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Termination of COBRA
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Termination of COBRA
Discuss employment-law issues such as family leave, overtime, disabilities law, harassment, immigration and termination.
Our company has been sold, and the current corporate headquarters is being dissolved. What makes it tricky is that we were bought by more than one entity, with some branches going to one new owner, so
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Forums » Topic Forums » Legal Forum » Termination of COBRA
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Termination of COBRA
posted at 6/30/1999 7:31 PM EDT
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Posts: 399
First: 6/21/1999 Last: 9/14/2005 |
Our company has been sold, and the current corporate headquarters is being dissolved. What makes it tricky is that we were bought by more than one entity, with some branches going to one new owner, some to another, one to a third, and one branch besides corporate being closed altogether. In addition to looking for a new job, I am trying to close down all the outstanding HR issues. Our health insurance company has told us that as long as there is one active body on the plan, they will continue to honor the COBRA but as soon as the last employee is terminated, COBRA is gone for everyone. Assuming the plan is still active upon our renewal date, they will most likely cancel at that time anyway for lack of participation. This is precisely what I expected and I understand it, but it leaves me with a problem. The new owners are accepting those COBRA'd former employees from branches they are buying; in other words, an employee formerly of the Dallas office is having their COBRA continued on the policy of the new owners of the Dallas branch, and so on. But this still leaves me with one former employee, now in her tenth month of COBRA, who was part of the corporate office which has not been bought by anyone. Her coverage, therefore, remains on the policy that will cancel when the last employee (most likely our CFO) is removed. I should mention that this woman has a history of litigation against anyone she can find to sue, as well as that she was fired for excessive absence (failure to return after FMLA leave); that she would almost certainly have been fired for poor performance if she had returned; that she is now on long term disability and has been on disability of one sort or another for fifteen months now; and that she traditionally pays her COBRA premiums on the 28th day of a 30 day grace period. For these reasons I cannot get anyone, including our employment lawyer, to be concerned.
What do I need to do? At this point we just don't know how long the policy could be active. It could be gone as soon as September; it could be there as long as February. (Her COBRA expires March 1, 2000.) How much notice do I need to give her? Should I tell her now, or wait till we know the date of cancellation? Should we help her find replacement coverage? (Employees who are being terminated are not getting such assistance, and they will only have COBRA until the plan is cancelled too.) All our lawyer can tell us is that she's entitled to the same notice anyone else gets. I understand that, but those of us who are working know that it's coming eventually. She does not. Sorry for the lengthy post, but any advice is appreciated. Matt? Jim? Carl? Anyone? |
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Termination of COBRA
posted at 7/1/1999 12:01 AM EDT
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Posts: 2217
First: 6/16/1999 Last: 12/13/2001 |
I guess I agree with your employment lawyer. Might you get sued? Sure. With a type-writer and a few dollars for the filing fee, anyone and sue anybody for anything. The fact of the matter is that you could probably terminate the plan right now (there is no requirement that an employer continue the plan, only that employees be offerred the right to continue in the plan). So, I do not see much of a claim here. But, then again, I do not know all of the facts. |
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Termination of COBRA
posted at 7/1/1999 1:04 AM EDT
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Posts: 399
First: 6/21/1999 Last: 9/14/2005 |
Thanks for your quick response. I guess my major concern was the fact that every time I asked, "What are we going to do about Mary Jones", I got as a response, "Oh, don't worry about her." Remembering how hard I had to push to keep her from being fired before her 12 weeks FMLA was up, I wasn't sure if I should be worried or not. Thanks for the reassurance! |
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