COBRA rights during plan conversion due to acqusition

[Guest VFernandez]

Recently, my previous employer was acquired by another company. COBRA continuees were not notified of the plan conversion and some received an invoice in the mail charging almost 3 times more than the previous plan charged, this is how they found out that the plan was changing.

Can you help me identify the rights COBRA continuees have in this scenario? Thank you.

[This message has been edited by VFernandez (edited 05-19-99).]

[Brigid Anderson]

Oh boy, that's a big question. The rules on COBRA in mergers and acquisitions have just been substantially revised in proposed IRS regulations issued in February. Prop. Treas. Reg. §§ 54.4980B-10, 64 Fed. Reg. 5237 (Feb. 3, 1999). What plan has the liability depends on the kind of sale involved (stock or asset) and whether the selling entity continues to maintain any group health plan. Without more facts about your particular situation, I couldn't start to answer your question in the space allowed for responses.

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