Our insurance carrier has just sent out student verification letters. The letter states that if the dependent is no longer a full-time student (fall quarter), that they will be [u][u]retroactively terminated from coverage back to July 1st and any claims that were processed after July 1st will be backed out and the dependent responsible for payment. Under this scenario, the student has to be given the right to elect COBRA. So the termination date is July 1st, but the notification date is October 1st (date required the student notifiy the carrier whether or not they are a full-time student). I am telling the insurance carrier that they have to keep the dependent covered until they are notified of the COBRA election. They are telliing me since it's the participant's responsibility to notify someone that their child will no longer be a full-time student, they are allowed to do this. My contention is that the term date would be Sept. 1, not July 1, the date school would have started. Any comments?

It depends on what your plan states. Our plan (self-insured) states that coverage terminates on your last day worked or last day of eligibility.

For our dependents, we require a full-time student certification each Spring and Fall semester. If a dependent is enrolled in the Spring semester it is usually assumed that they will be enrolled for the Fall semester unless they graduated. Usually if they quit at the end of the Spring semester their coverage is terminated on their last day of school. We have had an incident where a student could not enroll for this Fall semester because they were ill and in the hospital. Their insurance ended on the day the Fall semester would have started. If that had happened after Oct. 1, 2010, then Michelle's Law would have kicked in and they would have kept their coverage.

Where the student graduates or otherwise doesn't return to school in the Fall, but doesn't notify the plan, I'm trying to figure out what happens during the interim. Let's say they graduated May 31 so that coverage should have ended beginning June 1. If we only find out in October that the dependent is no longer a student, what happens if the dependent incurred a large medical expense in July? Does the dependent simply have to pay the retroactive COBRA premiums to June 1 so that they could be covered and their COBRA election period begins in October upon our discovery?

What I was told by a COBRA processing service was if the plan sponsor/administrator did the initial Cobra notification when the employee was hired or came into the plan, then it is the responsibility of participant to notify you when the dependent is no longer eligible (i.e. graduation date). If they fail to do that, then the plan sponsor/administrator has no duty to offer COBRA. My issue was where the student was intending to go back to school and for economic reasons could not and that decision wasn't made until mid-August.