Notice prior to cancellation of COBRA

[Guest ljg]

Must a plan administrator give notice to an inusred prior to cancelling COBRA coverage due to late payment of premium? Does the fact that the administrator previously accepted late payment (after the 30 day grace period) affect this? The insured was out of the country and inadvertently forgot to pay his premium. The insured did not receive any notice concerning the late- or non-payment or cancelation. On making the next month's premium payment, the insured realized he had not paid the prior month's premium and submitted payment for both months' premiums (timely for the 2nd month, 10 days outside the 30 day grace period for the prior month). The premiums were returned with a letter stating coverage had been canceled because of late payment. The administrator had previously accepted payment of premium beyond the 30-day grace period and continued coverage.

[Kirk Maldonado]

I can't speak as to whether the prior acceptance of late premium estops the plan from refusing to accept subsequent late payments, but it is absolutely clear that the plan has no duty to remind the participant about the monthly payments. If the participant is stupid enough to miss the payment, that's his or her own problem.

If it was that important that he or she keep the coverage, that person should have made very certain that the premium be paid on time. My guess is what happened is that the participant decided to cancel COBRA by not paying the premium, but subsequently incurred medical expenses, and now wants to reinstate COBRA on a retroactive basis. I've seen people trying to pull that trick on more than one occasion in the past.

[GBurns]

You make no mention of the insurance carrier cancelling coverage. If the provider has not cancelled how can the administrator cancel ?

[Guest ljg]

In response to GBurns, the insured doesn't deal directly with the carrier, but only with the plan administrator -- payments are made payable to the insured's prior employer and sent to the plan administrator. Is there a way for the insured to deal directly with the insurance carrier to try to reinstate the policy? Also, do you have any opinion as to whether prior acceptance of late payments would/should bar the administrator/carrier from canceling the policy solely on that basis this time?

[Guest Bill55]

I just started using this message board. Based on what I read there is an employer (plan sponsor?), plan administrator, and insurer. Assuming this is a single employer plan the employer's Summary Plan Description document should clearly articulate the terms and conditions of a beneficiay maitaining COBRA coverage. If the plan administrator is other than the plan sponsor, I would expect that the former would look for guidance from plan documents furnished by the latter. Lastly, if the insurance contract is between the employer(plan sponsor) and an insurer all termination action should originate from the employer. In any event cancellation was appropriate on the part of the employer directly or via the plan adminisitrator.

[Guest Nancy Crichton]

This question comes from Minnesota.

My husband's employer of 41 years terminated his retiree and family insurance benefits due to non payment of premiums on February 17, 2000, retroactively to September 30, 1999.

The premiums were not deliberately not paid, they were truly forgotten. For 41 years our insurance premiums were automatically deducted from his pay checks and we never had to think of insurance as a "bill." It was sort of "out of sight, out of mind." When he retired we were given some slips of paper and told that we would have to pay these premiums monthly.

Dumb and dumber I know, but it was forgotten in the maze of Social Security, Medicare, raising a 9 year old granddaughter, and adjusting to retirement.

My questions are: What constitutes notice to a retiree under COBRA; notice of cancellation? What duty does the employer have under COBRA to notify retiree of being late? What remedies does retiree have under COBRA for reinstatement?

Where are the COBRA regulations on the Web? Also, would there be any state regulations that might supersede the COBRA rules.

You don't need to heap any more coals on my head, I've done enough of that for a life time.

You may e-mail your responses if you wish. Thank you in advance for your assistance.

NJC

------------------

njc

[Guest DoctorZen]

Nancy- per the board, your e-mail is unavailable. Aside from that, did your husband opt for COBRA while waiting for Medicare eligibility?

[Guest Nancy Crichton]

Dr Zen

Yes, my husband signed up for the COBRA plan at our last meeting with the benefits people prior to his retirement. He retired August 2, and we met with them to finalize everything, chose which pension plan he would take and at that point he signed up for the COBRA continuation of both his Medicare supplement and the family plan coverage for myself and our granddaughter.

I talked with the State of Minnesota Insurance Department and their legal department recommended that I prepare a letter outlining what occurred, draft a check in the total amount of what is past due, include the little coupons and get it to the highest ranking executive with the company we know. I did that this morning and delivered the check, letter and copies of correspondence from the clerk who terminated the coverage, to the Chairman of the Board. I was told to ask this person to intervene and get the insurance reinstated. He said it really should be no problem as it is at the company's discretion whether to accept late payments. As of last Friday, were will still covered as far as the insurance company was concerned. They had no notice of cancellation.

What a mess! I am just sick that I did this.

Thanks for any comments you might have.

------------------

njc

[Guest Nancy Crichton]

quote:

---

Originally posted by DoctorZen:

Nancy- per the board, your e-mail is unavailable. Aside from that, did your husband opt for COBRA while waiting for Medicare eligibility?

---

I don't know why my e-mail is unavailable. I registered it. Could you tell me why no one answered my question from back in February? I did respond to your inquiry.

------------------

njc