07-D TML Health Reimbursement Acct

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6.7 Continuation of Coverage (COC) a. Introduction The right to Continuation of Coverage was created by a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Continuation of Coverage can become available' to Participants and their Dependents when they would otherwise lose group health coverage. For additional information about rights and obligations for Continuation of Coverage under the HRA .plan and under federal law, Participants should review the Plan or contact TML Intergovernmental Employee Benefits Pool, 1821 Rutherford Lane, Suite 300, Austin, Texas 78754, (512) 719-6500. b. What Is Continuation of Coverage? Continuation of Coverage is a continuation of Plan coverage when coverage would otherwise end because of a life event known as a "qualifying event." Specific qualifying events are listed later in this section. After a qualifying event, Continuation of Coverage must be offered to each person who is a "qualified beneficiary." Participants, their Spouses and their Dependent children could become qualified beneficiaries if coverage under the Plan is lost because of the qualifying event. Under the Plan, qualified beneficiaries who elect Continuation of Coverage may be required to pay the full cost of coverage plus an additional 2%, depending on the policy of the Employer. A Participant will become a qualified beneficiary if he or she loses coverage under the Plan because either one of the following qualifying events happens: 1. The Participant's hours of employment with the Employer are reduced; or 2. The Participant's employment with the Employer ends for any reason other than the Participant's gross misconduct. The Spouse of the Participant will become a qualified beneficiary if he or she loses coverage under the HRA Plan because any of the following qualifying events happens: 1. The Participant dies; 2. The Spouse's hours of employment are reduced; 3. The Spouse's employment ends for any reason other than his or her gross misconduct; 4. The Spouse becomes entitled to Medicare benefits (under Part A, Part B or both); or 5. The Spouse divorces 'or legally separates from the Participant. Dependent children will become qualified beneficiaries if they lose coverage under the HRA Plan because any of the following qualifying events happens: 1. The Participant dies; 2. The Participant's hours of employment with the Employer are reduced; 3. The Participant's employment with the Employer ends for any reason other than the Participant's gross misconduct; 4. The Participant becomes entitled to Medicare benefits (Part A, Part B or both); 5. The Participant and his or her Spouse divorce or legally separate; or 6. The child no longer meets the definition of Dependent under this plan. Sometimes, filing a proceeding in bankruptcy under Title II of the United States Code can be a qualifying event. If a proceeding in bankruptcy is filed with respect to the Employer and the bankruptcy results in the loss of coverage for any Retiree covered under the Plan, the Retiree will become a qualified beneficiary with respect to the bankruptcy. The Retiree's Spouse, surviving Spouse and Dependent children will also become qualified beneficiaries if bankruptcy results in their losing coverage under the Plan. c. When Is Continuation of Coverage Available? . The Plan will offer Continuation of Coverage to qualified beneficiaries only after the Administrator has been notified that a qualifying event has occurred. When the qualifying event is the end of employment or reduction of hours of employment, death of the Participant, commencement of a proceeding in bankruptcy with respect to the Employer or the Participant's becoming entitled to Medicare benefits (under Part A, Part B or both), the Employer must notify TML Intergovernmental Employee Benefits Pool of the qualifying event. Page 7