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COBRA Effective Date
Benefits & Compensation
COBRA Effective Date
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
I just found out that we have an employee who was terminated on August 29th. Typically medical coverage terminates at the end of the month an they were last employed and we offer COBRA effective the f
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Forums » Topic Forums » Benefits & Compensation » COBRA Effective Date
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COBRA Effective Date
posted at 9/14/2011 4:18 AM EDT
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Posts: 16
First: 7/26/2007 Last: 9/14/2011 |
I just found out that we have an employee who was terminated on August 29th. Typically medical coverage terminates at the end of the month an they were last employed and we offer COBRA effective the first of the following month. Since they were notified of their COBRA rights at termination do I need to extend their regular benefits through September and offer COBRA effective October 1st? |
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COBRA Effective Date
posted at 9/14/2011 4:48 AM EDT
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Posts: 16
First: 7/26/2007 Last: 9/14/2011 |
Sorry let me clarify, they were NOT notified of their COBRA rights at termination. I am just sending the information now.
I just found out that we have an employee who was terminated on August 29th. Typically medical coverage terminates at the end of the month an they were last employed and we offer COBRA effective the first of the following month. So we would terminate their coverage August 31st and offer them COBRA effective September 1st. Since they were not notified of their COBRA rights at termination and I am just sending the information now, do I need to extend their regular benefits through September and offer COBRA effective October 1st? |
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COBRA Effective Date
posted at 9/14/2011 9:00 AM EDT
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Posts: 2442
First: 2/12/2000 Last: 9/14/2011 |
If the employee was actually notified and told they were terminated then the coverage should end effective August 31st.
I would overnight the Cobra offering and make sure you give them the full period to make a decision effective from the date they receive the notice. Very few people actually accept COBRA due to the cost unless they have someone who's medical costs will be higher than the full premiums they will now have to pay. In other words, adverse selection. |
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Re: COBRA Effective Date
posted at 9/20/2011 6:20 PM EDT
on Workforce Management
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Posts: 1
First: 9/20/2011 Last: 9/20/2011 |
Terminated employees have 60 days from the date of the letter or qualifying event (whichever is the later) to elect COBRA coverage. They have 45 days from the date they elect COBRA to make their first payment. You have 14 days from the qualifying event (or when you are notified) to send them the letter. |
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Re: COBRA Effective Date
posted at 9/22/2011 7:19 AM EDT
on Workforce Management
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Posts: 148
First: 9/20/2011 Last: 12/12/2012 |
In Response to Re: COBRA Effective Date: Please refresh my recollection. Since there can be as long as 44 + 45 days or basically three months till you have both the election and payment, what is the protocol regarding claims incurred during this period? Are you within your rights to not pay claims until you have monies in hand? Once they make the election to continue must you process claims incurred? If you pay claims and they do not pay the premiums can you recover from both the provider and the claimant? |
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Re: COBRA Effective Date
posted at 9/22/2011 7:21 AM EDT
on Workforce Management
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Posts: 148
First: 9/20/2011 Last: 12/12/2012 |
Please refresh my recollection. Since there can be as long as 44 + 45 days or basically three months till you have both the election and payment, what is the protocol regarding claims incurred during this period? Are you within your rights to not pay claims until you have monies in hand? Once they make the election to continue must you process claims incurred? If you pay claims and they do not pay the premiums can you recover from both the provider and the claimant? |
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Re: COBRA Effective Date
posted at 9/22/2011 8:46 AM EDT
on Workforce Management
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Posts: 1
First: 9/22/2011 Last: 9/22/2011 |
You're well within the time to notify the former employee about his COBRA rights. You have 30 days to notify your plan administrator, and, once notified, they have 14 days to send the election notice. If you administer your COBRA yourself, you have 44 days to send the notice. The election timeframes mentioned above are correct. Continuants have 60 calendar days to make an election; once coverage has been elected, they have 45 days to pay for it. For more information, see the DOL's FAQs, and more specifically (from Q8) An Employer's Guide to Group Health Continuation Coverage Under COBRA - The Consolidated Omnibus Budget Reconciliation Act of 1986. |
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