********IMPORTANT NOTICE********

Transcription

1 ********IMPRTANT NTICE******** Subscriber (and/or Spouse) Name Address 1 Address 2 City, State, Zip Date of Notice: Benefits Termination Date: Election Rights Expire on: Subscriber or Member ID Number: Group Number: Group Name: Dear Subscriber (and/or Spouse) Name and any covered dependent children: This notice contains important information about your right to continue health coverage under the group health plan(s) provided by the group identified above (the Plan ). Your continuation coverage rights are limited to the coverage options that you were enrolled in when the qualifying event occurred. Please read this notice very carefully. The term you is used in these election materials to refer to each person who is eligible to elect CBRA continuation coverage. Blue Cross and Blue Shield of North Carolina (BCBSNC) has been retained by the above named employer to notify you of your group health care benefits continuation rights and to handle other aspects of CBRA administration. These rights are fully explained in the enclosed Election Form and the Additional Information sheet. We received notification that your coverage under the Plan ended on due to (a qualifying event ). Under a law known as CBRA, you may elect to continue health coverage for a temporary period of time. If you elect to continue coverage timely, and if you meet all other requirements explained on the enclosed information sheet, including the timely payment of all required premiums, your continuation coverage will begin on. This coverage may be continued on a direct-pay basis for up to months. (In certain circumstances discussed in the attached notice, coverage may be continued for longer than this.) You will be responsible for paying applicable fees directly to BCBSNC. You have up to 60 days from the date of this notice or from the date coverage is lost on account of your qualifying event, whichever is later, to elect CBRA coverage.

2 If you wish to elect coverage, please complete and return the enclosed CBRA Continuation Coverage Election Form. It must be postmarked by. If you elect CBRA, your first payment is due 45 days from the date of your election. Your CBRA election is not complete and you will not have coverage until BCBSNC receives both your election form and the first payment in full. If you have any questions about this notice or your rights to CBRA continuation coverage, you should contact our CBRA Continuation Unit at , Monday through Friday, from 8 a.m. to 5 p.m. Sincerely, Regina Willard Manager, Membership perations Enclosure

3 Subscriber ID Number: ****CBRA CNTINUATIN CVERAGE ELECTIN FRM**** INSTRUCTINS: To elect CBRA continuation coverage, you must complete this Election Form and return it to: BCBSNC, P Box 2291, Durham, NC 27702, Attention: CBRA Continuation Unit. A return envelope is enclosed for your convenience. Under Federal law, you have 60 days from the date of this notice or the date your coverage is lost, whichever is later, to decide whether you want to elect CBRA continuation coverage under the Plan. This Election Form must be completed and postmarked no later than _. If you do not mail a completed Election Form by this due date, you will lose your right to elect CBRA continuation coverage. If you reject CBRA continuation coverage, you may change your mind before the election period ends, but your CBRA continuation coverage will not begin until you return the completed Election Form. Read the important information about your rights on the enclosed Additional Information sheet. At the time of the qualifying event, you had a coverage type of and the current monthly premium amount is $. Dependents, if any, covered under your coverage type are listed below. I (We) elect CBRA continuation coverage by checking the applicable block next to the member s name: CBRA Yes Name Date of Birth Relationship to Employee SSN or other identifier

4 You may elect to continue coverage under any or all of the coverage options that you participated in at the time of your qualifying event. For example, if you participated in the medical coverage option and dental coverage option, you may elect medical only, dental only or both medical and dental coverage. If you need additional rate information, contact the CBRA Continuation Unit at , Monday through Friday, from 8 a.m. to 5 p.m. Each qualified beneficiary has a separate right to elect continuation coverage. The attached notice provides additional information about who can elect CBRA coverage for a qualified beneficiary. If you are the covered employee and you elect to continue your coverage under the Plan through CBRA, coverage will also be available for your dependent children who are born to or placed for adoption with you during your period of continuation coverage, but they must be timely enrolled as required by the Plan. Additional information is provided in the attached notices. You do not have to send any payment with the Election Form; however, you must make your first payment for continuation coverage no later than 45 day after the date of your election. (This is the date the Election Notice is post-marked.) The initial payment must cover the cost of CBRA continuation coverage for the period beginning on the date coverage under the Plan was lost through the end of the month prior to the month in which the first payment is due. If you have any questions regarding how much you must pay, you should contact the CBRA Continuation Unit at Your CBRA continuation coverage will not be reinstated until your first payment is made. This means that any claim you submit for benefits while your coverage is still inactive may be denied and may have to be resubmitted once your coverage is reinstated. You will not be considered to have made any payment if your check is returned for insufficient funds. Signature: Date: Print Name and Address: Relationship to Employee: Please indicate the amount of premium submitted with this Election Form: $ MAKE CHECKS PAYABLE T: BCBSNC CBRA Services

