Participant Rights and Responsibilities Upon Transfer or Termination
Medical and Dental Plans
Indiana University sponsors a choice of comprehensive medical care plans for eligible employees. Benefits under these plans include medical, prescription drug, mental health/substance abuse, transplant coverage, and in the case of the High Deductible Health Plan (HDHP), a health savings account. The university also sponsors a dental plan.
All full-time Academic and Staff employees are eligible to participate in IU-sponsored health care plans. Spouses/domestic partners and children who meet the definition of eligible dependents may also be covered by health plans.
Participation by the employee in an IU-sponsored health care plan ends on the date that the employee:
- terminates from the university; or
- ceases to be a member of the eligible class for coverage; or
- fails to make required contributions if prior to the date of termination.
A dependent's coverage will terminate on the date of the earliest of the following occurrences:
- the covered dependent ceases to meet the definition of dependent,
- the employee’s coverage terminates,
- all dependent coverage is discontinued under the plan,
- the employee ceases to be in the eligible class,
- a dependent becomes eligible for employee coverage, or
- the employee fails to make required contributions if prior to the date of termination.
Under federal law, employees have the right to continue health care coverage under COBRA, and in the case of termination for reason of military service, under the Uniformed Services Employment and Reemployment Rights Act (USERRA).
In addition to COBRA or USERRA continuation coverage described below, employees with IU Retiree Status have additional options for health care coverage upon termination from the university. Those options are described in Section VIII.
COBRA Continuation Coverage. Employees and their covered dependents have the opportunity for a temporary extension of health coverage (called COBRA continuation coverage) at group rates in instances where coverage under the plan would otherwise end. The employee or dependent is responsible for the entire premium for COBRA coverage, plus a 2 percent administrative charge.
Employees have a right to choose COBRA benefits when coverage is lost due to:
- a reduction in work hours, or
- termination of employment (other than for gross misconduct), including retirement.
Covered dependents also have a right, independent of the employee's right, to COBRA coverage. The covered dependent may elect COBRA even if the employee does not. A spouse or dependent child covered under an employee's IU-sponsored health care plan has the right to elect COBRA continuation if they lose coverage due to:
- the employee's death;
- the employee's termination (other than for gross misconduct) or reduction in work hours at IU;
- divorce or legal separation from the employee;
- the employee's entitlement to Medicare; or
- if a covered individual ceases to meet the definition of a dependent.
The university must depend on notice from the employee when certain events occur that would qualify the employee or dependent for COBRA. Under COBRA regulations, the employee or family member has the responsibility to inform Indiana University of such events, including: divorce, legal separation, or a child losing dependent status (such as due to marriage). Such notice must be within 30 days of the later of the following dates: date of the event, or the date on which coverage would end under the plan because of the event.
When Indiana University determines that an employee or dependent has experienced an event that qualifies the enrollee for continuation coverage, IU provides a written notice of COBRA rights and an application for the employee and dependents. The employee and/or dependents have 60 days to elect coverage from:
- the date of the qualifying event; or
- the date of the COBRA offer letter, whichever is later.
The length of COBRA coverage is between 18 months and a maximum of 36 months depending on the circumstances:
- 18 months when coverage is lost due to termination or reduction in hours;
- 36 months when coverage is lost due to death, divorce, legal separation, or dependent losing eligibility due to age;
- 29 months if the enrollee becomes disabled within 60 days of termination.
If the employee does not elect COBRA within 60 days, the option to reinstate coverage under the IU-sponsored health plan ends and there is no coverage beyond the date that the active employee's coverage ended. If the enrollee elects COBRA, coverage may also end when:
- premiums are not paid on time;
- the enrollee becomes covered under another group health plan which does not limit coverage for an enrollee's pre-existing condition;
- the enrollee becomes entitled to Medicare;
- IU no longer provides group health coverage to any employee;
- the enrollee's COBRA coverage was extended due to disability, and there is a final determination that the enrollee is no longer disabled.
In considering whether to elect continuation coverage, take into account that a failure to continue group health coverage will affect future rights under federal law. First, an employee can lose the right to avoid pre-existing condition exclusions being applied by other group health care plans if there is more than a 63-day gap in health coverage. Election of continuation coverage may help the employee avoid such a gap. Second, an employee will lose the guaranteed right to purchase individual health insurance policies that do not impose such pre-existing condition exclusions if continuation coverage is not maintained for the maximum time available. Finally, take into account that there are special enrollment rights under federal law. An employee has the right to request special enrollment in another group health plan for which s/he is otherwise eligible (such as a plan sponsored by a spouse’s employer) within 30 days after group health coverage ends because of a qualifying event. An employee will also have the same special enrollment right at the end of continuation coverage if continuation coverage is maintained for the maximum time available.
COBRA benefits are provided subject to continued eligibility for coverage. Indiana University has the right to terminate COBRA coverage retroactive to the date on which eligibility ends.
If an employee terminates employment in order to perform military service, the employee has the right under USERRA to elect to continue existing IU-sponsored health plan coverage including coverage for his or her dependents for up to 24 months while in the military. The university administers this coverage by extending the employee COBRA eligibility period to a total of 24 months. The employee is responsible for the entire premium plus a 2 percent administration fee.
Even if the employee doesn’t elect to continue coverage during military service, he or she has the right to be reinstated in an IU-sponsored health plan upon reemployment, generally without any waiting periods or exclusions except for service-connected illnesses or injuries.
This is an overview of USERRA health plan coverage rights and actual coverage may vary depending on circumstances.
For additional information on USERRA health plan rights, contact VETS at 1-866-4-USA-DOL or visit their web site at www.dol.gov/vets. An interactive online USERRA Advisor can be viewed at www.dol.gov/elaws/userra.htm.
Summary of actions that the participant must take:
- Notify the university within 30 days of a "change in status," such as divorce, or when a child loses eligibility (e.g., due to marriage or the child is no longer a full-time student).
- Notify the university if termination is for military service.
- Submit an application to elect COBRA within 60 days of:
- the date coverage ended; or
- the date of the COBRA offer letter, whichever is later.
- Pay initial COBRA premiums to-date within 45 days of electing COBRA.
- Pay monthly COBRA premiums on time.
- During COBRA coverage, notify the university of changes that will affect communications or eligibility, including:
- address changes;
- changes in marital status;
- changes in disability status;
- entitlement under Medicare; or
- coverage under another group health plan.
Questions about initiating COBRA coverage may be directed to:
University Human Resource Services
For health claim questions, call the respective health plan claim administrator:
Anthem (POS, PPO, and HDHP plans).............(800) 345-2460
CIGNA Dental..................................................(888) 336-8258