Benefits Administration Manual

Consolidated Omnibus Budget Reconciliation Act (COBRA)

405. Retiree Benefit Plan Alternate Coverage

When the terms and conditions of a retiree benefit plan is different than the terms and conditions that are in place for active employees, then the retiree plan is considered alternate coverage (an increase in required premiums; a reduction of benefits; and any other change in the terms or conditions of coverage). The COBRA statute requires an offer of COBRA continuation coverage in these situations.

Delta Dental Premier

An excluded employee that is enrolled in Delta Dental Premier Plan and receiving the enhanced level of coverage will be automatically moved to the basic level of coverage when the dental enrollment form is processed at CalPERS. As a result, the retiree benefit plan is considered alternate coverage and COBRA continuation coverage is offered for the Delta Dental Premier enhanced plan. The retiring employee (and qualified beneficiaries) may not want to elect continuation coverage and pay 102% of the group premium, when they can have Delta Dental Premier Basic Plan benefits in retirement. However, the department cannot avoid its obligation to offer COBRA continuation in this situation. The alternate coverage provision will not have an effect on the Delta Dental PPO, SafeGuard, DeltaCare USA, Premier Access, and Western Dental plans.

Vision Benefit COBRA offer upon Retirement

The Personnel Office must offer retiring employees vision coverage through COBRA. The COBRA qualifying event is a voluntary or involuntary termination of employment.

Retiree Vision Program

Because the terms and conditions that are in place for active employees vision plan are different than the Retiree Vision Program, the Personnel Office must offer COBRA continuation coverage to retiring employees and their eligible dependents to continue their current vision plan. The COBRA qualifying event is a voluntary or involuntary termination of employment.

Updated February 14, 2011 at 1:48 PM.