COBRA and hours bank in a Taft Hartley Plan

[Guest hughesm]

I'm looking for some help on whether anyone has seen any writing (authoratative or otherwise) on the subject of when a "qualifying event" occurs in the context of a taft-hartley program with an "hours bank" or contribution reserve. In a nutshell, the plan in question maintains eligibility for coverage period during which employer contributions are insufficient to buy coverage by "drawing" from an hours/dollars bank, until exhausted, and THEN allows the employee to voluntarily contribute for 18 months to maintain coverage. It would appear that the qualifying event could OPTIONALLY, from the group health plan's perspective, be (1) the initial reduction in hours causing loss of eligibility, from which date, the plan could measure the COBRA period and consider the hours bank draw "alternative coverage" or (2) the date when coverage is (or might be) lost if voluntary contributions of the hours deficiency are not paid, or (3) the end of the 18 non-COBRA "self pay."

Since this approach is fairly common, I would hope someone could point me in the direction of some official or quasi-official authority on such a case.

Thanks

[Kirk Maldonado]

I did some research on the topic of hours banks a few years ago, and I couldn't find anything.

[Guest hughesm]

Thanks Kirk: It's nice to know that a guy with your skills and experience ran into a similar dead space on this issue. It seems to me that the QE should be considered to arise when there is a loss of coverage (How's that for begging the question?) at the exhaustion of the banked hours. In other words, we could treat the banked hours as if they were "worked" and not have a basic event - "reduction in covered hours" -until they are exhausted. At that point, we start measuring periods, notice, etc. since it is then that we have an "increase in premium" for the same coverage.

I'll let you know if others agree/disagree or otherwise communicate other than on the board.

Thanks

[Kirk Maldonado]

HughesM:

It seems to me that the right answer is the reduction of hours worked is the qualifying event. The fact that termination of coverage won't occur until later (i.e., after exhaustion of the particpant's balance in the hours bank), shouldn't change that result.

However, why don't you try posting your question on the COBRA Q&A column? If anybody would have a definitive answer, it would be Paul Hamburger.