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Over Age Dependent-COBRA


Guest Pecos

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The plan has the age maximum on dependent children at 25 (unless disabled). I found a dependent child over 25 that is not disabled on our plan. The child is 26 1/2 now. (no claims have been paid after age 25 by insurance company)

What is the plan obligation?

1) If the employee did not voluntarily remove the dependent from his/her coverage (did not notify us), are we obligated to send COBRA now? I wasn't sure if we were obligated, however we knew the child's date of birth.

2) If question 1 is yes: Is the employee responsible (if they decide to elect COBRA) for paying premiums retro from when the child was no longer covered up to now?

3) Can I remove an ineligible dependent with out the employees signature?

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1. It is always the obligation of the employee or dependent to advise of a dependent ceasing to be eligible. Nothing says that just because you have records somewhere within the company with the dependent’s birthdate, the obligation switches to the employer/plan administrator.

2. If there is any portion of the COBRA period remaining from the time the dependent became ineligible (probably not if s/he’s now 26-1/2, but not clear exactly when plan coverage would have been lost), I’d send the COBRA notice; otherwise, no.

3. Per the regs, if COBRA is elected, payment must be retro to the time coverage was lost (a rare recognition of the kind of manipulation that otherwise might occur). Payment may be made by the employee or the dependent.

4. Because the dependent is ineligible, you do not need the employee’s signature to remove the dependent.

5. If claims had been paid in the interim and a COBRA election can no longer be made, the employer would be within its rights to pursue reimbursement of the amounts paid on behalf of the dependent. Because this can often be a relatively fruitless exercise, it may be a good idea to perform periodic audits, including requiring proof of dependent status, to weed out ineligible dependents.

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Guest SHaddon

A couple of other things to consider are whether or not you sent an initial COBRA notice to the employee. This is the notice that advises the employee that he/she is responsible for advising you of the ineligibility of dependents, divorce, etc. If this was not sent, you may have a problem.

Secondly, if it turns out you decide to send a COBRA notice and allow the dependent to elect retroactively and your coverage is through a fully insured plan, the carrier may refuse to add the dependent and you will be forced to "self-insure' the dependent for up to the full 36 months allowed for this type of event (overage dependent).

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This is very good news, we do provide COBRA Initial letters to all of the employees when they are hired. We can even reference that COBRA letter in the explanation to the employees while we are removing the over age dependent. We will go ahead and provide them with the option for COBRA retro back to the date the dependent turned 25 (most of them are still in the 36 month period). This way we have a record that COBRA was still submitted to them.. thanks again....

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