1.1 This policy establishes the Organization's procedures for administering the continuation of group health plan coverage as required by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended, and codified at 29 U.S.C. sections 1161 through 1168. COBRA requires that covered employees, their spouses, and their dependent children be offered the opportunity to continue group health coverage at their own expense when coverage would otherwise be lost due to certain qualifying events. The primary objectives of this policy are to ensure full compliance with COBRA notification, election, and administration requirements, to provide clear and timely information to qualified beneficiaries about their continuation rights, and to establish internal procedures and responsibilities for COBRA administration that protect the Organization from penalties and litigation arising from non-compliance.

1.2 This policy applies to all group health plans maintained by the Organization that are subject to COBRA, including medical, dental, vision, prescription drug, and health flexible spending account plans, but excluding life insurance, disability insurance, and health savings accounts, which are not subject to COBRA continuation requirements. The policy applies to all covered employees, former employees, their spouses or domestic partners where the plan extends coverage, and their dependent children who are qualified beneficiaries as defined under COBRA. The Organization is subject to COBRA requirements as an employer that employed 20 or more employees on more than 50 percent of its typical business days in the preceding calendar year. Where a state continuation law, commonly referred to as mini-COBRA, provides more generous coverage rights than federal COBRA, the Organization shall comply with the more protective state requirements, and this policy shall be read in conjunction with the applicable state provisions.

1.3 The Organization's designated COBRA Administrator, whether an internal benefits representative within the HR department or an outsourced third-party administrator, shall be responsible for the day-to-day administration of COBRA continuation coverage, including identifying qualifying events and qualified beneficiaries, preparing and delivering all required COBRA notices within the statutory timeframes, calculating and communicating applicable premium amounts, processing COBRA elections and premium payments, coordinating with group health plan carriers and administrators to ensure uninterrupted coverage for electing beneficiaries, tracking coverage periods and termination events, and maintaining all COBRA records and documentation. The HR department shall exercise oversight of the COBRA Administrator's activities and shall conduct periodic audits to verify compliance with this policy and applicable law.

2.1 A qualifying event is any event specified under COBRA that results in the loss of group health plan coverage for a covered employee, their spouse, or their dependent children. Qualifying events for covered employees include voluntary or involuntary termination of employment for any reason other than gross misconduct, and a reduction in the number of hours of employment that results in loss of plan eligibility. Qualifying events for spouses and dependent children include all employee qualifying events plus the death of the covered employee, divorce or legal separation from the covered employee, the covered employee becoming entitled to Medicare, and a dependent child ceasing to meet the plan's definition of an eligible dependent. Each qualifying event triggers specific COBRA continuation rights, and the duration of coverage available depends on the type of qualifying event, as detailed in the coverage duration section of this policy.

2.2 A qualified beneficiary is any individual who was covered under one or more of the Organization's group health plans on the day before a qualifying event and who would lose coverage under the plan as a result of that qualifying event. Qualified beneficiaries include the covered employee, the covered employee's spouse at the time of the qualifying event, and any dependent child of the covered employee who was covered under the plan. A child born to or placed for adoption with the covered employee during a period of COBRA continuation coverage is also a qualified beneficiary. Each qualified beneficiary has an independent right to elect COBRA coverage, meaning that a spouse or dependent child may elect continuation coverage even if the covered employee does not. The COBRA Administrator shall identify all qualified beneficiaries for each qualifying event and ensure that each receives an individual COBRA election notice.

2.3 The Organization bears the responsibility to notify the group health plan administrator of the following qualifying events within 30 days of the event: termination of the covered employee's employment, reduction in the covered employee's hours, the covered employee's death, and the covered employee's entitlement to Medicare. The covered employee, spouse, or dependent child bears the responsibility to notify the Organization's HR department or COBRA Administrator of the following qualifying events within 60 days of the event: a divorce or legal separation from the covered employee, and a dependent child ceasing to meet the plan's eligibility requirements. The Organization shall inform all covered employees of their notification obligations in the COBRA General Notice provided at the time of initial plan enrolment and shall include reminders of these obligations in annual benefits communications. Failure by the covered employee or family member to provide timely notice of these qualifying events may result in the loss of COBRA continuation rights.

3.1 Each qualified beneficiary shall have a 60-day election period within which to elect COBRA continuation coverage. The 60-day election period begins on the later of the date coverage is lost due to the qualifying event or the date on which the COBRA election notice is provided to the qualified beneficiary. If the qualified beneficiary does not elect COBRA coverage within the 60-day period, the right to continuation coverage is permanently waived and cannot be reinstated. Each qualified beneficiary has an independent right to make an election; the covered employee's decision to decline COBRA does not affect the spouse's or dependent children's right to elect. A qualified beneficiary who initially waives COBRA coverage may revoke the waiver at any time during the 60-day election period and elect coverage retroactive to the date of the qualifying event. The COBRA Administrator shall track the election period for each qualified beneficiary and send a reminder notice at least 15 days before the election period expires.

3.2 The COBRA Administrator shall provide a written COBRA election notice to each identified qualified beneficiary no later than 14 days after the date on which the plan administrator is notified of the qualifying event. The election notice shall be sent by first-class mail to the qualified beneficiary's last known address and shall contain all information required under Treasury Regulation section 54.4980B-6, including the name of the plan, a description of the qualifying event and the date of the event, a description of the continuation coverage available and the date on which coverage will terminate if COBRA is not elected, the monthly premium for each available coverage option, instructions for electing coverage and the 60-day election deadline, the 45-day initial premium payment deadline, information about the right to elect coverage independently for each qualified beneficiary, and contact information for the COBRA Administrator. The Organization shall use the Department of Labor model COBRA election notice as a template, customized to reflect the Organization's specific plan details and contact information.

