More Information on Leaving the Lumenos of Georgia Health Insurance Plan

Coverage That May Be Continued

Generally, a qualified beneficiary is entitled to the same coverage that the qualified beneficiary had immediately preceding the qualifying event, which includes any tier or level of coverage included within that pre-qualifying event coverage that may apply. Thus, if you had family coverage prior to a termination of employment, you may elect to continue family coverage for yourself and other qualified beneficiaries, or you may elect single coverage for yourself if your qualified beneficiary family members decline COBRA coverage. Likewise, a divorced spouse (or dependent child ceasing to be eligible) would be entitled to elect single Traditional Health coverage.

Once a qualified beneficiary elects coverage, the qualified beneficiary is subject to the same annual limits (e.g. Bridge limits and out of pocket maximums) that apply to the tier of coverage elected by the qualified beneficiary. For example, if the qualified beneficiary elects single COBRA continuation coverage, the qualified beneficiary is subject to Bridge limits and the out of pocket maximums applicable to single coverage under the Lumenos plan. Also, all of the qualified beneficiary's expenses credited towards Lumenos plan limits prior to the qualifying event will be credited towards the annual Lumenos plan limits applicable to the COBRA continuation coverage elected by the qualified beneficiary for the remainder of the Plan year.

Special Rule for HRAs

A qualified beneficiary may continue the level of coverage in effect under the HRA immediately preceding the qualifying event for the remainder of the Plan year, even if the qualified beneficiary elects a lower tier of coverage. When a subsequent Plan year begins, the qualified beneficiary, family unit (or if no family unit, the single qualified beneficiary) will be entitled to any unused amounts from the previous Plan year plus an increase in the HRA coverage level equal to the Employer contribution applicable to the coverage tier elected by the qualified beneficiary.

Example: Employee A and spouse B are covered by the Lumenos plan. On March 31, employee A and spouse B have $1,000 available for reimbursement under the HRA. On April 1, employee A dies. Spouse B elects single level coverage and the HRA. Under the HRA, the spouse may continue the $1,000 HRA through the remainder of the year (reduced by expenses paid from the HRA through the end of the year). On the following January 1, spouse B will be entitled to any unused amount from the previous year and an increase in HRA coverage equal to the company contribution for single coverage.

Changing COBRA Coverage

The COBRA coverage that you and/or your qualified beneficiaries elect may be changed in the following situations:

• if the company modifies the Plan and that modification applies to all active employees who have the same tier of Plan coverage as the qualified beneficiary, then coverage for the qualified beneficiary will be modified in the same way
• qualified beneficiaries may make changes to COBRA coverage during open enrollment
• qualified beneficiaries can make the same changes to coverage during the Plan year that active employees can make.

Duration of Coverage

Qualified beneficiaries may continue coverage for 18 months if you lose group health coverage because of a termination of employment (for reasons other than gross misconduct) or your coverage ends because of a reduction in hours of employment. Qualified beneficiaries other than the covered employee may continue coverage under the Plan for 36 months if coverage is lost as a result of the covered employee's death, a divorce or legal separation or a dependent child/domestic partner ceasing to be a dependent, or you become entitled to Medicare.

If you or a qualified beneficiary family member is determined by the Social Security Administration to have been disabled at any time prior to the end of the first 60 days of continuation coverage, COBRA may be extended from 18 months up to 29 months. You or a qualified beneficiary must notify the Plan Administrator prior to the end of the end of the original COBRA period (up to 18 months) or the 60-day notice period, whichever comes first. The 60 day notice period ends 60 days after the latter of:

1. the date of the determination,
2. the date of the qualifying event (i.e. termination of employment)
3. the date that coverage is lost as a result of the qualifying event or
4. the date that a qualified beneficiary is notified through this SPD or the General
5. Notice of the obligation to provide notice.

If the Social Security Administration determines that you or a qualified beneficiary is no longer disabled while on COBRA continuation coverage, you or a qualified beneficiary must notify the Plan Administrator within 30 days of the date the Social Security Administration's determination that you are no longer disabled.

If you become entitled to Medicare (and don't lose coverage under the Plan) and then terminate employment or have a reduction in hours of employment within 18 months of your Medicare entitlement, your qualified beneficiary spouse and/or covered children/domestic partner are eligible to receive 36 months of continuation coverage beginning on the Medicare entitlement date.

If COBRA coverage was elected following a termination of employment or reduction in hours of employment, additional qualifying events (such as divorce, Medicare entitlement, or death) may occur during the first 18 months (or during the disability extension discussed above) that may result in an extension of the 18-month (or 29 month) continuation period to 36 months for your covered spouse and dependents. In no event will COBRA continuation coverage last longer than 36 months from the date of the termination of employment or reduction in hours of employment. You or your qualified beneficiary must notify the Plan Administrator if a second qualifying event occurs during your continuation coverage period.

Early Termination of Coverage

Your continuation coverage will end prior to the expiration of the 18-, 29-, or 36-month period for any of the following reasons:

• the company no longer provides group health coverage to any of its employees
• the qualified beneficiary does not make the required payments (within the grace period) you or a qualified beneficiary on COBRA becomes covered - after the date COBRA is elected - under another group health plan (whether or not as an employee) that does not contain any applicable exclusion or limitation with respect to any pre-existing condition of the individual you or a qualified beneficiary on COBRA becomes entitled to Medicare after the date COBRA is elected (this does not apply during the 1st 18 months of continuation coverage due to a military leave of absence)
• coverage has been extended for up to 29 months due to qualified beneficiary's disability and there has been a final determination that the qualified beneficiary is no longer disabled on the 29 month period is exhausted

Cost of Coverage

Under federal law, you are required to pay 102% of the cost for your continuation coverage (which is equal to the cost to the Plan to provide the tier of traditional coverage that you elect and the HRA coverage level that you continue). If your coverage extends from 18 to 29 months due to a qualifying disability, you may be required to pay 150% of the cost starting on the 19th month of continuation coverage. The cost of coverage under the Plan periodically changes. If you elect continuation coverage, the company will notify you of any changes in the cost.

The initial payment for continuation coverage is due 45 days from the date of your COBRA election. This initial payment must cover the period through the end of the month preceding the month in which the initial premium deadline falls. Thereafter, you must pay for coverage on a monthly basis for which you have a grace period of at least 30 days. Payment is due (without the grace period) at the first of the month.

If you have any questions about your rights under COBRA, contact your personnel/payroll office.

IMPORTANT! The Claims Administrator is not a continuing coverage administrator. It is not responsible for any notifications, billings or collections. The Claims Administrator will continue to process claims for members covered by the continuing coverage provisions.

IMPORTANT! Special rules apply to continuation of coverage under USERRA. The Plan will be administered in accordance with both COBRA and USERRA.