- 1,926
If an employee is part of a very large group and quits, and is uninsurable, can he qualify for COBRA?
COBRA? What the...
- Thread starter TonyC
- Start date
- 4,132
dave,
"I don't think that this is correct." A group not subject to either a state mini-COBRA or federal COBRA requirement would not be allowed by the insurance carrier to continue coverage on non-active (off payroll) employees. This would seriously skew that risk of the group. "The only way this could be done would be to list the beneficiary as still active employee which would constitute insurance fraud."
Nope.
"I believe a group under 20 would only be allowed to offer continuation coverage if approved by the health insurance carrier (excepting, of course, mini-COBRA)."
the carrier has no say as long as the group meets the cobra definition. They have to offer cobra continuation if the group meets the cobra eligible definition.
Now, onto the basics since there is some confusion.....
1 - groups with 20 or more employees for at least 1/2 or the previous calendar year are required to offer continuation under federal COBRA.
The counting for employees includes both full-time employees (30+ hours per week) and part-time employees counted fractionally (i.e., 3 10-hour per week employees constitute 1 30-hour per week employee and count as 1 employee)
The federal government does NOT recognize any group under 20 employees, period. Any group under 20 employees may fall under a state law, but is not subject to federal COBRA laws. In addition, 20+ person groups are required to be primary insurance with Medicare as secondary. Under 20, Medicare is primary and private group is secondary.
Dave, a group must offer cobra IF they meet the definition of at work employees above. The definition does not apply to who is or how many are currently on the plan. Trust me, I have several groups that don't have 20 employees "insured" but MUST offer COBRA contiunation. If not, don't you think the insurance carriers would have pinned my ears back by now?
"2 - Groups under 20 employees are exempt from federal COBRA laws and are not required to offer COBRA continuation. Many states have enacted mini-COBRA programs that mirror federal COBRA for groups under 20. Each state determines the minimum group size. Most states are 2-19 however Ohio is 10-19 and does not recognize, even on a state level, groups 2-9 for continuation purposes."
doesn't apply where I do business, but I'll take your word for it.
www.dol.gov/ebsa/pdf/cobraemployer.pdf
Here is the department of labor's booklet.
I will admit COBRA is a funny thing, everytime you look at it you can come away with a different answer to your question.
"I don't think that this is correct." A group not subject to either a state mini-COBRA or federal COBRA requirement would not be allowed by the insurance carrier to continue coverage on non-active (off payroll) employees. This would seriously skew that risk of the group. "The only way this could be done would be to list the beneficiary as still active employee which would constitute insurance fraud."
Nope.
"I believe a group under 20 would only be allowed to offer continuation coverage if approved by the health insurance carrier (excepting, of course, mini-COBRA)."
the carrier has no say as long as the group meets the cobra definition. They have to offer cobra continuation if the group meets the cobra eligible definition.
Now, onto the basics since there is some confusion.....
1 - groups with 20 or more employees for at least 1/2 or the previous calendar year are required to offer continuation under federal COBRA.
The counting for employees includes both full-time employees (30+ hours per week) and part-time employees counted fractionally (i.e., 3 10-hour per week employees constitute 1 30-hour per week employee and count as 1 employee)
The federal government does NOT recognize any group under 20 employees, period. Any group under 20 employees may fall under a state law, but is not subject to federal COBRA laws. In addition, 20+ person groups are required to be primary insurance with Medicare as secondary. Under 20, Medicare is primary and private group is secondary.
Dave, a group must offer cobra IF they meet the definition of at work employees above. The definition does not apply to who is or how many are currently on the plan. Trust me, I have several groups that don't have 20 employees "insured" but MUST offer COBRA contiunation. If not, don't you think the insurance carriers would have pinned my ears back by now?
"2 - Groups under 20 employees are exempt from federal COBRA laws and are not required to offer COBRA continuation. Many states have enacted mini-COBRA programs that mirror federal COBRA for groups under 20. Each state determines the minimum group size. Most states are 2-19 however Ohio is 10-19 and does not recognize, even on a state level, groups 2-9 for continuation purposes."
doesn't apply where I do business, but I'll take your word for it.
www.dol.gov/ebsa/pdf/cobraemployer.pdf
Here is the department of labor's booklet.
I will admit COBRA is a funny thing, everytime you look at it you can come away with a different answer to your question.
- 4,132
"If an employee is part of a very large group and quits, and is uninsurable, can he qualify for COBRA"
Yes, you don't have to qualify for cobra, it must be offered in most every case (some situations it doesn't) to an terminated employee. Failure to do so can come back and bite a business in the butt. Everyso often, my groups get letters from the State healthcare authority where they have provided treatment to a former employee. They always ask "did you offer Cobra? Can you verify the dates you did?"
Because if you can't guess, who gets fined and the former employee's hc bill? If you are going to work group, make sure you know they are documenting these things and holding onto the records. We've had to go back several years to prove, the former employee turned down cobra continuation. Of course what they told the state was "it was never offerred".
Yes, you don't have to qualify for cobra, it must be offered in most every case (some situations it doesn't) to an terminated employee. Failure to do so can come back and bite a business in the butt. Everyso often, my groups get letters from the State healthcare authority where they have provided treatment to a former employee. They always ask "did you offer Cobra? Can you verify the dates you did?"
