Subject: Newsletter: Sample Notice to COBRA Continuees; Due by 11/1/96

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Issue #3. In the news:

........ SAMPLE COBRA NOTICE - MUST BE PROVIDED BY NOV. 1 ...

Recent federal legislation requires group health plans
regulated by COBRA to provide a special notice to any
persons actually on COBRA continuation coverage.  The
deadline is November 1.

This requirement generally falls on employers, not on
the insurance companies providing the health insurance.

BenefitsLink is pleased to publish the following sample
notice, drafted by Schiff Hardin & Waite of Chicago.
*Thanks* to Mike Melbinger, an attorney with that law
firm <mmelbinger@schiffhardin.com>

-------------------

Notice to Qualified Beneficiaries of Changes to COBRA
Requirements Made by the Health Insurance Portability
and Accountability Act of 1996

October __, 1996

    On August 21, 1996, the President signed into law
the Health Insurance Portability and Accountability Act
of 1996 ("HIPAA").  HIPAA revised the health coverage
continuation requirements under the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA").  HIPAA also
requires that the Plan notify each qualified beneficiary
who has elected continuation coverage under COBRA of the
changes to COBRA by HIPAA. The Company's records
indicate that you have elected to continue coverage
under the Company's Group Health Plan.   These changes
are summarized below.

    1.  COBRA generally provides that qualified
beneficiaries are entitled to continue coverage for up
to 18 months after a termination or reduction in hours
of employment, subject to timely premium payments.  This
18-month period could be extended for an additional 11
months (for a total coverage continuation period of up
to 29 months from the initial qualifying event) if an
individual was determined under the Social Security Act
to have been disabled at the time of the qualifying
event, and if he or she notified the plan administrator
of such disability determination within 60 days of the
determination and before the end of the original
18-month period.

    Beginning in 1997, the extended maximum COBRA period
of 29 months will apply if a qualified beneficiary is
determined to be disabled under the Social Security Act
"at any time during the first 60 days of continuation
coverage."  The disabled individual can be the former
employee or any other qualified beneficiary.  If the
disabled individual is the former employee, the 29 month
period would apply to all qualified beneficiaries.
Affected individuals still must comply with the notice
requirement, and COBRA entitlement would end when the
qualified beneficiary is no longer disabled.

    2.  A child that is born to or placed for adoption
with a former employee during a period of COBRA coverage
may be added to coverage as a qualified beneficiary, by
giving proper notice to the plan administrator, in
accordance with the terms of the plan.

The foregoing changes are effective January 1, 1997,
regardless of whether the qualifying event occurred
before, on, or after that date.

    Under COBRA, your right to continue coverage
terminates if you become covered by another employer's
group health plan that does not limit or exclude
coverage for your preexisting conditions. If you become
covered by another group health plan and that plan
contains a preexisting condition limitation that affects
you, your COBRA continuation coverage cannot be
terminated.  HIPAA limits the extent to which employers'
group health plans can impose preexisting condition
exclusions effective for plan years beginning after June
30, 1997. Thus, if another plan's preexisting exclusion
cannot apply to you because of HIPAA, your entitlement
to COBRA continuation coverage under the Company's Group
Health Plan may terminate.

    If you have any questions about these changes,
please contact the Plan Administrator.

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