Cobra And Alternative Retiree Coverage

[Guest Ann Mackey]

If an employer wants to provide health insurance coverage to retirees and their spouses until the retirees are entitled to Medicare, is there any way the employer can have the spouses' right to COBRA coverage run concurrently to the retiree coverage rather than be tacked onto the end of the retiree coverage? Assume that the coverage provided to retirees and their spouses is the same as that provided to active employees except that retirees and spouses pay 100% of the premium cost of the insurance, and the active employees pay none of the cost, and assume that the spouses are often younger than the employees. Could the employer give the spouse a COBRA notice when the employee retires and offer to the spouse both COBRA and the alternative retiree coverage, and then the spouse' election of retiree coverage (and non-election of COBRA) exhausts the spouse' right to COBRA?

[mroberts]

From what you described, no. If your plan document covers retirees the same way as active employees (except for contributions) then they must be treated the same. Therefore, you can not offer COBRA before a spouse is truly eligible for it.

[Guest HAP]

Definitely the plan document must be followed; however, if the employee and spouse are required to elect (are not automatically enrolled on) the retiree plan & if the contributions increase for the retiree plan, the QBs should be offered COBRA as well as the retiree plan. Not that they have to elect COBRA....