COBRA: Continuing Healthcare Coverage
The right to COBRA continuation coverage was created by a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA continuation coverage can become available to you and to other members of your family who are covered under the Stryker Corporation Welfare Benefits Plan when coverage might otherwise be lost.
COBRA Continuation Coverage
COBRA continuation coverage is a continuation of plan coverage when coverage would otherwise end because of a life event known as a "qualifying life event." COBRA continuation coverage must be offered to each person who is a "qualified beneficiary." A qualified beneficiary is someone who will lose health plan coverage because of a qualifying life event. Depending on the type of qualifying life event, employees, spouses of employees and dependent children of employees may be qualified beneficiaries.
If you are an employee, you will become a qualified beneficiary if you lose your coverage under the Stryker Corporation Welfare Benefits Plan, Health Care Flexible Spending Account and Employee Assistance Plan because either one of the following qualifying life events happens:
  • Your hours of employment are reduced, or
  • Your employment ends for any reason other than your gross misconduct.
If you are the spouse or domestic partner of an employee, you will become a qualified beneficiary if you lose your coverage under the plan because any of the following qualifying life events happens:
  • Your spouse/domestic partner dies,
  • Your spouse's/domestic partner's hours of employment are reduced or your spouse's employment ends for any reason other than his or her gross misconduct,
  • You become divorced from your spouse,
  • Your Domestic Partner Declaration is terminated, or
  • Your spouse/domestic partner becomes enrolled in Medicare (Part A or Part B).
Your dependent children will become qualified beneficiaries if they lose coverage under the plan because any of the following qualifying life events happens:
  • The parent-employee dies,
  • The parent-employee's hours of employment are reduced or the parent-employee's employment ends for any reason other than his or her gross misconduct,
  • The parents become divorced,
  • Your parent's Domestic Partner Declaration is terminated,
  • The child stops being eligible for coverage under the plan as a "dependent child," or
  • The parent-employee becomes eligible for Medicare (Part A or Part B).
Voluntary termination of coverage during Annual Enrollment is not a COBRA Qualifying Life Event.
The Stryker Corporation Welfare Benefits Plan will offer COBRA continuation coverage to qualified beneficiaries only after the plan administrator has been notified in writing that a qualifying life event has occurred. You do not have to notify the plan administrator when the qualifying life event is the end of employment, reduction of hours of employment or death of the employee. However, for the other qualifying life events (divorce of the employee and spouse or a dependent child's losing eligibility for coverage as a dependent child), you must notify the plan administrator, via your Benefits representative, in writing, within 60 days after the date the qualifying life event occurs or the date coverage is lost, whichever is later. You will be required to provide documentation—such as a divorce decree—that a qualifying life event has occurred within 60 days of the event.
Once the plan administrator receives notice that a qualifying life event has occurred and supporting documentation has been provided, COBRA continuation coverage will be offered to each of the qualified beneficiaries. For each qualified beneficiary who elects COBRA continuation coverage, COBRA continuation coverage will begin on the date of the qualifying life event.
Duration of COBRA Continuation Coverage
COBRA continuation coverage is a temporary continuation of coverage. When the qualifying life event is the death of the employee, enrollment of the employee in Medicare (Part A, Part B or both), your divorce, domestic partnership termination or a dependent child losing eligibility as a dependent child, COBRA continuation coverage lasts for up to 36 months.
When the qualifying life event is the end of employment or reduction of the employee's hours of employment, COBRA continuation coverage lasts for up to 18 months. There are three ways in which this 18-month period of COBRA continuation coverage can be extended.
Disability Extension of 18-Month Period of Continuation Coverage
If you or anyone in your family covered under the Stryker Corporation Welfare Benefits Plan is determined by the Social Security Administration to be disabled at any time during the first 60 days of COBRA continuation coverage, you and your entire family who are entitled to COBRA because of the same qualifying life event can receive up to an additional 11 months of COBRA continuation coverage, for a total maximum coverage period of 29 months. To be eligible for this extension, you must make sure that the plan administrator is notified in writing of the Social Security Administration's determination within 60 days of the later of the date of the aware notice from the Social Security Administration, the date of the qualifying life event, or the benefit termination date, and before the end of the 18-month period of COBRA continuation coverage. This notice should be sent to the plan's COBRA administrator. You will be required to supply a copy of Social Security Administration's disability determination. If you or your family member is subsequently determined by the Social Security Administration to no longer be disabled, you must notify the plan's COBRA Administrator of that fact within 30 days of the Social Security Administration's determination.
