HIPAA Special Enrollment & COBRA - potential lapse of coverage bet

[Guest PDDeBoy]

Special Enrollment allows for coverage to become effective the first of the month following receipt of application by the insurer (assuming it was within the 30 days after the event qualifying for special enrollment).

Many administrators are requiring documentation of the loss in coverage (not necessarily a Cert of Qual Coverage - letter from prior employer) before they will allow enrollment under the special enrollment provision.

From what I can tell, this creates the potential for a person who is eligible for COBRA to have a lapse in coverage for the following reasons:

1) If they elect COBRA, they no longer are eligible for special enrollment rights.

2) If they lose coverage and apply during the 30 days, the plan administrator can enroll them the first of the following month, which leaves that gap in the month.

I am talking with a plan administrator whose policy is to not allow employees to make application for their own plan (*hospital who does it's own insurance plan) unless they provide documentation that their coverage has terminated / will terminate.

None of this seems in the spirit of the intent of the law, and I'm hoping there is some huge piece of the coordination of these two laws that I am missing.

[Sandra Pearce]

A health plan may require that the loss of the alternative coverage was 1) COBRA coverage that was exhausted, or 2) other coverage lost due to legal separation, divorce, death, termination of employment, reduction of hours of employment, or that 3) all employer contributions toward the coverage ended. Our plan requires the proof of loss and will accept it after the 30 day period as long as the request from our employee was made timely (within the 30 days) and the proof is submitted within a reasonable period of time after that request. In many cases a brief letter from the former employer is more expedient. Be aware that a HIPAA certificate from a prior carrier does not indicate a statement regarding whether coverage was lost due to eligibility for coverage or end of COBRA coverage so we do require more than a HIPAA certificate for loss of coverage.

A person losing coverage due to a COBRA qualifying event has 60 days from the date of the COBRA notice to elect continued coverage and that continuation is retroactive to the date of the qualifying event or loss of coverage. In this case there is no gap in coverage. If a HIPAA event happens to a family member of the COBRA QB and the request to add the family member is made within the 30 day period then, as you have determined, the family member may have a small gap in coverage but it does not constitute a significant break in coverage, 63 days, and would not cause the family member to lose credit for the prior coverage toward any pre-existing exclusions in the COBRA plan.