5 ADDITINAL INFRMATIN ABUT YUR CBRA CNTINUATIN CVERAGE RIGHTS WHAT IS CNTINUATIN CVERAGE? Federal law requires that most group health plans (including this Plan) give employees and their families the opportunity to continue their health care coverage when there is a qualifying event that would result in a loss of coverage under an employer s plan. Depending on the type of qualifying event, qualified beneficiaries can include the employee (or retired employee) covered under the group health plan, the covered employee s spouse and the dependent children of the covered employee. Continuation coverage is the same coverage that the Plan gives to other participants or beneficiaries under the Plan who are not receiving continuation coverage. Each qualified beneficiary who elects continuation coverage will have the same rights under the Plan as other participants or beneficiaries covered under the Plan. The employer has hired Blue Cross and Blue Shield of North Carolina (BCBSNC0 to act as the CBRA Administrator for the Plan coverage options described in the Election Form provided with this notice. This means that BCBSNC will receive CBRA election forms, certain required CBRA notices and continuation payments. The contact information for BCBSNC is: CBRA Continuation Unit BCBSNC P Box 2291 Durham, North Carolina HW LNG WILL CNTINUATIN CVERAGE LAST? In the case of a loss of coverage due to the end of employment or reduction in hours of employment, coverage generally may be continued only for up to a total of 18 months. In the case of a loss of coverage due to an employee s death, divorce or legal separation, the employee s becoming entitled to Medicare benefits or a dependent child ceasing to be a dependent under the terms of the Plan, coverage may be continued for up to a total of 36 months. When the qualifying event is the end of employment or reduction of the employee s hours of employment, and the employee became entitled to Medicare benefits less than 18 months before the qualifying event, CBRA continuation coverage for qualified beneficiaries other than the employee can last for up to 36 months after the date of Medicare entitlement. This notice shows the maximum period of continuation coverage available to the qualified beneficiaries. Continuation coverage will be terminated before the end of the maximum period if: (1) any required premium is not paid in full on time; (2) a qualified beneficiary becomes covered, after electing continuation coverage, under another group health plan that does not impose any pre-existing condition exclusion for a pre-existing condition of the qualified beneficiary; (3) a qualified beneficiary becomes entitled to Medicare benefits (under Part A, Part B or both) after electing continuation coverage; (4) the maximum CBRA coverage period has been extended due to the disability of a qualified beneficiary, and the Social Security Administration issues a final determination that the qualified beneficiary is no longer disabled; or (5) The employer ceases to provide any group health plan for its employees. Continuation coverage may also be terminated for any reason the Plan would terminate coverage of any participant or beneficiary not receiving continuation coverage (such as fraud). If, during the period of CBRA coverage, a qualified beneficiary becomes covered, after electing CBRA, under another group health plan, you or the qualified beneficiary (or a representative) must notify the CBRA Administrator in writing within 30 days of the later of (1) the date the other coverage becomes effective, or (2) exhaustion or satisfaction of any preexisting condition exclusions affecting the qualified beneficiary. If, during the period of CBRA coverage, a qualified beneficiary becomes entitled, after electing CBRA, to Medicare Part A, Part B, or both, you or the qualified beneficiary (or a representative of either) must

