplace. By enrolling in coverage through the Marketplace, you may qualify for lower costs on your monthly premiums and lower out-of-pocket costs. Additionally, you may qualify for a 30-day special enrollment period for another group health plan for which you are eligible (such as a spouse s plan), even if that plan generally doesn t accept late enrollees. COBRA Qualifying Events If a qualifying event (as specified below) occurs, COBRA continuation coverage must be offered to each qualified beneficiary. You, your spouse and your dependent children, who are covered under the Plan on the day before the qualifying event could become qualified beneficiaries if coverage under the Plan is lost due to the qualifying event. Employee If you are an employee covered by the Plan, you will become a qualified beneficiary and have the right to elect COBRA continuation coverage if you lose your group health coverage due to any of the following qualifying events: Termination of your employment for any reason other than gross misconduct on your part. A reduction in your hours of employment. Spouse If you are the spouse of an employee and are covered by the Plan you will become a qualified beneficiary and have the right to elect COBRA continuation coverage for yourself if you lose your group health coverage due to any of the following qualifying events: The death of your spouse. The termination of your spouse s employment for any reason other than gross misconduct. A reduction in your spouse s hours of employment. Divorce or legal separation from your spouse. Your spouse becomes entitled to Medicare (Part A, Part B or both). Dependent If a dependent child is covered by the Plan, he or she will become a qualified beneficiary and have the right to elect COBRA continuation coverage if group health coverage under the Plan is lost due to any of the following qualifying events: The death of an Eaton parent-employee. The termination of an Eaton parent-employee s employment for any reason other than gross misconduct. Feb, 2015 Page 1 of 4 3.EA-H-420A.107

4 A reduction in a parent-employee s hours of employment with Eaton. Parent s divorce or legal separation. An Eaton parent-employee becomes entitled to Medicare (Part A, Part B or both). The dependent child ceases to be a dependent child under the terms of the Plan. A child born to, adopted by or placed for adoption with an Eaton parent-employee during the period of COBRA continuation coverage would also be a qualified beneficiary and has the right to COBRA continuation coverage. Retirees and spouses, surviving spouses and dependent children of retirees will become qualified beneficiaries and have the right to elect COBRA continuation coverage if their group health coverage is lost or substantially eliminated due to Eaton filing a proceeding in bankruptcy under Title 11 of the United States Code. Responsibilities Regarding COBRA Continuation Coverage To be entitled to COBRA continuation coverage, you, your spouse or your dependents must notify the Eaton Service Center at Fidelity within 60 days of the date on which any of the following qualifying events occur: Divorce. Legal separation. Child ceasing to be a dependent child under the terms of the Plan. To notify the Eaton Service Center at Fidelity, call EATON01 ( ) Monday through Friday (excluding New York Stock Exchange holidays) between 8:30 A.M. and midnight, Eastern time. Eaton must notify the Eaton Service Center at Fidelity of the following qualifying events: Reduction in hours of employment. Termination of employment. Death of the employee. Medicare entitlement (Part A, Part B or both). Commencement of a proceeding in bankruptcy with respect to the employer. Electing COBRA Continuation Coverage Once the Eaton Service Center at Fidelity is notified that a qualifying event has occurred, the Eaton Service Center at Fidelity will notify you of your right to elect COBRA continuation coverage. You have 60 days from the later of the date your coverage ends or the date that you are notified of your right to COBRA continuation coverage, to notify the Eaton Service Center at Fidelity that you want to elect COBRA continuation coverage. You do not have to show that you are insurable to elect COBRA continuation coverage. Each qualified beneficiary has an independent right to elect COBRA continuation coverage. Covered employees may elect COBRA continuation coverage on behalf of their spouses, and parents may elect COBRA continuation coverage on behalf of their children. If you elect COBRA continuation coverage, Eaton is required to allow you to purchase coverage that is identical to the coverage being provided under the Plan to similarly situated active employees or family members. If coverage under the Plan is modified for such similarly situated individuals, your coverage will also be modified. If you do not elect COBRA continuation coverage within the timeframe stated above, your Eaton group health coverage will end. Feb, 2015 Page 2 of 4 3.EA-H-420A.107

