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A comedy of errors
Benefits & Compensation
A comedy of errors
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Here is the scenario:
An employee gave her notice in December. She agreed to stay on until her replacement was hired, and began working about 10 hours a week beginning on December 30.
Her superv
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Forums » Topic Forums » Benefits & Compensation » A comedy of errors
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A comedy of errors
posted at 7/15/2010 11:46 AM EDT
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Posts: 45
First: 12/30/2005 Last: 9/14/2011 |
Here is the scenario:
An employee gave her notice in December. She agreed to stay on until her replacement was hired, and began working about 10 hours a week beginning on December 30. Her supervisor did not notify the local HR office of the employee's change in status until February 2nd. The local HR office did not notify the corporate office until March 1st. The corporate Records Department received the change form and processed the employee's change in status on March 1st. The HRIS automatically termed the employee's benefits effective December 31. The March 5 data feeds generated a COBRA QE notice and informed the carriers of the benefit cancellation. The employee had medical procedures that were originally approved and then subsequently denied due to lack of coverage. She is now angry because her medical bills are going to collection and she has notified corporate upper management of this issue. She states that she did not know she would lose her benefits when she began working 10 hours a week. She says that neither her supervisor nor HR informed her of that. What is the employer's legal obligation to the employee at this point, and what is the potential liability? The supervisor and local HR department goofed by not processing the paperwork timely. She was offered COBRA, albeit late, which she declined. How would you make it right for the employee, if at all? |
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A comedy of errors
posted at 7/16/2010 5:19 AM EDT
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
Are you self-insured or fully-insured for medical insurance? If you're self-insured, it's an easy fix. Keep her on the plan until March 1 and then follow COBRA procedures. If you're fully-insured, it becomes a little more complicated since you need the insurance carrier to partner with you on this. Nonethless, as long as you have a good relationship with your broker and insurance carrier, you should be able to work it out.
As for your potential liability, there's a lot. If you stick with the December 31 termination date, it's too late for her to elect COBRA, therefore, she can sue the company on that front. If the company agrees to pay any medical claims between 1/1/10 - 6/30/11, who knows what you're getting into. Is she already employed somewhere else with medical benefits? If so, that would help out a lot since you would know what the value of the medical claims were between 1/1/10 and whenever she jumped on her new insurance. |
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A comedy of errors
posted at 7/16/2010 9:31 AM EDT
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Posts: 45
First: 12/30/2005 Last: 9/14/2011 |
Thank you for the reply.
We are fully-insured. We do have a good relationship with the carrier, so it wouldn't be a problem reinstating her coverage. Management is looking at either paying the claims or reinstating coverage. She did share with us some information on the claims (DOS and amounts). Reinstating coverage would definitely be less costly to the company. She is employed somewhere else, but does not yet have medical benefits. |
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A comedy of errors
posted at 7/16/2010 4:41 PM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
I would reinstate since it was the company's failure and then I would re-vamp the process of notification between levels.
Although I do think this employee is taking advantage of your mistake, she should have been notified that her benefits would cease. If you think that she was, then that is a different scenario...but it sounds to me like someone at a specific location needs to be trained on hiring/terms/change in employment status. |
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