COBRA


health

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires that most employers sponsoring group health plans offer employees and their eligible dependents the opportunity to temporarily extend their group health coverage in certain instances where coverage under the plan would otherwise end. For State Health Benefits Program (SHBP) participants, COBRA is not a separate health program; it is a continuation of SHBP coverages under the provisions of the federal law.

Employees enrolled in SHBP may continue coverage under COBRA if coverage ends because of:

  • Reduction in working hours;
  • Leave of absence; or
  • Termination of employment for reasons other
     than gross misconduct.

Spouses of employees enrolled in SHBP may continue coverage under COBRA if coverage ends because of:

  • Death of the employee;
  • End of the employee's coverage due to a reduction in working hours, leave of absence, or termination of employment for reasons other than gross misconduct;
  • Divorce or legal separation of the employee and spouse; or
  • Election of Medicare as the employee's primary insurance carrier (requires dropping the
    group coverage carried as an active employee).

Dependent children of employees in SHBP may continue coverage under COBRA if coverage ends
because of:

  • Loss of dependent child's eligibility through independence, the attainment of age 23, or
    marriage;
  • Death of the employee;
  • End of the employee's coverage due to a reduction in working hours, leave of absence,
    or termination of employment for reasons other than gross misconduct; or
  • Election of Medicare as the employee's primary insurance carrier (requires dropping the group coverage carried as an active employee).
The length of your COBRA coverage continuation depends on the nature of the COBRA qualifying event that entitled you to the coverage.
  • For loss of coverage due to termination of employment, reduction of hours, or leave of absence, the employee and/or dependents are entitled to 18 months of COBRA coverage. Time on leave of absence just before enrollment in COBRA, unless under the federal and/or State Family Leave Act, counts toward the 18-month period and will be subtracted from the 18 months. Time a member spends on federal or State leave will not count as part of the COBRA eligibility period.
  • If you receive a Social Security Administration disability determination for an illness or injury you had when you enrolled in COBRA or incurred within 60 days of enrollment, you and your covered dependents are entitled to an extra 11 months of coverage up to a maximum of 29 months of COBRA coverage. You must provide proof of the disability determination from the Social Security Administration before the end of your normal 18-month COBRA term to qualify for the extension.
  • For loss of coverage due to the death of the employee, divorce or legal separation, dependent ineligibility, or Medicare entitlement, thecontinuation term for dependents is 36 months.

The cost of your coverage under COBRA will amount to the full group rate plus a 2 percent administration fee. The state will bill you on a monthly basis. Please contact Human Resources for actual costs.

  • The employer is responsible for notifying all newly hired employees and their dependents of the COBRA provisions by mailing a notification letter to their home.
  • The employee is responsible for notifying the employer within 60 days of a COBRA qualifying event such as divorce, legal separation, or a child losing dependent status. If the employee does not inform the employer of the change in dependent status within the 60 days, the employee may forfeit the dependent's right to COBRA.
  • The employer has the responsibility to notify the employee, the spouse and/or dependents of their rights to purchase continued health coverage within 14 days of receiving notice that there has been a COBRA qualifying event. An application form with instructions and a rate chart should be sent with the COBRA notice. The notice gives the date coverage will end and the period of time over which coverage may be extended.
  • The employee and/or the dependent seeking coverage is responsible for submitting a properly completed New Jersey State Health Benefits COBRA application to the Health Benefits Bureau in the Division of Pensions and Benefits. This application must be filed within 60 days of the loss of coverage or of the date of employer notification, whichever is later. Failure to submit the application within the time frame allowed by law is considered a decision not to enroll.
  • You may elect to enroll in any or all of the coverages you had as an active employee or dependent (health, prescription, dental, and vision). You may change your health or dental plan when you enroll in COBRA. You may also elect to cover the same family members you had as an active employee, or you can reduce those covered.
  • Fact Sheet #30 - Continuation of Health Benefits Under COBRA

You should be aware of the following information after you have enrolled in the State Health Benefits Program (SHBP) under COBRA:

  • Bills will be sent from the Division of Pensions and Benefits SHBP. Any billing questions must be referred to the:

COBRA Administrator
Division of Pensions and Benefits
Health Benefits Bureau
PO Box 299
Trenton, NJ 08625-0299

or you may call Client Services at (609) 292-7524.

  • You will be billed monthly. Accounts delinquent over 45 days will be closed and insurance coverage terminated. You will receive no notice of delinquency or termination. If you do not receive a monthly bill or misplace it, contact Client Services. It is your responsibility to make payment on a timely basis.
  • Once you are enrolled in COBRA, claims are handled just like active employee claims (i.e. using the same claim forms and procedures). However, you must indicate your status as a COBRA participant on all claim forms to prevent claim problems. Questions about claims should be directed to the insurance carriers. The single exception is that vision plan claims are sent directly to the COBRA Administrator at the address shown above.

Need Assistance?

We stand at the ready to assist you with all of your benefits and HR needs and questions.

  • Click here to view the full list of HR staff including notes on who can help you with what  
  • Or, call us at 609-652-4384
  • Or stop by our suite in J-115

We look forward to getting you what you need, answering your questions, and/or connecting you with the HR/Payroll team member that can best help you.