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ohio state mini cobra
Benefits & Compensation
ohio state mini cobra
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
We are about to lay off someone and we are going to give the person 2 weeks severance pay. We have under 20 employees but due to the state continuation law, we have to cover him under cobra. The owner
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ohio state mini cobra
posted at 4/29/2009 10:39 AM EDT
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Posts: 15
First: 11/14/2001 Last: 4/29/2009 |
We are about to lay off someone and we are going to give the person 2 weeks severance pay. We have under 20 employees but due to the state continuation law, we have to cover him under cobra. The owner wants me to calculate how much the employee will own on his 35% premium for all the months we have to cover him after the lay off and take the total amount out from the severance check.
I am not sure if we are allowed to do this legally? thanks. |
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ohio state mini cobra
posted at 4/29/2009 10:55 AM EDT
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Posts: 464
First: 6/30/2004 Last: 11/22/2010 |
Interesting - is the severance check required by a contract or company practice that dictates the amount?
If not, I would think you could just reduce the total by the amount of subsidy and call it good. Of course, that would mean you were not going to pursue for the subsidy amount. I am just opining here, not aware of any particular issue, other than those covered by my initial question, that would preclude you from just writing the check for less. |
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ohio state mini cobra
posted at 4/29/2009 11:11 AM EDT
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Posts: 15
First: 11/14/2001 Last: 4/29/2009 |
thanks for the reply. We don't make employees sign contract when we hire them and the severence pay is not in the company policy. The person is laid off due to lack of work and the owner usually will give people 2 weeks of severance pay to help them out.
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ohio state mini cobra
posted at 4/29/2009 12:44 PM EDT
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
I would say this is not legal. Who's to say this employee is going to take COBRA and for how long? He could have every intention of taking it, but receive a different job offer next week with immediate benefits. An employee has upwards of 60 days to decide whether or not to elect COBRA, so follow the guidelines and cut him his full check. |
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ohio state mini cobra
posted at 4/29/2009 4:46 PM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
I agree that this doesn't make any sense. This employee might not take COBRA at all and if he does and stops paying his 35% for the first 9 months and 102% thereafter, the employer can cancel benefits. In Texas, under the state version, there is no grace period for late payments. You might check to see if there is a grace period in your state continuation.
What is the employer worried about? That this person won't make their part of the payment? If so, the employer can just cancel the COBRA due to nonpayment. And unless severance is required under a contract or CBA, the employer doesn't have to pay it out at all. And I suspect 9 months of 35% of the health insurance premium will be much more than two weeks pay. And if the employer does deduct 9 months and then the employee drops out before that, is the employer going to refund the premiums that came out of the severance? If not, the employer may be shooting the company in the foot because the ex-employee may not get off COBRA because it is pre-paid even if they could. This is a bad idea for more than one reason. |
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ohio state mini cobra
posted at 4/30/2009 8:57 AM EDT
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Posts: 30
First: 1/29/2009 Last: 11/24/2009 |
How about letting the employee decide if they would rather have the premiums taken out or take the money? This person may be in good health and not want COBRA or they may not be able to afford the premiums with their other bills.
If they do elect COBRA and they want to pay it monthly and they don't, all you have to do is cancel it. OH doesn't require you to pay the premium if the EE can't, does it? I certainly hope not, as that may change my opinion. |
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