6 notify the CBRA Administrator in writing within 30 days after the beginning of Medicare entitlement (as shown on the Medicare card). The procedure for providing this notice is described below. If notice of these events is not timely and properly provided, the qualified beneficiary s CBRA coverage may be terminated retroactively and the qualified beneficiary may be required to repay a portion of the benefits received. HW CAN YU EXTEND THE LENGTH F CBRA CNTINUATIN CVERAGE? If you elect continuation coverage and your initial qualifying event is the covered employee s termination or reduction in hours of employment, an extension of the maximum period of coverage may be available if a qualified beneficiary is disabled or a second qualifying event occurs. You must notify the CBRA Administrator (using the address listed above) of a disability or second qualifying event in order to extend the period of continuation coverage. Failure to provide notice of a disability or second qualifying event means you will not have the right to extend the period of continuation coverage. Disability: An 11-month extension of coverage may be available if any of the qualified beneficiaries is determined by the Social Security Administration (SSA) to be disabled. In order for the Social Security Disability Extension (SSDE) to apply, the SSA must determine that the disability started before the 61 st day of CBRA continuation coverage. All of the qualified beneficiaries listed on the Election Form who have elected continuation coverage will be entitled to the 11-month extension if one of them qualifies. In order to qualify for the extension, you or the disabled qualified beneficiary must notify the CBRA Administrator in writing of the SSA s determination before the end of the 18-month period of CBRA continuation coverage and within 60 days after the later of (1) the date the qualified beneficiary is determined to be disabled by the SSA; (2) the date the covered employee terminated or reduced his or her hours of employment; and (3) the date coverage would be lost as a result of the termination or reduction in hours of employment. The procedure for providing this notice is described below. Failure to provide notice in a timely and proper manner will eliminate your right to extend the period of CBRA coverage. If the qualified beneficiary is determined by SSA to no longer be disabled, you must notify the CBRA Administrator of that fact within 30 days of SSA's determination. If the qualified beneficiary is no longer considered disabled, any CBRA coverage extended beyond the 18-month limit that would otherwise apply will be terminated for the qualified beneficiary and all related qualified beneficiaries. The procedure for providing this notice is described below. Second Qualifying Event: If a qualified beneficiary (spouse or dependent children only) experiences another qualifying event while receiving 18 months (or 29 months in the case of a disability extension) of CBRA continuation coverage, he or she can get up to 36months of CBRA coverage. Such second qualifying events may include the death of a covered employee, divorce or legal separation from the covered employee, the covered employee s becoming entitled to Medicare benefits (under Part A, Part B or both), or a dependent child s ceasing to be eligible for coverage as a dependent under the Plan. These events can be a second qualifying event only if they would have caused the qualified beneficiary to lose coverage under the Plan if the first qualifying event had not occurred. For example, because legal separation does not cause a loss of coverage under the Plan, it will not qualify as a second qualifying event. In no event may a qualifying event give rise to a maximum coverage period that ends more than 36 months after the date of the first qualifying event. For cases of second qualifying events, the qualified beneficiary must notify the CBRA Administrator in writing within 60 days of the date of the second qualifying event. The procedures for providing this notice are described below. Failure to provide notice in a timely and proper manner will eliminate your right to extend the period of CBRA coverage. What Notice Procedures Must Be Followed? As a condition of receiving CBRA continuation coverage, you or another qualified beneficiary (or a representative) must notify the Plan when certain CBRA-related events occur. These events include (1) second qualifying events, (2) a qualified beneficiary s determination of disability or cessation of disability, (3) enrollment in another group health plan while receiving CBRA coverage under the Plan (provided the other plan does not have an applicable pre-existing condition limitation), and (4) Medicare entitlement while receiving CBRA coverage under the Plan. Each of these events, including the time period for providing notice of the event, has been discussed previously. Written notice must be provided to the CBRA Administrator at the address listed above and must be postmarked no later than the deadline described above. (Electronic or oral notification will not be accepted.)

