Welfare Notes - December 2005

December, 2005

The COBRA law (Consolidated Omnibus Budget Reconciliation Act of 1985) was put into effect to allow employees and/or dependents to continue their group health coverage through self-payments after their group eligibility has been terminated.  Many participants are surprised at the cost of continuing coverage through self-payments.  COBRA rates by law are the amount paid by the group for your coverage plus a 2% administrative fee.

COBRA letters are sent to participants who have lost their active coverage due to insufficient work time and participants who have dependent children turning 19 years old.  Nineteen-year-old dependent children are no longer eligible dependents even if they are full time students.  The coverage for 19-year-old dependent children terminates in the month following their nineteenth birthday.  The COBRA letter contains information about the participant’s rights and the cost of continuing coverage.

SUP participants may find it advantageous to inquire about less expensive individual plans or school plans for their overage dependents.  Since active coverage terminates upon retirement, active participants who are considering retirement should also look for options that are available.

When researching individual plans you should compare deductibles, non-covered expenses, and limitations to your current plan coverage to see how you will be affected. 

Please be sure to keep the SUP Welfare Plan and the Union informed of your current address information. This will help insure that you get all of the mailings.