Employment Law/Medical Benefits at Termination & COBRA
QUESTION: I was terminated from my employer 12/10/12. My termination letter stated my medical benefits along with dependents would be terminated at the end of 12/10/12. I called my HR dept. 12/12 asking if my benefits were extended until the end of the month since I received severance until then and was told yes I had medical benefits until the end of the month. I was glad since I needed to refill some mail order prescriptions, get an eye exam and my wife had some unfinished dental work to get completed. I called my eye doctor 12/28 to schedule an appointment and was told my insurance was cancelled 12/11. I called HR back 12/28 to find out what was up and they said all benefits were canceled in error but have been reinstated until the end of the month. They said should there be any problems with insurance to have it resubmitted. I received my COBRA continuation letter 12/31 which was dated 12/25, past the 14 days period for notification. The COBRA letter stated all benefits were terminated 12/11. In my opinion this was handled very sloppy, do I have any recourse? I would also like to help protect other employees from this happening to them and maybe a fine to my past employer might wake them up.
I agree your situation was poorly handled, but it was not in violation of the COBRA notice requlations issued by the U.S. Department of Labor. I have assumed that your former employer maintains a single-employer group health plan administered by a third party such as a health insurance company, which is the most frequent situation. The regulations also have specific provisions for multi-employer plans and for plans for which the employer is also the plan administrator.
29 CFR 2590.606.2(b)(1), in the case of a plan which provides that the notice period begins on the date of loss of coverage, requires the employer to notify the administrator of the group health plan of the occurrence of the COBRA qualifying event (in this case, the loss of coverage due to termination of employment) within 30 days after that event. Section 2590.606.4 then provides that the plan administrator must notify the beneficiary (i.e., you) of the right to elect COBRA continuation coverage within 14 days after it receives the required notice from the employer.
So, it appears the notice you received was well within the regulatory time limits, again assuming the employer has a single-employer plan with a third party administrator. I would note that the notice in your case was also well within the time limit for a plan which is both maintained and administered by the employer.
If your former employer maintains a multi-employer group health plan, please post a follow up question and I will take another look at your situation. If that is the case, please also let me know what the plan itself says about the time period for notice of the right to elect COBRA coverage.
If you would like to review the applicable regulations yourself, here is a link to the "final rule" issued in 2003, on the U.S. DOL website:
I hope this is helpful.
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QUESTION: Wow! Thanks for the quick reply Frank. I don't know if my employer maintains a multi-employer plan. ? It's a basic group health plan that is self funded by the employer but has United Heath care administering claims. ADP collects premiums. Thanks Frank.
You're welcome...first question of the New Year!
I may have been a bit unfair asking you what kind of plan the company has...in any case, multi-employer plans are not all that common, and the answer is probably the same, just under a different part of the regs. I hope you're able to get everything resolved and find a new job quickly!