Fun Situation of the Day

[Full Throttle]

The employer (my group client) switches his bank account without letting the carrier know, the premium bounces. The carrier sends him a letter to pay up. I help him straighten it out, all he needs to do is sign a form and send it in. No such luck, it doesn't get done after two reminders.

Coverage terminates retroactively back to Feb. 1st. The carrier says we can appeal the decision and send in the back due premium, however, they deny the appeal as of last week. Now the employees have been without coverage since Feb. 1 (now near the end of March), however, no one has made any claims. We apply for a new plan at the last minute for an April 1 effective date (still within the 63 day mark for pre-ex's).

All fine and dandy, or so we thought. One employee is out on COBRA, believes he has coverage. He goes and gets a $4,000 knee surgery completed. For obvious reasons, he's upset and now starts to talk about bringing an attorney into the picture.

Thank God we have a risk pool option to put him into retroactively that will cover the surgery, however, he still looses the COBRA subsidy. It's been a fun day!

 

[Norwayguy]

All fine and dandy, or so we thought. One employee is out on COBRA, believes he has coverage. He goes and gets a $4,000 knee surgery completed. For obvious reasons, he's upset and now starts to talk about bringing an attorney into the picture.

Thank God we have a risk pool option to put him into retroactively that will cover the surgery, however, he still looses the COBRA subsidy. It's been a fun day!

Boy you can tell I don't do group but I have a question in regard to this ex-employee on Cobra...can the carrier cancel his coverage since he should have been paying a premium on that coverage or was the money going to the former employer? I don't handle U65 coverage here in Maine but with all the changes coming down the pike maybe I should learn some more.

 

[Full Throttle]

Boy you can tell I don't do group but I have a question in regard to this ex-employee on Cobra...can the carrier cancel his coverage since he should have been paying a premium on that coverage or was the money going to the former employer?

The employee was sending the premium payment to the employer. The employer never cashed the check while the dispute was attempted to be resolved. Since there was no plan as of Feb. 1st, the COBRA disappeared with it.

 

[bluemarlin08]

Know of a similar situation, is client a trucking firm?

 

[Full Throttle]

Know of a similar situation, is client a trucking firm?

No, different industry.

 

[ABC]

The employee was sending the premium payment to the employer. The employer never cashed the check while the dispute was attempted to be resolved. Since there was no plan as of Feb. 1st, the COBRA disappeared with it.

Since the check was never cashed I think the employer is good to go from any damages.
Technically the plan was dropped so the Cobra person is SOL.

Here is the really interesting part of your situation.

IF the employer goes over 60+ days to put a group health plan back in place does he have to carry the cobra person?


I can relate to your situation many times over.
I had a group go bust and the one of the employees had $28,000 surgery that was not covered. When they pre certified the surgery it showed a health plan in place but the group was in the grace period.

I have had other groups go under and then the employees don't realize at that they will be pre x on the next group plan they get on.

It can be a mess because its not the employees fault especially when the business is still collecting contributions from the employee.

 

[David C]

I like life insurance.

Are they dead? I'll bring a check in a week.

 

[Full Throttle]

Here is the really interesting part of your situation.

IF the employer goes over 60+ days to put a group health plan back in place does he have to carry the cobra person?

I don't know the right answer. Orignial plan termed Feb. 1, new plan will start April 1. That's 59 days inbetween. Either way, the employee wouldn't have coveage for his claim within those 59 days. Also, I wonder how that would work for the subsidy if eligible.

David C, I agree, life insurance is simpler!