Second Qualifying Life Event Extension of 18-Month Period of Continuation Coverage
If your family experiences a second qualifying life event while receiving COBRA continuation coverage (either during the initial 18-month continuation period or during the following 11 months if there is an extension due to disability), the spouse and dependent children in your family can get additional months of COBRA continuation coverage, up to a maximum of 36 months. This extension is available to the spouse and dependent children if the former employee dies, or gets divorced or legally separated. The extension is also available to a dependent child when that child stops being eligible under the plan as a dependent child. In all of these cases, you must make sure that the plan administrator is notified of the second qualifying life event within 60 days of the second qualifying life event via your Benefits representative. This notice must be sent to the plan's COBRA Administrator. You will be required to supply documentation—such as a marriage or birth certificate—that a second qualifying life event has occurred.
Medicare Entitlement Prior to Termination of Employment or Reduction in Hours
If you enroll in Medicare (Part A, Part B or both) in the 18-month period immediately preceding your termination of employment or reduction in hours, your spouse and dependent children can get additional months of COBRA continuation coverage, up to a maximum of 36 months from the date you enrolled in Medicare.
Contacting the COBRA Administrator
Wage Works
P.O. Box 660453
Dallas, TX 75266-0453
866-206-5751
When COBRA Coverage Ends
COBRA continuation coverage will terminate on the earliest of the following dates:
  • The end of the applicable maximum coverage period
  • If any required premium is not paid on time, the last day of the period for which a timely payment was made
  • The date, after the date of the COBRA election, that a qualified beneficiary first becomes covered under another group health plan
  • The date after the date of the COBRA election, that a qualified beneficiary first enrolls in Medicare
  • The last date on which the employer ceases to provide any group health plan for its employees
  • In the case of the disability extension, the last day of the 11-month extension period
Continuation coverage may also be terminated for any reason the plan administrator would terminate coverage of participant or beneficiary not receiving continuation coverage (such as fraud).
If you elect COBRA continuation coverage under the health care FSA, that coverage will continue until the end of the calendar year during which the qualifying life event occurred as long as timely premiums continue to be made.
Electing COBRA Continuation Coverage
Each qualified beneficiary has an independent right to elect continuation coverage. For example, either you or your spouse may elect continuation coverage, or only one of you may choose to do so. Parents may elect to continue coverage on behalf of their dependent children only. A qualified beneficiary must elect coverage by the date specified on the election form. Failure to do so will result in loss of the right to elect continuation coverage under the plan. A qualified beneficiary may change a prior rejection of continuation coverage any time until that date.
In considering whether to elect continuation coverage, you should take into account that you have special enrollment rights under federal law. You have the right to request special enrollment in another group health plan for which you are otherwise eligible (such as a plan sponsored by your spouse's employer) within 30 days after your group health coverage ends because of the qualifying life event listed above. You will also have the same special enrollment right at the end of continuation coverage if you get continuation coverage for the maximum time available to you.
Cost of COBRA Continuation Coverage
Generally, each qualified beneficiary may be required to pay the entire cost of continuation coverage. The amount a qualified beneficiary may be required to pay may not exceed 102 percent of the cost to the group health plan (including both employer and employee contributions) for coverage of a similarly situated plan participant or beneficiary who is not receiving continuation coverage (or, in the case of an extension of continuation coverage due to a disability, 150 percent).
The Trade Preferences Extension Act of 2015 has extended the Trade Reform Act of 2002, which created a new tax credit for certain individuals who become eligible for trade adjustment assistance (eligible individuals). Under these provisions, eligible individuals can either take a tax credit or get advance payment of premiums paid for qualified health insurance, including continuation coverage. If you have questions about these new tax provisions, you may call the Healthcare Tax Credit Customer Contact Center toll-free at 800-829-1040 or visit www.IRS.gov/HCTC. More information about the Trade Act is also available at www.doleta.gov/tradeact/.
Paying for COBRA Continuation Coverage
First Payment for Continuation Coverage
If you elect continuation coverage, you do not have to send any payment for continuation coverage with the election form. However, you must make your first payment for continuation coverage within 45 days after the date of your election. If you do not make your first payment for continuation coverage within this 45-day period, you will lose all continuation coverage rights under the plan.
Note: Depending on the date you submit your election your first payment could include several months, because coverage is retroactive to the date that benefits terminated under the plan as a result of the qualifying life event.
Periodic Payments for Continuation Coverage
After you make your first payment for continuation coverage, you will be required to pay for continuation coverage for each subsequent month of coverage. If you make a periodic payment on or before its due date, your coverage under the Stryker Corporation Welfare Benefits Plan will continue for that coverage period without any break. The plan will send an annual notice of payments due for these coverage periods.
Grace Periods for Periodic Payments
You will be given a grace period of 30 days to make each periodic payment. Your continuation coverage will be provided for each coverage period as long as payment for that coverage period is made before the end of the grace period for that payment. If you fail to make a periodic payment before the end of the grace period for that payment, your coverage will be terminated as of the last fully paid period of coverage, and you will lose all rights to continuation coverage under the plan.
COBRA Coverage for Domestic Partners
Although not required by COBRA law, under the Stryker Plan, a covered domestic partner has the same COBRA rights as a spouse. Termination of the domestic partner relationship is treated in the same manner as divorce.