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Impact of a More Generous COBRA Election Period


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If an employer wants to offer an election period more generous than the 60 days that is minimally required, does it impact the end date for the maximum continuation coverage period?

Taken to an extreme, if the employer allows an employee to elect continuation coverage up until the end of the maximum coverage period (let's say 18 months in a given case), is it correct to say that the maximum coverage period is still 18 months after the qualifying event, and that while the employer is on the hook for claims arising any time during that 18 month period if an employee so elects, an employee electing on the last day doesn't have any coverage beyond the date of the election? 

Does anyone see any other impacts lurking in that scenario?

 

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Before turning to the questions you ask, an employer might want advice about how a more-generous election period relates to each insurance contract, whether health or stop-loss casualty, involved.

For a stop-loss insurance contract regarding a group health plan that provides its benefit without health insurance (and instead by the employer’s self-funding), an election period more generous than public law requires might breach an obligation of the insured employer, breach a condition for the insurer’s obligation, or otherwise defeat what would be the insurer’s obligation regarding a continuee.

Or for a group health insurance contract, an election period more generous than public law requires might breach an obligation of the employer as the group contract holder, breach a condition for the insurer’s obligation, or otherwise defeat what would be the insurer’s obligation regarding a continuee.

With either of those contracts, an employer might want help from a reader who’s experienced or at least knowledgeable (and, preferably, with her own financial capacity to restore the employer's loss that results from its reliance on an adviser's incorrect or incomplete advice or information).

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Agreed.  I think there's a reason you'll never see this come up in the real word.  The carriers (insured) or stop-loss (self-insured) would never bless it because of the tremendous adverse selection problem.

I suppose a very large employer that's self-insured with no stop-loss could try it, but at that point they might as well just offer subsidized COBRA.

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