8.3 COBRA/HIPAA

The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives all eligible employees and their qualified beneficiaries the opportunity to continue health insurance coverage under FNU’s health plan when a "qualifying event" would normally result in the loss of coverage. Some common qualifying events are: resignation of covered employee; termination of covered employee for reasons other than gross misconduct, or death of a covered employee; a reduction in a covered employee's hours or a leave of absence; divorce/legal separation of covered employee; covered employee becomes eligible for benefits under Medicare and loses coverage under a retiree plan; and a dependent child ceases to be covered as “dependent” under the terms of the group health plan (for example, maximum age or marriage). Under COBRA, the employee or beneficiary pays the full cost of coverage at the employer’s group rates plus an administration fee.

An employee, spouse, and dependent children are generally entitled to 18 months of continuous coverage if the qualifying event is due to a separation of employment or a reduction of hours. Other qualifying events may entitle the insured to 36 months of continuous coverage.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) puts limits on pre-existing condition exclusions in group health plans and gives new enrollees credit for prior coverage.

Please contact the Human Resources Department with any questions regarding COBRA or HIPAA.