CCPOA BENEFIT TRUST FUND -- DENTAL, VISION, AND PIGGYBACK BENEFITS

NEW COBRA RIGHTS UNDER THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

This notice contains important information about your right to continue your dental, vision, and/or Piggyback coverage in the CCPOA Benefit Trust Fund (the “Trust”), the availability of a new COBRA subsidy and a second opportunity to elect COBRA continuation coverage. 

• If you were involuntarily terminated on or after September 1, 2008 and you and your family lost dental, vision, and/or Piggyback coverage through the Trust, then you and your family may be eligible for a 65% reduction of your COBRA premiums for up to 9 months as of March 1, 2009.
  
  
• If you or your family members did not elect COBRA coverage or allowed COBRA coverage to terminate prior to March 1, 2009, you and your family members may have an additional opportunity to elect it now and to take advantage of the COBRA premium reduction.
  
• If you received a COBRA election notice between February 17, 2009 and the date of this notice, the period for you to elect COBRA has been extended to the 60 day period measured from the date of this notice.

Please read this notice carefully for information about these new rights and return the relevant forms to the Trust office if you and/or your family members believe you are eligible.  If you became eligible for COBRA for a reason other than a termination of employment (e.g., divorce, death or loss of dependent status), the premium reduction and the second COBRA election period referenced in the first two bullet points above are not available to you.  Note:  No other part of the Trust’s COBRA procedures or policies as described in the COBRA Election Notice you received from your personnel office has changed.

The American Recovery and Reinvestment Act of 2009 (ARRA) reduces the COBRA premium in some cases.  You are receiving this election notice because you experienced a loss of coverage that occurred during the period that begins with September 1, 2008 and ends with December 31, 2009 and you may be eligible for the temporary premium reduction for up to nine months.  To help determine whether you can get the ARRA premium reduction, you should read this notice and the attached documents carefully.  ARRA also makes a second COBRA election period available to premium-eligible individuals who do not currently have COBRA coverage.  Who is eligible to receive the ARRA COBRA premium reduction?  “Assistance Eligible Individuals” as defined by ARRA are eligible for the premium reduction.  An individual (employee or covered family member) may qualify as an “Assistance Eligible Individual” and get reduced COBRA premiums if he or she:

• Becomes eligible for COBRA coverage at any time during the period from September 1, 2008 through December 31, 2009; and


• Becomes eligible for COBRA coverage because of the employee’s “involuntary termination” (except due to gross misconduct) from employment that occurred between September 1, 2008 and December 31, 2009; and


• Properly elects and maintains COBRA coverage during his/her original COBRA election period or during the special election period described in this notice; and


• Is not eligible for other group health plan coverage (i.e., medical, dental, and vision coverage) or for Medicare.

If you or your dependents believe you meet the criteria for the premium reduction, complete the “Application for COBRA Premium Reduction” and return it to the Trust within 60 days of the date you receive a hard copy of this notice.  If you do not currently have COBRA coverage, you may be eligible for the new second COBRA election period.  To elect COBRA coverage, please complete and return the COBRA Election Form and the “Application for COBRA Premium Reduction” to the Trust within 60 days of the date you receive a hard copy of this notice, if applicable. 

If elected, COBRA continuation coverage will begin on March 1, 2009 and can last until the 18 month period measured from the date you originally lost Trust coverage. You may elect to continue the same benefits you had on the date your coverage originally terminated.If you previously received a COBRA election notice between February 17,  2009 and the date of this notice, you and your dependents may still elect COBRA even if you and your dependents are not eligible for the ARRA premium reduction. To elect COBRA continuation coverage, follow the instructions on the following pages to complete the COBRA Election Form and submit it to the Trust within 60 days of the date you receive a hard copy of this notice. You may elect to continue the same benefits you had on the date your coverage originally terminated.  Note:  If you are also eligible for the ARRA premium reduction, complete and return the Application for COBRA Premium Reduction with your COBRA Election Form.The current monthly premiums for the plan’s coverage are listed below. The coverage you are offered is equivalent to your current coverage.  The rate is subject to change based upon the renewal of the Trust’s contracts with the various providers or claims experience.  If you choose to continue your coverage, you will be notified of any change in the rate. COBRA continuation coverage will cost as follows:

If you or your dependents qualify for the ARRA premium reduction and are considered “Assistance Eligible Individuals”, you or your dependents may pay the above-referenced reduced COBRA premium for up to nine months.  After this maximum nine month period, the full, un-subsidized COBRA premium amount must be paid for the remainder of your or your dependents’ COBRA coverage period.  NOTE:  If you or your dependents are eligible for other group health coverage (such as through a new employer’s plan or a spouse’s plan) or Medicare, you or your dependents are not eligible for the premium reduction.  If you or your dependents receive the premium reduction and later become eligible for group health plan coverage (i.e., medical, dental, and vision coverage) or for Medicare, you or your dependents must notify the Trust using the Participant Notification Form.  A 110% tax penalty may be imposed by the IRS on the amount of any subsidy that is improperly received.  IMPORTANT:  If you decide to elect COBRA continuation coverage pursuant to the rights described in this notice, you must pay for continuous coverage retroactive to the date you first became eligible for COBRA continuation coverage for the first pay period on or after March 1, 2009.  Your initial premium must be paid within 45 days of your election.  You will lose your coverage if your initial premium is not paid when due. 