Because if you can't guess, who gets fined and the former employee's hc bill? If you are going to work group, make sure you know they are documenting these things and holding onto the records. We've had to go back several years to prove, the former employee turned down cobra continuation. Of course what they told the state was "it was never offerred".
- 3,384
I think we are talking about two different things here.
A group must offer continuation if the group meets the definition of the requirement as I outlined above. Either the group meets the federal COBRA guideline (20+ employees 1/2 previous calendar year) or state mini-COBRA if smaller than the federal requirement but required under state law.
I am not sure how you arrive at how a group that is not required to offer continuation coverage (e.g., group of 4 in Ohio) can offer it. 85% of the time either federal or state continuation requirements will apply.
HOWEVER, in the event that neither apply (group of 4 in Ohio), the employer MAY NOT offer continuation on the group plan without the carrier's approval (which is never going to happen). Only active employees may participate in a group plan that is not subject to either federal or state continuation requirements. Again, to continue an employee in that situation would require either carrier approval or listing the terminated employee as an active employee for benefit purposes (which would constitute insurance fraud).
You missed my point, which is groups under 20 may or may not have a continuation option, depending on their state of domicile and group size. A 4 person group in Ohio (in my example) is neither eligible for federal COBRA or Ohio state mini-COBRA, thus any employee given a continuation option by that employer would most likely be in a fraud situation since carriers do not allow terminated employees to "pretend" to work there to stay on the plan.
It's either done under federal or state law, never at the discretion of the employer.
A group must offer continuation if the group meets the definition of the requirement as I outlined above. Either the group meets the federal COBRA guideline (20+ employees 1/2 previous calendar year) or state mini-COBRA if smaller than the federal requirement but required under state law.
I am not sure how you arrive at how a group that is not required to offer continuation coverage (e.g., group of 4 in Ohio) can offer it. 85% of the time either federal or state continuation requirements will apply.
HOWEVER, in the event that neither apply (group of 4 in Ohio), the employer MAY NOT offer continuation on the group plan without the carrier's approval (which is never going to happen). Only active employees may participate in a group plan that is not subject to either federal or state continuation requirements. Again, to continue an employee in that situation would require either carrier approval or listing the terminated employee as an active employee for benefit purposes (which would constitute insurance fraud).
You missed my point, which is groups under 20 may or may not have a continuation option, depending on their state of domicile and group size. A 4 person group in Ohio (in my example) is neither eligible for federal COBRA or Ohio state mini-COBRA, thus any employee given a continuation option by that employer would most likely be in a fraud situation since carriers do not allow terminated employees to "pretend" to work there to stay on the plan.
It's either done under federal or state law, never at the discretion of the employer.
- 4,132
"I am not sure how you arrive at how a group that is not required to offer continuation coverage (e.g., group of 4 in Ohio) can offer it"
never said this... slow down a sec... Cobra applies to number of active employees as per definition. The medical plan does not have to have 20 employees insured to have to offer Cobra. the employer just has to meet the definition of Cobra for their workforce.
So if you have an employer who employs 37 employees but only 7 qualify for medical coverage (full time) and an employee quits and leaves 6 active covered employees. The seventh employee who quit must be offered Cobra continuation.
It may be you that is confused I am only talking about groups that meet the Federal quidelines for Cobra. the micro/mini groups are state's rights issues and each is done differently. In WA, they offer something for non Cobra groups. But.... if a group qualifies as a Cobra group...Cobra applies, not states micro mini delux anything. Feds first, states second.
And you are right groups have to offer what the feds or states say applies.
I think you misunderstood my point, which is the most often confused issue about Cobra. That is does the cobra headcount apply to the work or to the benefits plan? It applies to the work. yes?
never said this... slow down a sec... Cobra applies to number of active employees as per definition. The medical plan does not have to have 20 employees insured to have to offer Cobra. the employer just has to meet the definition of Cobra for their workforce.
So if you have an employer who employs 37 employees but only 7 qualify for medical coverage (full time) and an employee quits and leaves 6 active covered employees. The seventh employee who quit must be offered Cobra continuation.
It may be you that is confused I am only talking about groups that meet the Federal quidelines for Cobra. the micro/mini groups are state's rights issues and each is done differently. In WA, they offer something for non Cobra groups. But.... if a group qualifies as a Cobra group...Cobra applies, not states micro mini delux anything. Feds first, states second.
And you are right groups have to offer what the feds or states say applies.
I think you misunderstood my point, which is the most often confused issue about Cobra. That is does the cobra headcount apply to the work or to the benefits plan? It applies to the work. yes?
- 3,384
Got it. I thought that you meant that a group of 5 employees could offer COBRA to a departing employee. So, yes a group of 25 with 5 on the health plan would be required to offer federal COBRA.
- 4,132
thanks.
gotta admit every time I look at that act... I see something different.
gotta admit every time I look at that act... I see something different.
- Staff
- #18
- 1,599
Expanded COBRA Continuation Coverage - Kaiser State Health Facts
This is a great state COBRA chart. As you can see, some states allow you to charge more than 102% for COBRA.
This is a great state COBRA chart. As you can see, some states allow you to charge more than 102% for COBRA.
- 7,790
Great chart, Sam. Thanks for the post.
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- 4,132
to clarify the chart. this applies to groups that don't meet the federal guidlines for Cobra. These are the Cobra-like plans for non Cobra groups.
If the group meets Feds COBRA, follow that.
It is a good chart though.
If the group meets Feds COBRA, follow that.
It is a good chart though.