5 Length of the COBRA Continuation Period You, your covered spouse and any dependent children will be entitled to COBRA continuation coverage for up to a maximum of: 18 months when the qualifying event is termination of employment (other than for gross misconduct) or reduction in hours of employment; or 36 months when the qualifying event is the death of the employee, divorce or legal separation, the employee s entitlement to Medicare (Part A, Part B or both) or a dependent child ceasing to be a dependent under the Plan. If the employee becomes entitled to Medicare before the date of his/her qualifying event, the employee s spouse and any dependent children are entitled to elect COBRA continuation coverage for up to the greater of 36 months from the date of Medicare entitlement or 18 months from the date of the employee s qualifying event. Please note: Coverage under a health care reimbursement account may only be continued through the end of the plan year in which the qualifying event occurred. Second Qualifying Event Extension The 18-month COBRA continuation period may be extended to 36 months for your spouse and dependent children who are qualified beneficiaries if a second qualifying event (death, divorce, legal separation) or a dependent child ceasing to be a dependent under the terms of the Plan) occurs during the 18-month COBRA continuation period. However, this extension will only be allowed if the second event would have caused the spouse or dependent child to lose coverage under the Plan had the first qualifying event not occurred. To be granted an extension, the qualified beneficiary must notify the Eaton Service Center at Fidelity within 60 days of the second qualifying event. Disability Extension The 18-month COBRA continuation period may be extended to 29 months if a qualified beneficiary is determined by Social Security to be disabled at any time before the 60th day of the COBRA continuation period. This 11-month extension is available to all individuals who are qualified beneficiaries due to a termination or reduction in hours of employment. To be granted this extension, the qualified beneficiary must, within 60 days of the Social Security disability determination and before the end of the 18-month period: (1) notify the Eaton Service Center at Fidelity of such disability determination; and (2) provide a copy of the determination of disability notification from the Social Security Administration. The disabled individual must also notify the Eaton Service Center at Fidelity within 30 days of any final determination that such individual is no longer disabled. To notify the Eaton Service Center at Fidelity, call EATON01 ( ) toll-free, Monday through Friday (excluding New York Stock Exchange holidays) between 8:30 A.M. and midnight, Eastern time. Terminating Your COBRA Continuation Coverage The law provides that your COBRA continuation coverage may be terminated for any of the following reasons: 1. Eaton no longer provides group health coverage to any of its employees. 2. You do not pay the contribution for your COBRA continuation coverage on a timely basis, as required by the Plan. 3. After the date of your election, you become covered under another group health plan. 4. After the date of your election, you become entitled to Medicare (Part A, Part B or both). 5. You extend coverage for up to 29 months due to your disability and there has been a final determination that you are no longer disabled. Feb, 2015 Page 3 of 4 3.EA-H-420A.107

6 If your COBRA continuation coverage terminates for any reason, it cannot be reinstated. Cost of COBRA Continuation Coverage As allowed by federal law, you have to pay 102% of the applicable cost for your COBRA continuation coverage. This includes the full cost of coverage plus a 2% administration fee. However, the cost of the 11-month disability extension will be 150% of the applicable cost if the disabled qualified beneficiary is covered or 102% of the applicable cost if only non-disabled qualified beneficiaries are covered. At the end of the COBRA continuation period, you may be eligible to enroll in an individual conversion health plan subject to Eaton health plan rules. Address Changes To protect your family s rights, you should keep the appropriate parties informed of any changes in address, as follows: Employee address: If your address changes, you should notify Eaton. Dependent address: If your spouse or dependent(s) change address (to an address other than your address), contact the Eaton Service Center at Fidelity as shown below. You should also keep a copy for your records of any notices you send to the Eaton Service Center at Fidelity or to the Plan Administrator. Are there other coverage options besides COBRA Continuation Coverage? Yes. Instead of enrolling in COBRA continuation coverage, there may be other coverage options for you and your family through the Health Insurance Marketplace, Medicaid, or other group health plan coverage options (such as a spouse s plan) through what is called a special enrollment period. Some of these options may cost less than COBRA continuation coverage. You can learn more about many of these options at Contact Information If you have any questions about the Plan or your COBRA rights, please contact the Eaton Service Center at Fidelity at EATON01 ( ) Monday through Friday (excluding New York Stock Exchange holidays) between 8:30 A.M. and midnight, Eastern time or write to the address shown below. For more information about your rights under the Employee Retirement Income Security Act (ERISA), including COBRA, the Patient Protection and Affordable Care Act, and other laws affecting group health plans, contact the nearest Regional or District Office of the U.S. Department of Labor s Employee Benefits Security Administration (EBSA) in your area or visit (Addresses and phone numbers of Regional and District EBSA offices are available through EBSA s Web site.) For more information about the Marketplace, visit Eaton Service Center at Fidelity P.O. Box Cincinnati, OH Feb, 2015 Page 4 of 4 3.EA-H-420A.107