If you have any questions about this notice, the ARRA premium reduction or your rights to COBRA continuation coverage, you should contact Amy Livingstone at 2515 Venture Oaks Way, Suite 200, Sacramento, CA  95833-4235 or 1-800-468-6486.

Q&A’s ON THE COBRA PREMIUM REDUCTION PROVISIONS UNDER ARRA

(1) Who is eligible to receive the COBRA premium reduction?  “Assistance Eligible Individuals” as defined by ARRA are eligible for the COBRA premium reduction.  An individual (employee or covered family member) may qualify as an “Assistance Eligible Individual” and get reduced COBRA premiums if he or she:

• Becomes eligible for COBRA coverage at any time during the period from September 1, 2008 through December 31, 2009; and


• Becomes eligible for COBRA coverage because of the employee’s “involuntary termination” (except due to gross misconduct) from employment that occurred between September 1, 2008 and December 31, 2009); and


• Properly elects and maintains COBRA coverage during his/her original COBRA election period or during the special election period described in paragraph (2) below; and


• Is not eligible for other group health plan coverage (e.g., plan sponsored by a spouse’s employer) or for Medicare.

Example:  Bill and his wife and children have dental, vision, and Piggyback coverage through the Trust.  Bill is involuntarily terminated for a reason other than gross misconduct on October 10, 2008.  As a consequence, Bill and his family lose dental, vision and Piggyback coverage as of October 31, 2008.  Bill properly elects and maintains COBRA coverage for himself and his family.  From March 1, 2009 through November 30, 2009, Bill and his family will only be required to pay 35% of their COBRA premium for dental, vision and Piggyback COBRA coverage, provided they are not eligible for other group health plan coverage or for Medicare.  Bill and his family must pay the full COBRA premium due for the remainder of their COBRA coverage period. 

(2) What if I was involuntarily terminated on or after September 1, 2008, but declined COBRA or elected COBRA but allowed COBRA to lapse on or before the date of this notice – can I elect COBRA now?  Yes - If your employment was involuntarily terminated (except due to gross misconduct) between September 1, 2008 and February 17, 2009 and you lost coverage under the Trust during that period and either failed to elect COBRA or allowed COBRA to lapse on or before February 17, 2009, you may elect COBRA within 60 days of the date you receive a hard copy of this Notice by properly completing and submitting the COBRA Election Form to the Trust office and the Application for COBRA Premium Reduction.  Such COBRA coverage will commence as of March 1, 2009.  Note: Your maximum COBRA coverage period will run from the date coverage was first lost.

Example:  Peter and his wife Maria have dental, vision, and Piggyback coverage through the Trust.  Peter is involuntarily terminated for a reason other than gross misconduct on September 12, 2008.  As a consequence, Peter and Maria lose dental, vision, and Piggyback coverage as of September 30, 2008.  Maria elects COBRA coverage for herself, but Peter does not.  Peter now has a second chance to elect COBRA coverage.  If Peter properly elects COBRA coverage within 60 days of receiving this Notice, his COBRA coverage will begin on March 1, 2009.  Peter and Maria’s 18-month COBRA coverage period will end on March 31, 2010 (18 months after October 1, 2008), unless terminated earlier under applicable law.  Both Maria and Peter are only required to pay 35% of their COBRA premium as of March 1, 2009 through November 30, 2009, provided they are not eligible for other group health plan coverage or for Medicare.  Both Maria and Peter must pay the full COBRA premium for the remainder of their COBRA coverage period.

(3) What is the COBRA premium reduction?  Under the Act, “Assistance Eligible Individuals” will only be required to pay 35% of the cost of COBRA coverage for COBRA months beginning on and after March 1, 2009.  This premium reduction is available for up to nine months.  If your COBRA continuation coverage lasts for more than nine months, you will have to pay the full amount to continue your COBRA continuation coverage.   Eligibility for the COBRA premium reduction will end earlier upon any of the following events if the eligible individual:

• Becomes eligible for other group health plan coverage (i.e., medical, dental, and vision coverage) (regardless of actual enrollment);


• Becomes eligible for Medicare coverage (regardless of actual enrollment);


• Loses COBRA coverage for any reason (e.g., COBRA ends); or


• Fails to timely pay the required 35% share of the COBRA premium.

Eligible individuals must notify the Trust immediately in writing if they become eligible for Medicare or other group health plan coverage (e.g., you obtain a new job that offers group health plan coverage, or you are eligible for coverage under the plan of your spouse’s employer).  Written notice must be sent to the Trust on the Participant Notification Form at the address below within 30 days of attaining eligibility for the other coverage.  If timely notice is not provided to the Trust, a 110% tax penalty may be imposed by the IRS on the amount of any improperly received COBRA premium reduction.

