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HomeMy WebLinkAbout97-088 • CITY OF LAKEVILLE RESOLUTION Date: April 21, 1997 Resolution No.• 97-88 Motion by: xolber~ Seconded by: Mulvihill RESOLUTION AMENDING THE EMPLOYEE HANDBOOK FOR CONTINUATION OF INSURANCE UPON REDUCTION OF AN EMPLOYEE' S HOURS OF EMPLOYMENT, TERMINATION OF EMPLOYMENT, OR OTHER QUALIFYING EVENT Now, therefore be it resolved, by the City Council of the City of Lakeville that effective immediately, the policy on page 35a and 35b of the Employee Handbook, "Continuation of Insurance while on Unpaid Leave, Resignation, Termination or Retirement dated December 18, 1989 is hereby rescinded and replaced with "Continuation of Insurance upon Reduction of an Employee's Hours of Employment, Termination of Employment, or Other Qualifying Event" dated Apri121, 1997. Adopted by the City Council of the City of Lakeville this 21st day of April, 1997. CITY OF LAKEVII,LE Duane Zaun, Ma ATTEST: . Charlene Friedges, Cit Jerk • CONTINUATION OF INSURANCE UPON REDUCTION OF AN EMPLOYEE' S HOURS OF EMPLOYMENT. TERMINATION OF EMPLOYMENT. OR OTHER UALIFYING EVENT POLICY Federal law, known as COBRA, permits employees and their families to temporarily extend health coverage (called "continuation coverage") at their own expense, at group rates, where coverage under the plan would otherwise end inthe case of certain "qualifying events". INDIVIDUALS ENTITLED TO CONTINUATION OF COVERAGE L .Employees. An employee may have a right to choose continuation coverage if the employee loses group health coverage because of a reduction in the employee's hours of employment or the termination of employment (for reasons other than gross misconduct). 2. Spouses. A spouse of an employee covered by the City's group health plan has the right to choose continuation coverage for his/herself if the spouse loses coverage for any of the following four reasons: a) Death of the spouse/employee. • b) Termination of the spouse/employee's employment (for reasons other than gross misconduct) or reduction in the spouse/employee's hours of employment; c) Divorce or legal separation; or d) The spouse/employee becomes entitled to Medicare benefits. 3. Children. A dependent child of an employee covered by the City's group health plan, including a child who is born to or placed for adoption with a covered employee during a period of COBRA continuation coverage, has the right to continuation coverage if group health coverage is lost for any of the five following reasons: a) The death of a parent. b) The termination of a parent's employment (for reasons other than gross misconduct) or reduction in a parent's hours of employment with the City; c) Parents' divorce or legal separation; d) A parent becomes entitled to Medicare benefits; or • e) The dependent ceases to be a "dependent child" under the City's group health plan. 35a CONTINUATION PERIOD • Continuation coverage maybe maintained for three (3) years, except: a) Where group health coverage is lost because of a termination of employment or reduction in hours, in that case, the required continuation coverage period is eighteen (18) months; or b) Where a qualified beneficiary (including an employee) is.disabled, as determined under the;Social Security Act, at the time of termination of employment or reduction in hours or at anytime during the first sixty (60) days of COBRA continuation coverage. In that case, the qualified beneficiary and. any non- disabled family members who are entitled to COBRA continuation coverage are entitled to a required continuation coverage period oftwenty-nine (29) months. c) Upon entry of a valid decree of dissolution of marriage, an insured's former spouse and dependent children may elect to continue coverage under a policy which provides coverage for a spouse, pursuant to the requirements of Minn. Stat. § 62A.21, which coverage shall be continued until the earlier of a) the date the insured's former spouse becomes covered under any other group health plan; or b) the date coverage would otherwise terminate under the policy. Any required premium contributions for the coverage shall be paid by the insured on • a monthly basis. TERMINATION OF CONTINUATION COVERAGE Plan eligibility ceases if: a) The City no longer provides group health coverage to any of its employees; b) The premium for continuation coverage is not paid; c) An individual becomes an employee covered under another group health plan, except a group health plan that limits or excludes coverage for any preexisting condition of an individual receiving COBRA continuation coverage; d) An-individual becomes-entitled. to Medicare benefits; or e) An individual was previously married to a covered employee and subsequently remarried and is covered under the new spouse's group health plan. • 35b S r ELECTION AND PREMIUM PAYMENT • If an employee decides to continue group coverage, the employee must complete an election form (provided by the City) and return it to the address shown on the election form within sixty (60) days of the later of these dates or the employee loses his/her right to elect coverage: a) The date coverage is schedule to stop; or b) The date of this election packet mailing. It is the employee's: responsibility to pay he monthly premiums for the plan(s) the employee wishes to continue. The law allows the employee to defer payment for the first monthly premium for forty-five (45) days from the day the employee signs the election forms. Premium payments for all subsequent months should be received in the office indicated above by the first day of the month of coverage, no later than the 30th day of the month of coverage. Failure to make timely~ayment will be cause for termination of coverage with no onnortunity for reinstatement of coverage. CONVERSION TO INDIVIDUAL POLICY A covered .employee, surviving spouse, or dependent, at the expiration of the continuation • coverage provided under State Law, is authorized to obtain from the insurer offering the group policy or group subscriber contract, at the employee's, spouse's, or dependent's option and expense, without further evidence of insurability and without interruption of coverage, an individual policy of insurance or an individual subscriber contract as provided under Minn. Stat. § 62A.17. The employee, surviving spouse, or dependent must make application to the insurer within 30 days of the City's notice of the expiration of the continued coverage and upon payment of the appropriate premium. • 35c