7 New 2015 IRS Form Reporting Your Medical Coverage As required by law for the year of 2015, Eaton will be providing to all employees an IRS Form 1095-C. This form documents which months in 2015 employees and their family members (if applicable) participated in the Eaton medical plan. This information may need to be included with the filing of employees 2015 federal tax returns. Employees will have the option of receiving the form by mail or by printing it from a web site. The form will be mailed or available online no later than January 31, Further information will be provided at a later date, including how to register for access to the form online. Important Notice About Your Eaton Prescription Drug Coverage and Medicare This notice is required by law and is intended for the limited number of currently active Eaton employees who may be Medicare-eligible, or who have a Medicare-eligible dependent. Please read this notice carefully and keep it where you can find it. This notice has information about your current prescription drug coverage with Eaton and prescription drug coverage available for people with Medicare. It also explains the options you have under Medicare prescription drug coverage and can help you decide whether or not you want to enroll. At the end of this notice is information about where you can get help to make decisions about your prescription drug coverage. 1. Medicare prescription drug coverage became available in 2006 to everyone with Medicare through Medicare prescription drug plans and Medicare Advantage Plans that offer prescription drug coverage. All Medicare prescription drug plans provide at least a standard level of coverage set by Medicare. Some plans may also offer more coverage for a higher monthly premium. 2. Eaton has determined that the prescription drug coverage offered by the EATON CORPORATION MEDICAL PLAN FOR U.S. EMPLOYEES and the EATON CORPORATION HMO PLAN FOR U.S. EMPLOYEES is, on average for all plan participants, expected to pay out as much as the standard Medicare prescription drug coverage will pay and is considered Creditable Coverage. Keep this notice in a safe place. If you enroll in one of the plans approved by Medicare which offer prescription drug coverage, you may need to give a copy of this notice when you join to show that you are not required to pay a higher premium amount. Because your existing coverage is on average at least as good as standard Medicare prescription drug coverage, you can keep Eaton prescription drug coverage and not pay an additional Medicare premium if you later decide to enroll in Medicare prescription drug coverage. Individuals can enroll in a Medicare prescription drug plan when they first become eligible for Medicare and each year from October 15 th through December 7 th. Currently active employees may also enroll when they stop working if they are then eligible for Medicare. If you leave your Eaton plan coverage, you may be eligible for a Special Enrollment period to sign up for a Medicare prescription drug plan. The following three points apply to active Eaton employees who are Medicare-eligible, or who have a Medicare-eligible dependent: 1. If you, or a dependent covered by the Eaton Corporation Medical Plan for U.S. Employees, decide to enroll in a Medicare prescription drug plan, Medicare will usually be the secondary payer for prescription drug costs. In other words, eligible prescription claims will be paid by the Eaton plan first. If there are prescription 9/3/15 3.EA-H-422ON.108

8 drug claims that are not covered or partially covered by the Eaton plan, Medicare may pay for eligible expenses that are not paid by the Eaton plan. 2. You should compare your current prescription drug coverage (including which drugs are covered) and costs in the Eaton plan to the plans offering Medicare prescription drug coverage in your area. By comparing the coverage and costs of the plans, you can determine if adding the Medicare prescription coverage will be beneficial to you. 3. Since you now have prescription drug coverage that, on average, is as good as Medicare coverage, you can choose to join a Medicare prescription drug plan later. You will not have to pay the higher premium (described below) as long as you do not go 63 days or longer without prescription coverage that is as good as Medicare. IMPORTANT: You should also know that if you drop or lose your coverage with Eaton and don t enroll in Medicare prescription drug coverage after your current coverage ends, you may pay more to enroll in Medicare prescription drug coverage later. If you go 63 days or longer without prescription drug coverage that s at least as good as Medicare s prescription drug coverage, your monthly premium will go up at least 1% of the national benchmark beneficiary premium per month for every month after your initial enrollment period that you did not have that coverage. For example, if you go nineteen months without coverage, your premium will always be at least 19% higher than what most other people pay. You ll have to pay this higher premium as long as you have Medicare prescription drug coverage. In addition, you may have to wait until the next election period to enroll. For more information about this notice or your current prescription drug coverage Please call the Eaton Service Center at Fidelity at EATON01 ( ), Monday through Friday (excluding New York Stock Exchange holidays) between 8:30 A.M. and midnight, Eastern Time and speak to a service representative. Note: You will receive this notice annually and at other times in the future such as before the next period you can enroll in Medicare prescription drug coverage, and if this Eaton coverage changes. You also may request a copy. For more information about your options under Medicare prescription drug coverage More detailed information about Medicare plans that offer prescription drug coverage is in the Medicare & You handbook. You ll get a copy of the handbook in the mail from Medicare. You may also be contacted directly by Medicare prescription drug plans. You can also get more information about Medicare prescription drug plans from the following: Visit for personalized help Call your State Health Insurance Assistance Program (see your copy of the Medicare & You handbook for their telephone number) Call MEDICARE ( ). TTY users should call For people with limited income and resources, extra help paying for a Medicare prescription drug plan is available. Information about this extra help is available from the Social Security Administration (SSA). For more information about this extra help, visit SSA online at or call them at (TTY ). Date: 10/01/2015 Sender: Eaton Corporation Contact Office: Eaton Service Center at Fidelity, Address: P.O. Box , Cincinnati, OH Phone Number: EATON01 ( ) Other Medical Plan Information Effective January 1, 2016, the Eaton Medical Plan will no longer exclude charges for or related to gender reassignment surgery. Please note that cosmetic surgery (including cosmetic surgery related to gender reassignment) will remain excluded from coverage. 9/3/15 3.EA-H-422ON EA-H-301M.102