7 The notice must provide the name, address and phone number of the covered employee (or formerly covered employee) and/or each qualified beneficiary experiencing the CBRA-related event, the name of the Plan, the CBRA-related event being reported and the date of such event. You must also provide evidence that the CBRA-related event has occurred. Acceptable evidence is your signed certification that the event has occurred, except in the case of a Social Security disability determination. For a Social Security disability determination, you must provide a copy of your Social Security Disability Award letter, or if you are no longer disabled, you must provide a copy of the Social Security s determination that you are no longer disabled. In certain situations, additional documentation or information regarding the CBRA-related event may be requested. nce you receive a request, you must timely provide the additional documentation or information. If notice is not provided by the deadline described above or you do not timely provide the additional requested documentation or information, your notice will be rejected and CBRA continuation coverage will not be offered. HW CAN YU ELECT CBRA CNTINUATIN CVERAGE? To elect continuation coverage, you must complete the enclosed Election Form and return it to the CBRA Administrator according to the directions on the Election Form. You must elect coverage no later than the date indicated in the Election Form. Proof of timely election is your responsibility. Verbal elections will not be accepted. Each qualified beneficiary has a separate right to elect continuation coverage. For example, the employee s eligible spouse may elect continuation coverage even if the employee does not. Continuation coverage may be elected for only one, several or for all dependent children who are qualified beneficiaries. A parent may elect to continue coverage on behalf of any dependent children. The employee or the employee s eligible spouse can elect continuation coverage on behalf of all of the qualified beneficiaries. A qualified beneficiary must elect continuation coverage by the date specified on the Election Form. Failure to do so will result in a loss of the right to elect continuation coverage under the Plan. In considering whether to elect continuation coverage, you should take into account that a failure to continue your group health coverage will affect your future rights under federal law. First, you can lose the right to avoid having pre-existing condition exclusions applied to you by other group health plans if you have more than a 63-day gap in health coverage, and election of continuation coverage may help you not have such a gap. Second, you will lose the guaranteed right to purchase individual health insurance policies that do not impose such pre-existing condition exclusions if you do not get continuation coverage for the maximum time available to you. Finally, you should take into account that you have special enrollment rights under federal law. You have the right to request special enrollment in another group health plan for which you are otherwise eligible (such as a plan sponsored by your spouse s employer) within 30 days after your group health coverage ends because of the qualifying event listed above. You will also have the same special enrollment right at the end of continuation coverage if you get continuation coverage for the maximum time available to you. For employees eligible for Trade Adjustment Assistance: Under a federal law called the Trade Act of 1974, you may qualify for special CBRA rights if you become eligible for trade adjustment assistance. Generally, you will be entitled to a second opportunity to elect CBRA coverage for yourself and certain family members (if you did not already elect CBRA coverage), but only within a limited period of 60 days (or less) and only during the six months immediately after your initial loss of coverage. In addition, the Trade Act of 2002 created a new tax credit for certain individuals who become eligible for trade adjustment assistance and for certain retired employees who are receiving pension payments from the Pension Benefit Guaranty Corporation (PBGC) (eligible individuals). Under the new tax provisions, eligible individuals can either take a tax credit or get advance payment of a certain percentage of premiums for qualified health insurance (currently 72.5%, but this amount may change in the future), including continuation coverage. There is also a temporary extension of the maximum period of CBRA continuation coverage for PBGC receipts (covered employees who have a non-forfeitable right to a benefit any portion of which is to be paid by the PBGC) and TAA-eligible individuals. In the highly unlikely event that you do qualify or will qualify for trade adjustment assistance, you must notify the CBRA Administrator. If you have questions about these new tax provisions, you may call the Health Care Tax Credit Customer Contact Center toll-free at More information about the Trade Act is also available at HW MUCH DES CBRA CNTINUATIN CVERAGE CST? Generally, each qualified beneficiary is required to pay the entire cost of continuation coverage. The amount a qualified beneficiary may be required to pay may not exceed 102 percent of the cost to the group health plan (including both employer and employee contributions) for coverage of a similarly situated plan participant or beneficiary who is not receiving continuation coverage. The required monthly payment for each coverage option is described earlier in this notice.

8 WHEN AND HW MUST PAYMENT FR CBRA CNTINUATIN CVERAGE BE MADE? First payment for continuation coverage: If you elect continuation coverage, you do not have to send any payment with the Election Form. However, you must make your first payment for continuation coverage not later than 45 days after the date of your election. (This is the date the Election Notice is post-marked.) Your first payment must cover the cost of CBRA continuation coverage for the period beginning on the date coverage under the Plan was lost through the end of the month prior to the month in which the first payment is due. If you do not make your first payment for continuation coverage in full not later than 45 days after the date of your election, you will lose all continuation coverage rights under the Plan. You are responsible for making sure that the amount of your first payment is correct. You may contact the CBRA Continuation Unit at to confirm the correct amount of your first payment. Monthly payments for continuation coverage: After you make your first payment for continuation coverage, you will be required to pay for continuation coverage for each subsequent month of coverage. The amount due for each month of coverage is shown on the CBRA Election Form. Monthly payments are due on the 1 st of each month unless you are notified otherwise. If you make a monthly payment on or before the first day of the coverage period to which it applies, your coverage under the Plan will continue for that coverage period without any break. You will be sent periodic reminder notices of payments due before the premium due date. Remember, however, you are responsible for paying the full premium on time even if you don t get a notice. Grace periods for monthly payments: Although monthly payments are due on the first day of each month, you will be given a grace period of 30 days after the first day of the month to make each monthly payment. This grace period does not apply for purposes of your first payment. If you pay a monthly payment later than the first day of the month, but before the end of the grace period for the coverage period, your coverage under the Plan will be suspended as of the first day of the month, and then retroactively reinstated (going back to the first day of the month) when the monthly payment is received. This means that any claim you submit for benefits while your coverage is suspended may be denied and may have to be resubmitted once your coverage is reinstated. If you fail to make a monthly payment before the end of the grace period for that month, you will lose all rights to continuation coverage under the Plan. FR MRE INFRMATIN For more information about your rights under ERISA, including CBRA, the Health Insurance Portability and Accountability Act (HIPAA) and other laws affecting group health plans, contact the U.S. Department of Labor s Employee Benefits Security Administration (EBSA) in your area or visit the EBSA website at REMEMBER T KEEP US INFRMED F ANY CHANGES IN YUR ADDRESS AND THE ADDRESSES F FAMILY MEMBERS. Failure to do so may result in delayed notification and loss of continuation coverage. You should also keep a copy, for your records, of any notices you send to the Plan Administrator or CBRA Administrator.