A Notice of Termination of Coverage was included in all of the COBRA election packets sent to employees whose employment with the firm terminated during the month of October. If you did not see it, the notice is being posted here for your reference and also to serve as a reminder that CIGNA medical and dental benefits will terminate on November 30, 2008 for current employees, as well as all former employees who have elected COBRA continuation coverage.
It has been brought to the firm's attention that there is some confusion surrounding the language that "coverage may be continued for up to 18 months" included in the COBRA election letters sent by PayFlex, which appears to contradict the information given in the notice. This is the required regulatory language and under "normal" circumstances would be true. However, due to the termination of the firm's contract with CIGNA, no COBRA continuation coverage is available beyond November 30, 2008.
Some terminated participants have reported the following errors under the Plan Description column on the "Health Benefits Continuation Plan Enrollment Form" included with the COBRA election letters:
1) You were enrolled in CIGNA Dental coverage when your employment ended and your election letter includes HDHP instead of "CIGNA Dental Plan"
2) You were covered by the VSP vision plan upon termination and it is not included on the form
To obtain the correct cost information, please contact Cheryl Vance at (415) 772-6493 and include it with your enrollment form if you wish to elect COBRA continuation coverage under either of the plans. Please remember that all CIGNA coverage will terminate on November 30, 2008.
To clarify yesterday's memo about medical coverage, if your separation date from Heller Ehrman was during the month of October your coverage will end on October 31, 2008. You will be receiving an election packet from the firm's COBRA administrator, PayFlex, in the next week. If you wish to elect COBRA continuation coverage you must return the election form included in the packet. Once PayFlex receives your election form, your coverage will be reinstated retroactive to November 1, 2008. For those on the CIGNA plans, please note that your COBRA election will only be in effect for one month through November 30, 2008, at which time the CIGNA plans will terminate for ALL participants. No COBRA coverage will be available through CIGNA after November 30. Even if you decide to elect COBRA continuation coverage through CIGNA, you should begin exploring alternative coverage to be in effect on December 1, 2008.
Health Insurance
Coverage provided under our group health insurance plans with Kaiser and CIGNA remains in effect, including COBRA coverage available through those plans. Over the past month we have engaged in extensive negotiations with CIGNA that were complicated by the fact that the firm owes CIGNA a substantial amount of money. Those negotiations resulted in an agreement -- reached earlier this afternoon -- whereby CIGNA consented to continue health insurance coverage in force for all plan participants but only through November 30, 2008. We do not expect CIGNA to agree to continued coverage on a group basis beyond that date. Termination of the CIGNA plan effective November 30, 2008 will result in termination of COBRA coverage for CIGNA plan participants effective on that date, as well as termination of coverage for the spouses/partners of retired shareholders insured through CIGNA effective on that date.
If you are insured under the CIGNA group health insurance plan you will receive a separate formal communication from the firm announcing the termination of the CIGNA coverage. That communication will also outline health insurance options available to you, including options potentially available to you for converting your CIGNA coverage to an individual policy, as well as options available to you under HIPAA (the Health Insurance Portability and Accountability Act of 1996).
The Kaiser group health insurance plan remains in force. We are not able to predict at this time whether or when that plan might terminate, but under the plan Kaiser is obligated to provide the firm with at least 30 days notice of its intent to terminate coverage. We will promptly advise all Kaiser participants in the event we receive such termination notice.
Retirement Plans
We are pleased to report that the work required to "unfreeze" the Heller Ehrman LLP 401(k) Retirement Savings and Profit Sharing Plan has been completed. You will be able to take a distribution from the Plan beginning Friday, October 31. With the exception of a small Vanguard record-keeping fee ($3.75), no costs or fees associated with the Plan have been assessed against participant accounts.
All participants are required to take a distribution by November 30. If you wish to pay off all or part of a loan before taking a distribution, please visit www.hellerehrman.com for the loan payoff form and instructions. You will receive a more formal announcement of this information from the Plan Administrator.