(4) Who is NOT eligible for the COBRA premium reduction?  Generally, the COBRA premium reduction is NOT available to: (1) individuals who are eligible for other group health plan coverage (i.e., medical, dental, and vision coverage) or for Medicare; (2) individuals who do not satisfy the definition of “qualified beneficiary” under federal law – generally, domestic partners, etc.; (3) employees and dependents who are eligible for COBRA because of a voluntary termination, death, divorce, legal separation, or loss of dependent status; (4) employees and dependents who lose coverage because of the employee’s involuntary termination that occurs before September 1, 2008 or after December 31, 2009; and (5) employees and dependents who lose coverage because of the employee’s termination due to gross misconduct.  Lastly, the COBRA premium reduction is available on a limited basis to certain “high income individuals”.  The IRS will recapture all or a portion of the COBRA subsidy from individuals with a modified adjusted gross income greater than $125,000 ($250,000 for joint filers).  Contact your tax advisor for details.

(5) What action must I take in order to receive the COBRA premium reduction?

• If you are not currently on COBRA, complete and return the COBRA Election Form within 60 days of the date you receive a hard copy of this notice.  We also require that you complete and return the  “Application for COBRA Premium Reduction” with your COBRA Election Form. 


• If you are currently on COBRA, simply complete and return the “Application for COBRA Premium Reduction” within 60 days of the date you receive a hard copy of this notice. 

• Because the Trust is still implementing procedures to facilitate the COBRA premium reduction, please pay the full COBRA premium due for April 2009.  You will receive a refund or credit against future COBRA premium payments if the Trust determines you are eligible.  [Note:  Refunds for COBRA payments made for months before March 2009 are not available.] 

Please contact the Trust office for copies of the COBRA Election Form and the Application for COBRA Premium Reduction. We will notify you if you are ineligible to receive the COBRA premium reduction.  If you are determined not to be eligible, you may file an appeal with the Trust or with the Department of Labor (www.dol.gov/COBRA or 1-866-444-EBSA).

(6) Who should I contact if I have any questions regarding the COBRA premium reduction?  Contact Amy Livingstone at 2515 Venture Oaks Way, Suite 200, Sacramento, CA  95833-4235, or 1-800-468-6486.

This notice does not fully describe continuation coverage or other rights under the Trust.  More information about continuation coverage and your rights under the Trust is available in your COBRA election notice (provided by your personnel office), the summary plan description for each of these benefits,or from the Trust, contact the number above. 

Summary of the COBRA Premium Reduction Provisions under ARRA

President Obama signed the American Recovery and Reinvestment Act (ARRA) on February 17, 2009.  The law gives “Assistance Eligible Individuals” the right to pay reduced COBRA premiums for periods of coverage beginning on or after February 17, 2009 and can last up to 9 months.To be considered an “Assistance Eligible Individual” and get reduced premiums you:

• MUST be eligible for continuation coverage at any time during the period from September 1, 2008 through December 31, 2009 and elect the coverage;


• MUST have a continuation coverage election opportunity related to an involuntary termination of employment that occurred at some time from September 1, 2008 through December 31, 2009;


• MUST NOT be eligible for Medicare; AND


• MUST NOT be eligible for coverage under any other group health plan (i.e., medical, dental, and vision coverage), such as a plan sponsored by a successor employer or a spouse’s employer.*

*Generally, this does not include coverage for only dental, vision, counseling, or referral services; coverage under a health flexible spending arrangement; or treatment that is furnished in an on-site medical facility maintained by the employer. Individuals who experienced a qualifying event as the result of an involuntary termination of employment at any time from September 1, 2008 through February 16, 2009 and were offered, but did not elect, continuation coverage OR who elected continuation coverage and subsequently discontinued it may have the right to an additional 60-day election period.

IMPORTANT:    If, after you elect COBRA and while you are paying the reduced premium, you become eligible for other group health plan coverage or Medicare you MUST notify the plan in writing.  If you do not, you may be subject to a tax penalty.◊    Electing the premium reduction disqualifies you for the Health Coverage Tax Credit.  If you are eligible for the Health Coverage Tax Credit, which could be more valuable than the premium reduction, you will have received a notification from the IRS.◊    The amount of the premium reduction is recaptured for certain high income individuals.  If the amount you earn for the year is more than $125,000 (or $250,000 for married couples filing a joint federal income tax return) all or part of the premium reduction may be recaptured by an increase in your income tax liability for the year.  If you think that your income may exceed the amounts above, you may wish to consider waiving your right to the premium reduction.  For more information, consult your tax preparer or visit the IRS webpage on ARRA at www.irs.gov.

For information regarding your plan’s COBRA coverage and the ARRA Premium Reduction you can contact the Trust office at 2515 Venture Oaks Way, Suite 200, Sacramento CA  95833-4235, or 1-800-468-6486.If you are denied treatment as an “Assistance Eligible Individual” you may have the right to have the denial reviewed.

For more information regarding reviews or for general information about the ARRA Premium Reduction go to: www.dol.gov/COBRA or call 1-866-444-EBSA (3272)