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COBRA for Illegal Immigrants


Guest PRose
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Guest PRose

We have just discovered through background checks that we have a number of immigrants who have been working with our company using falsified social security numbers. These employees have been terminated from our company. Our question is, do we have to offer COBRA benefits to these employees?

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The only covered aliens that I ever recall reading about in any employee legislation are legal. I may be wrong, but I don’t think illegal aliens are covered by COBRA, and I wouldn’t offer it to these employees. The fact that they were covered as employees before they were discovered to be illegal aliens, in my opinion gives them no status.

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Guest lmrice

I would also think that the fact they falsified federal documents could make them ineligible for COBRA under the "gross misconduct exception" clause.

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Guest hank

I would be careful about not providing the COBRA election, though I agree that falsifying their SSNs seems to fit the "gross misconduct" termination event contemplated by COBRA. The sanctions for COBRA noncompliance are rather severe, and the costs of providing the notice/election are minor by comparison. Even if you don't provide the notice/election and are ultimately vindicated in the "inevitable" litigation, you will still have incurred significant defense costs. Doesn't it seem less risky to provide the notice/election?

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Hank

Having said what you said, would you take this case? If, as I contend, they have no status under COBRA, why would a court even allow this to be presented?

While I appreciate your conservative approach to this cituation, I would advise my employer to not offer COBRA.

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Guest hank

Kip, I wouldn't take the case. There is some case law holding that falsifying records to obtain money (paychecks) is "gross misconduct" for COBRA purposes. I did a quick search on LEXIS to see whether any court has addressed whether COBRA does or doesn't apply to illegal aliens and couldn't find any reported cases. I'm not an immigration attorney (nor do I play one on TV!), but there some questionable cases out there holding that illegal aliens have certain constitutionally protected rights (for example, continued neonatal care under the Medicare statute). While I wouldn't take the case, some public interest legal group interested in breaking new COBRA ground might well do so! I wouldn't counsel my employer clients to be the test case when they could avoid litigation for the cost of first class postage for the COBRA notice.

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Hank:

Thanks for the enlightenment regarding no cases related to COBRA and its applicability to illegal aliens. I seem to recall reading something related to illegal aliens be eligible for Medicaid benefits. Not to be argumentative, but if there are a significant number of these illegals in this company offering them COBRA could be detrimental to claims experience if any of them or their dependents have major medical problems, which would cost considerably more than postage. This of course assumes that Prose’s plan is experienced rated.

I agree that some special interest group would be a likely suspect for taking a case of this nature. I guess that’s what happens when people don’t have real jobs, and the court system seems to allow any and everything to come before it, especially when the big bad employer is the suspected culprit.

I’m not an attorney of any kind, but that doesn’t mean I’ve lost total ability think logically. On the other hand, it seems that very often logic doesn’t prevail in litigation. Boy, I hope I never have to have a jury of my peers.

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I seem to recall some case law re alienage but I thought this applied to "legal" aliens. In the case of neonatal care, if the child was born in the US I thought that made him a US citizen. Anyway, I wouldn't offer COBRA. What did you do when you found out they were not legal? Call INS? I would worry more that offering COBRA might get you in even more trouble with the Feds. Has INS weighed in on what you should do? I think if you are relying on what INS tells you to do you have a pretty good defense.

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Guest hank

Letting INS' guide you in this scenario probably makes at least as much sense as anything we all have written here. But since it's ultimately IRS or DOL which audit for COBRA compliance, I'm not sure following INS' advice would be much of a defense.

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Guest LDH1

How about a slightly different fact pattern in which the employee was validly in the U.S. working, but upon termination of employment the alien is required to leave and if he or she does not do so is here illegally. Do you need to offer COBRA? Does the obligation end once the individual becomes illegally present in the U.S.?

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Sure it would! Just imagine what would happen with INS helping you. Ex-employee goes to jail for falsifying SSN's--no COBRA here.(although maybe for the dependents, but if they're here illegally too....)

Ex-E is detained pending deportation hearing--no COBRA here either, govt pays for their care.

Ex-E is deported--does your plan cover services rendered outside of the US? Especially if it is an HMO?

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