The ACA Makes Timely Notification of Changes in Participant Eligibility Even More Important

It’s important to notify NRECA when an individual at your cooperative is no longer eligible for medical, dental or vision coverage under the NRECA plans. Requirements under the Affordable Care Act (ACA) make timely notification even more critical. The ACA doesn’t permit plan sponsors like NRECA to rescind coverage retroactively to the date an individual is no longer eligible for coverage except in cases of fraud or intentional misrepresentation of a material fact and with 30 days’ prior notice. In all other cases, NRECA can only terminate coverage on the date of notification, not the date an individual is no longer eligible for coverage even though it occurred prior to the date of notification. Consequently, in the event that the date an individual is no longer eligible for coverage precedes notification, NRECA cannot recover premiums or claims paid during the period the individual wasn’t eligible for coverage.

How COBRA works in this situation
Typically, when an individual’s coverage is terminated as a result of a COBRA-qualifying event (e.g., divorce or aging out of coverage), the COBRA administrator—the co-op or UMR—must offer COBRA continuation coverage to the affected individual.  The COBRA election period begins on the date the individual receives the election notice and lasts for 60 days. Regardless of when the notice is provided, the COBRA continuation period begins on the date an individual is no longer eligible for coverage  and continues for a limited period of 36 months (in the event of divorce or aging out of coverage). NRECA will collect COBRA premiums beginning from the date of notification of the COBRA qualifying event.

Please stress to the participants at your co-op how important it is that they let you know as soon as a dependent spouse or child is no longer eligible for coverage.  It is equally important that you report these status changes to NRECA promptly. Timely notification of changes in eligibility is consistent with the terms of the plans, saves the co-op and the Group Benefits Trust money, and facilitates a smoother transition to COBRA coverage for the individual.

Report changes in eligibility to the employee benefits services team by email at ebsmailbox@nreca.coop, or fax them to 402.483.9362. If you have questions, contact the Member Contact Center at 866.673.2299 or contactcenter@nreca.coop.