Costs & Payment for COBRA
How much does COBRA continuation coverage cost?
Each qualified beneficiary must pay the entire cost of continuation coverage.¬† The amount a qualified beneficiary must pay may not exceed 102 percent (or, in the case of an extension of continuation coverage due to disability, 150 percent) of the cost to the Plan (including both employer and employee contributions) for coverage of a similarly situated plan participant or beneficiary who is not receiving continuation coverage.
When and how must payment for COBRA continuation coverage 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, if mailed.)¬† 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 party responsible for COBRA administration under the Plan at the address, phone number or e-mail address provided at the end of this section to confirm the correct amount of your first payment.
Periodic payments for continuation coverage
After you make your first payment for continuation coverage, you will be required to make periodic payments for each subsequent coverage period.¬† The amount due for each coverage period for each qualified beneficiary is shown in this notice.¬† The periodic payments can be made on a monthly basis.¬† Under the Plan, each of these periodic payments for continuation coverage is due on the first day of the month for that coverage period.¬† If you make a periodic 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.
Grace period for periodic payments
Although periodic payments are due on the dates shown above, you will be given a grace period of 30 days after the first day of the coverage period to make each periodic payment.¬† Your continuation coverage will be provided for each coverage period as long as payment for that coverage period is made before the end of the grace period for that payment.¬† However, if you pay a periodic payment later than the first day of the coverage period to which it applies, 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 coverage period and then retroactively reinstated (going back to the first day of the coverage period) when the periodic 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.
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