Employer forgot to cancel coverage after lay off

[Marc Snyder]

Received a call from a friend of mine today. Seems his daughter has been getting very costly injections which were covered under her husband's plan.Then her husband was laid off from his job. His employer neglected to cancel his coverage and it was her that noticed that a prescription was paid by the insurance. She called her husband's former employer and they said "it should have been cancelled". They received a bill from the Insurance company for $24,000 for 2 injections! Is there any thing they can do? The employer is in IN but they live in MI.

 

[leevena]

More than likely continuation of coverage is available. Insured would have need notified.

 

[Marc Snyder]

So, you are saying that there may still be an opportunity for them to pay for a continuation of coverage? How would I go about checking on this?

 

[leevena]

So, you are saying that there may still be an opportunity for them to pay for a continuation of coverage? How would I go about checking on this?

Continuation info is provided to insureds upon termination of coverage. If they do not have it, go to employer and ask.

Also, google continuation of coverage, COBRA, and read/learn about it.

 

[ICACharleston]

If I remember correctly, the employer is REQUIRED to give timely notification of COBRA rights to employees. The penalties for not complying are severe. As the previous poster said, look it up and have the former employee contact the appropriate agency and/or HR.

 

[Dave020]

How long does an employer have to notify you of Cobra?

Employer has 30 days from the loss of coverage to notify the plan administrator.* Plan Administrator has 14 days to provide a COBRA election notice to the former employee/qualified beneficiary. Qualified beneficiary has 60 days from the date of the notification to make an election to continue enrollment in the plan(s).

COBRA Election Compliance Timelines - myCobraPlan | COBRA Administration Made Easy

 

[Marc Snyder]

I have no reason to believe that the notifications were not made as required but someone dropped the ball on cancelling the coverage when they were supposed to. When I present a prescription at a pharmacy they check the computer to make sure my purchase is covered. When I go to the doctor or hospital it is checked. why should this family have to take out a second mortgage for the company's negligence? One could argue that the patient should have known sooner but it just seems harsh that they bear ALL of the costs. Unless of course if they can pay the premiums under COBRA after the fact.

 

[leevena]

Marc Snyder, it is highly unlikely that you will get a definitive answer here, there are too many variables/facts to consider and a forum such as this does not lend itself for a situation such as this.

From your most recent post you state that you believe notification of continuation coverage was made. Most companies provide COBRA information to the employee at time of employment. In addition, COBRA information is provided in plan documents that are provided to enrolled persons, often multiple times. At separation from employment, employers usually provide a packet of information with a variety of information, including continuation of coverage. When terminating coverage from the plan, the employer is required to provide a formal COBRA notification. As you can see from Dave020 reply above, the ex-employee has a minimum of 90 days to enroll.

Is the ex-employee stating that none of this occurred? If so they should retain counsel.

 

[junkman]

It doesn't really matter that the employer forgot to cancel coverage. What matters is whether coverage is in-force (or can be made to be in-force - by you).

The employer is subject to COBRA laws if it has 20 or more full or part time employees. (look up the exact wording for yourself) There are specific notices that the employer is required to send within a certain time frame. If the notice was not sent, they are required to send it now and your daughter can elect coverage and pay premiums retro to her coverage term date. I've seen some administrators who didn't do their job then manufactured documentation so be aware. I've also seen employees who didn't respond then got sick and claimed that the notice was never sent. It cuts both ways.

Exactly when did she term employment? Exactly when did coverage end? Is the employer subject to COBRA? If not, state continuation is an option but varies by state. Did the employer send the required notices (perhaps not since they didn't term coverage).

Daughter has 30 days from loss of coverage to enroll in whatever ACA plan is available.

You need to immediately start documenting communication with the employer but do it in such a way that it doesn't make them wary. You are either in or out of your election period depending on what was done or not done.

Dealing with the provider is another issue. I wouldn't pay anything until I knew what the insurance situation is. Remember that debt collectors are not your friend and will lie - even if the collector is a provider's office. Find out the situation then decide how to proceed.

 

[Charlies McGee]

I have this same issue.

My employment ended. And I was given a severance package from June to August. August came and went and I thought it the insurance was over. I stopped using it.

This was 2019. In 2020 I got a new card and I called BCBS and they said it is paid in full and in good standing. I said okay.

I ended up using it because it was in my wallet and was good insurance.

I have sporadic bills times I used it, since I had other insurance for all claims except for 1 month.

Now they came back to and said they made a mistake (admitted in email) and didn't cancel my insurance. They said I can choose Cobra now or pay the bills. They said they spoke to BCBS and said it would be 2k. I checked my insurance and BCBS paid out 9k total during the the times.

I didn't accept anything in my communications. I told them I do not accept ownership of their failure to close their accounts. Therefore they can do whatever they want but do ot consider me saying yes, I will take responsibility for your failure. This is also stated in the email.

Who is liable here? The company (who has more money then anyone, and sells your kids SATs so kinda annoying nickle and diming me), the insurance company for paying it out. Or me, I did call and it was in good standing and fully paid. I even asked who is paying this, they said it is paid that is all they know. I am sure the conversation is recorded for quality assruance purposes.

Really not sure if I need a lawyer here?



What happened to you Marc?