Cobra requirements

Nan

When an employee is terminated COBRA is offered if they had health insurance. If this terminated employee is moving out of state does the terminating company have to right to say they don't have to offer Cobra to the terminated employee?

Cinderella

I believe you still are required to offer it (send the notifications, etc.). I would consult with the carrier in regards to out of area situations.
Cinderella

Nan

Thanks for your input. All the answers have been helpful from everyone.

AJ SPHR

I don't understand why you think you don't have to offer COBRA if someone is moving out of state. We always are obligated to offer continued coverage through COBRA when an employee is no longer eligible for coverage. The only time you may not have to is if the person left due to gross misconduct, but that's been very narrowly defined and mostly the DOL and courts rule in favor of the ex-employee.

Cinderella

I think the question is in regards to cases where some medical plans are only available in certain areas -- at least that's how I was reading it.

I agree, you always have to offer it per the law (except for gr. misconduct) but am not sure if they will have the same premiums as if they were in area or what to do if the carrier doesn't offer services in the ex ee's new area.

Cinderella

irenesmsaclaims

The 1987 proposed regulations provide that qualified beneficiaries moving outside the area served by a region-specific plan must be given the right to obtain other coverage from the employer maintaining the region-specific plan. The rule conditions the right to other coverage on the employer having employees in the area to which the qualified beneficiary is moving. This proposed rule unduly limits the application of the rule in the case of an employer or employee organization that could provide other coverage to the qualified beneficiary without having to establish a new plan or enter into a new group insurance contract even though the employer did not have employees or the employee organization did not have members in the area that the qualified beneficiary was moving to. This might be the case, for example, if the employer or employee organization maintained a self- insured plan or maintained an insured plan through an insurance company licensed to provide that same product in the area that the qualified beneficiary was moving to. The final regulations eliminate the condition that an employer have employees in the area to which the qualified beneficiary is moving and instead require that coverage be made available to the qualified beneficiary if the employer or employee organization would be able to provide coverage to the qualified beneficiary under one of its existing plans. Generally the coverage that must be made available is that made available to the similarly situated nonCOBRA beneficiaries. If, however, the coverage made available to the similarly situated nonCOBRA beneficiaries cannot be made available in the area that the qualified beneficiary is moving to, then the coverage that must be made available is coverage provided to other employees.

Cinderella

Aha! Very good. Thank you Irenesmsaclaims!
Cinderella

marc

Wow, I got dizzy just trying to read this, great information and worth the re-reading to get it. In the end, do as Pork suggests and protect yourself by offering the coverage and letting the ex-EE decide.

Pork

"WHOA" after the above do I dare add, yes I do, "Employer must offer" the x-ee can either pay for coverage and, benefit thereof, because he/she can get to the providers or the x-ee can pay for coverage and not be able to get to the providers, in a self-insured plan. Now, if Blue Cross Blue Shield is the carrier and the benefits are available through their affiliated providers in a new location it could be beneficial. All of which is to say: offer and let the x-ee make the determination. YOUR OFFER SATISFIES THE LAW AND PROTECTS THE COMPANY FROM FAILURE TO EVEN OFFER.

PORK

Beave

Pork is exactly right. You would be foolish to not offer it. Offer and let them decide.