COBRA Employer Benefits

[Guest Sherri Horsey]

If a previous employee does not pay their portion of the fee for COBRA benefits, how long must an organization continue to provide the benefits. Or, in the event that the employee does pay his/her premium but the check that he/she issues has bounced, approximately bounced checks since December 2000, how would you suggest the employer handle this situation. Please note that each time a check bounces, the employer does incur the bounced check fee.

[Guest jreddi]

I came across that situation several years ago and spoke with several attorneys about it.

We decided that if the employee pays with a bouncing check and makes his or her "portion" --and by that I hope you mean the 102% s/he is supposed to pay-- before the 30 day grace period is up, then we would continue his/her coverage.

If, however, the employee bounced a check or two on us and didn't fess up by paying with a good check or with a money order or cashier's check within the 30 day grace period, then we cancelled the coverage. Period.

I don't see --and neither did the attorneys-- the problem in requiring the employee to only pay with a cashier's check or money order, since the method of payment is not specified in the law.