3.3 Upon receipt of a timely COBRA election, the COBRA Administrator shall process the enrolment and notify the group health plan carrier or administrator to reinstate coverage retroactive to the date of the qualifying event, ensuring that there is no gap in coverage for the qualified beneficiary. The qualified beneficiary shall have 45 days from the date of election to make the initial premium payment, which must include all premiums due from the date of the qualifying event through the current coverage month. Failure to make the initial premium payment within the 45-day period shall result in the permanent loss of COBRA continuation rights. Following the initial payment, subsequent premium payments are due on the first day of each month, with a 30-day grace period for late payments. Coverage may be terminated retroactively to the last day of the period for which timely payment was made if the qualified beneficiary fails to pay within the 30-day grace period. The COBRA Administrator shall provide written confirmation of enrolment to the qualified beneficiary within 10 business days of processing the election.

4.1 The maximum duration of COBRA continuation coverage depends on the type of qualifying event. For qualifying events involving termination of employment or reduction in hours, COBRA coverage is available for up to 18 months from the date of the qualifying event. For qualifying events involving the death of the covered employee, divorce or legal separation, the covered employee's entitlement to Medicare, or a dependent child's loss of eligibility status, coverage is available for up to 36 months from the date of the qualifying event. Where a second qualifying event occurs during an 18-month COBRA continuation period, such as the death of the former employee or a divorce, the spouse and dependent children may extend their coverage to a total of 36 months from the date of the original qualifying event. Qualified beneficiaries who are determined to be disabled by the Social Security Administration within the first 60 days of COBRA continuation coverage may extend their coverage period to 29 months, and the Organization may charge up to 150 percent of the applicable premium for months 19 through 29.

4.2 The premium charged to qualified beneficiaries for COBRA continuation coverage shall not exceed 102 percent of the applicable premium, which is the full cost of providing coverage to a similarly situated active employee, including both the employer-paid and employee-paid portions of the premium, plus a 2 percent administrative charge permitted by COBRA. For qualified beneficiaries who extend coverage to 29 months due to a Social Security disability determination, the Organization may charge up to 150 percent of the applicable premium for months 19 through 29 of coverage. Premiums shall be recalculated annually at the time of the group health plan's annual renewal, and qualified beneficiaries shall be notified of any premium changes at least 30 days before the new rates take effect. The COBRA Administrator shall provide qualified beneficiaries with a written premium schedule at the time of election and shall send monthly premium statements or invoices to facilitate timely payment.

4.3 COBRA continuation coverage shall terminate before the end of the maximum coverage period upon the earliest occurrence of any of the following events: the qualified beneficiary fails to make a required premium payment within the applicable grace period, the qualified beneficiary becomes covered under another group health plan that does not contain an exclusion or limitation with respect to any pre-existing condition, the qualified beneficiary becomes entitled to Medicare benefits, the Organization ceases to maintain any group health plan for any employee, or the qualified beneficiary engages in conduct that would justify termination of coverage for a similarly situated active employee, such as fraud. The COBRA Administrator shall provide the qualified beneficiary with written notice of early termination, including the reason for termination and the date on which coverage will end, as early as practicable and in accordance with applicable regulations. The notice shall inform the beneficiary of any conversion rights available under the group health plan.

5.1 The Organization shall provide a written COBRA General Notice to each covered employee and their spouse within 90 days of the date on which group health plan coverage begins, as required under COBRA and ERISA regulations. The General Notice shall inform covered individuals of their rights to COBRA continuation coverage in the event of a qualifying event, describe the qualifying events that may trigger COBRA rights, explain the covered individual's obligation to notify the plan administrator of qualifying events involving divorce, legal separation, or loss of dependent status within 60 days, and provide contact information for the COBRA Administrator. The General Notice may be incorporated into the Organization's Summary Plan Description, provided that it is furnished within the required timeframe. The HR department shall ensure that the General Notice is included in the onboarding materials for all new hires who are enrolled in the group health plan.

5.2 The COBRA Administrator shall maintain complete and accurate records of all COBRA-related activities for each qualifying event, including copies of all General Notices, election notices, and termination notices with proof of mailing dates, COBRA election forms received from qualified beneficiaries, premium payment records including dates received, amounts, and any grace period correspondence, documentation of qualifying events, notification dates, and coverage commencement and termination dates, correspondence with qualified beneficiaries regarding premium delinquency, coverage changes, or disputes, and records of any COBRA-related complaints, inquiries, or appeals. All records shall be retained for a minimum of 6 years from the date of the qualifying event or the termination of COBRA coverage, whichever is later, in accordance with ERISA record-keeping requirements. Records shall be stored securely with appropriate access controls and shall be available for inspection by the Department of Labor, the Internal Revenue Service, or the Organization's auditors upon request.

5.3 The Organization recognises that failure to comply with COBRA requirements carries substantial financial and legal penalties. Under the Internal Revenue Code section 4980B, the Organization may be subject to an excise tax of $100 per day per affected qualified beneficiary for each day during the period of non-compliance, with a minimum tax of $2,500 per qualifying event and a maximum of $500,000 per year for unintentional failures that are corrected within a reasonable time. Under ERISA section 502(c)(1), a court may impose penalties of up to $110 per day against a plan administrator who fails to provide required COBRA notices within the prescribed timeframes. Qualified beneficiaries may also bring private lawsuits under ERISA section 502(a) to recover benefits, obtain injunctive relief, and recover attorneys' fees. To mitigate these risks, the COBRA Administrator shall conduct a quarterly compliance self-audit, and the HR department shall engage an external benefits compliance consultant to review COBRA administration procedures at least annually. This policy shall be reviewed at least annually by the policy owner in consultation with Legal Counsel and the benefits administration team to ensure continued compliance with COBRA regulations and any applicable state continuation laws.