Cobra

[Guest susanyb]

We have an employee that was divorced in 1994 who made arrangements to continue to cover his wife on his medical plan as his dependent.

We purchased the company in 1998 and he continued the wife on the plan as his dependent (probably because no one knew of the situation). Now the employee is complaining because his ex isn't paying her medical bills and it is going against his credit rating and he wants her off the plan as his dependent.

I think she should just be dropped from the plan because she has had much more than 36 months of continued coverage. Others think we should drop her now and offer her 36 months of COBRA coverage.

Their divorce decree says - The Husband shall maintain for the benefit of the Wife his current medical/health insurance or equivalent plan for so long as the Wife is eligible and for so long as said insurance is available through his employer.

Your opinions please. Drop now - or 36 months of COBRA - what do we do?

[mroberts]

When you say the employee made arrangements to continue her coverage back in 1994, was that through COBRA? If she was offered COBRA back then, I would term her immediately since she's had a free ride for about another 36 months. If she wasn't given COBRA notice, my thoughts would be that you would have to go through the process and grant her COBRA. This is an extreme case though since we are talking about 8 years.

[KIP KRAUS]

My question first off is was the spouse being covered legally under the plan in the first place. Not many group medical plans allow for ex-spouses to be covered as a dependent.

No court ordered document that I’m aware of can require a group medical plan to cover an ex-spouse if ex-spouses are otherwise not covered.

Having said this, I would be extremely careful in not offering COBRA. Smells like a lawsuit to me. The way the courts are these days cutting someone off medical coverage without offering COBRA can be a risky move.

If a mistake was made by the employer, the employer may want to offer COBRA and bite the bullet.

[Mary C]

My first reaction is what state are you in? Massachusetts and Rhode Island both have state laws (applicable to fully insured plans) that allow ex-spouses to remain on the plan if the divorce stipulates until either one remarries or the employee no longer is eligible for coverage.

mary

[KIP KRAUS]

Mary C:

Do the states you mentioned allow it or mandate it? There is a difference.

[Mary C]

I suppose its a mandate. The state laws are worded that the group plan "allow" the ex-spouse to remain on the plan after a divorce if the decree stipulates that regardless of the eligiblity provisions. We challenged it once and lost.

[mbozek]

Mary C ; Certain states require that the spouse be allowed to remain as a dependent under the health plan after divorce indefinitley. MA and MI are two states that have enacted such laws and Fed cts have held that ERISA does not preempt these state laws. Must have counsel review the applicable state laws.