EXPLANATION OF USE FOR THE MODEL QUALIFIED BENEFICIARY NOTICE This memorandum is being provided to explain the use of the Model Qualified Beneficiary Notice which is attached hereto. By way of explanation, on May 26, 2004 the United States Department of Labor issued final rules specifying the required content and timing of notices required by the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Those final rules require that Qualified Beneficiaries provide notice to the plan if there is: (1) a divorce or legal separation, (2) if dependants cease to be eligible under the plan, (3) when a determination of disability or change in disability status has been made; and, (4) if there is a second qualifying event The attached Model Qualified Beneficiary Notice has been prepared by Blue Cross & Blue Shield of Mississippi as a courtesy to our customers and should be used by you as the employer or by your Plan Administrator. However, please understand that the attached Model Qualified Beneficiary Notice is intended to serve only as a guide to assist you in the development of your group’s Model Qualified Beneficiary Notice. Please remember, if your group is not subject to COBRA then you will not need to utilize this notice. Your Model Qualified Beneficiary Notice should include the name of the plan and the name, address and telephone number of the party responsible under the plan for administering COBRA benefits, in that connection, it will be necessary for the provided Model Qualified Beneficiary Notice to be altered to include that information. The Model Qualified Beneficiary Notice should be included in the plan package delivered to each employee for the employee’s use. This Model Qualified Beneficiary Notice should be deemed timely if it is received within 60 days of the later of (1) the date of the qualifying event, (2) the date of loss of coverage under the plan, (3) the date the qualified beneficiary receives notice of this obligation to furnish notice of a qualifying event and the procedures for providing that notice. Important Note – the use of this form is not required by the COBRA final rules, it is only recommended that the plan put into place “reasonable procedures” to aid the qualified beneficiary in this notice requirement. If no “reasonable procedures” are in place, a qualified beneficiary can provide notice in a number of ways, including orally. For this reason, Blue Cross & Blue Shield of Mississippi requires the use of this Qualified Beneficiary Notice. DISCLAIMER - Nothing contained, expressed, or implied in this Explanation of Use for the Model Qualified Beneficiary Notice or the Model Qualified Beneficiary Notice attached hereto is intended as, nor shall be construed or understood as, legal advice, guidance, or interpretation. No attorney-client relationship is established between Blue Cross & Blue Shield of Mississippi and you by reason of your use of this Explanation of Use for the Model Qualified Beneficiary Notice or the Model Qualified Beneficiary Notice attached hereto under any circumstances whatsoever. The Explanation of Use for the Model Qualified Beneficiary Notice and the Model Qualified Beneficiary Notice attached hereto are provided for general information purposes only. If you have questions about any law, statute, regulation, or requirement expressly or implicitly referenced by this Explanation of Use for the Model Qualified Beneficiary Notice or the Model Qualified Beneficiary Notice attached hereto, you should contact your own legal counsel. COBRA administration and notice requirements remain the sole responsibility of the employer or Plan Administrator and by the provision of this Explanation of Use for the Model Qualified Beneficiary Notice and the Model Qualified Beneficiary Notice attached hereto; Blue Cross & Blue Shield of Mississippi assumes none of that responsibility. BCBS 21200 BCBS 21200 MODEL COBRA QUALIFIED BENEFICIARY NOTICE Dear Plan Administrator: Pursuant to ERISA §606(a)(3); 29 C.F.R. §2590.606-3(a), qualified beneficiaries must provide notice to the plan: (1) if there is a divorce or legal separation, (2) if dependant(s) cease to satisfy the eligibility requirements under the plan, (3) when a determination of disability or change in beneficiary has been made by the Social Security Administration, and (4) if there is a second qualifying event. To comply with the above rule this form is utilized to provide notice to the Plan Administrator of any of the above events. Also, any relevant documentation including any Judgment of Divorce, Separate Maintenance Order or other Order of Legal Separation or Notice of Disability Determination should be provided with this Notice. The following event occurred on the _______ day of _________________________ 200______ [insert date and check appropriate box]: … Divorce … Determination of Disability … Legal Separation … Second Qualifying Event … Loss of dependent child status The above indicated event involves the following persons: [check appropriate box or boxes; names may be added]: … Employee or former employee … Spouse or former spouse … Dependent child(ren) covered under the Plan on the day before the event that caused the loss of coverage … Child who is losing coverage under the Plan because he or she is no longer a dependent under the Plan This notice is provided in accordance with reasonable procedures put in place by the plan pursuant to 29 C.F.R. §2590.606-3(b) for the provision of notice of (1) a divorce or legal separation, (2) dependants ceasing to satisfy the eligibility requirements under the plan, (3) a determination of disability or change in beneficiary made by the Social Security Administration, and (4) a second qualifying event. _____________________________________ _____________________________ Signature Date ______________________________________ _____________________________ Print Name Relationship to individual(s) listed above ______________________________________ _____________________________ Identification number ______________________________________ ______________________________________ ______________________________ Print Address Telephone number