OM&C Member Benefits in the Event of Separation

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Tuesday, March 2, 2010

 

OM&C MEMBER BENEFITS IN THE EVENT OF SEPARATION
 
The following briefly describes the insurance benefits available to separated OM&C employees.
 
HEALTH CARE for employees not eligible for retirement
 
Coverage terminates immediately on separation from the Company.  COBRA coverage is available for up to a maximum of 18 months from date of separation.  The separated employee pays the full COBRA premium directly to the CMS Energy Benefits Service Center at Fidelity (if elected).  COBRA allows the separated employee to continue the coverage they had prior to separation (for any individual(s) covered prior to separation) by paying the monthly premium.  There is no pre-existing condition clause or waiting period.  An earlier ending date under COBRA may occur if the person becomes covered under another group health care plan, fails to pay premium on a timely basis, or otherwise loses eligibility.
 
2010 COBRA premiums differ depending on the health care plan and the number of persons covered. For example, the Community Blue PPO 85% monthly plan premium costs are:
 
                        Participant:                           $   528.28
                        Participant + one:                 $1,055.60
                        Participant + two or more:    $1,424.72
 
Prescription drug and dental coverage are included in these rates. An individual can convert to an individual policy after COBRA ends.  Because of adverse selection for conversion policies, the rates are very high for the significantly reduced benefits available.
 
Under the American Recovery and Reinvestment Act of 2009, certain individuals who are eligible for COBRA continuation health coverage, or similar coverage under state law, may receive a subsidy for 65% of the premium.
 
For more information on the COBRA subsidy, Click Here.
 
COBRA COVERAGE FOR LAID OFF EMPLOYEES WHO ARE REHIRED ON A TEMPORARY FULL-TIME BASIS
 
An individual who is rehired on a temporary full-time basis and is eligible for coverage under the Company’s Group Health Care Plan by paying the full premium will not lose eligibility for the COBRA premium subsidy if otherwise eligible, as coverage under the Company plan is not considered “other coverage”. Eligibility for coverage under a spouse's or another employer's health care plan is considered “other coverage” and will cause a loss of eligibility for the COBRA subsidy.
 
FLEXIBLE SPENDING ACCOUNT
 
Health Care Flexible Spending Account contributions automatically end on separation unless the separated employee elects to continue paying (after tax) contributions under COBRA continuation.  No change in the amount of future contributions (from separation through year-end) is possible.  The contribution is payable on a monthly after tax basis and a 2% administration fee is added to the contribution election. Claim reimbursement is on the same basis as for active employees.
 
If COBRA continuation is not elected, separated employees can use their Health Care Flexible Spending Account (FSA) for claims incurred prior to separation, up to the full amount elected for the calendar year. Claims incurred after separation (and after contributions have ceased to your FSA) are ineligible for payment unless the employee elects continuation coverage and makes appropriate contributions on a timely basis.
 
Dependent Care Flexible Spending Account cannot be continued after separation. Claims incurred as a participant prior to separation may be reimbursed, up to the amount in the account at the time of separation.
 
GROUP TERM LIFE INSURANCE
 
The separated employee may continue, at his/her cost, all the term life insurance (Company paid and additional employee paid) that was carried as an active employee for up to 3 months after separation due to layoff.  Current premium is $.22 per $1,000 coverage, per month. The full 3-month premium must be paid in advance. Contact Employee Benefits at 517-788-0826 for additional information. The employee has 31 days to convert to an individual life insurance policy after the group term life insurance terminates.  Regardless of whether or not coverage is continued, valid claims that occur within 31 days of termination of insurance will be paid. 
 
DEPENDENTS TERM LIFE INSURANCE
 
Coverage terminates immediately on separation.  Covered family members may convert to an individual policy within 31 days. Valid claims incurred within the conversion period will be paid.
 
LONG-TERM CARE INSURANCE
 
Payroll deductions for premiums cease on separation.  The separated employee may contact John Hancock or CNA to continue coverage through direct billing.
 
TRAVEL ACCIDENT INSURANCE
 
Coverage terminates immediately on separation. No conversion available. 
 
RETIREE BENEFITS
 
Retiree Health Care and Retiree Life Insurance benefits are dependent on eligibility for these plans and require an employee’s retirement from the Company.  Separated employees do not receive vested rights under these benefits and no future benefits are payable.

 

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