Health Plan Eligibility While Receiving Severance Pay?

[Guest akwallace]

How do you handle the continuation of health/dental benefits while a former employee is receiving severance pay?

We currently terminate benefits upon employment termination, and any promised benefits continuation is handled by the company "paying for" the COBRA for the first 3 months, for example. This allows us to be in compliance with our plan eligibility, which would not cover an employee not actively employed.

Does anyone handle it differently, and spell out in the Plan provisions that a former employee receiving severance pay is eligible to continue under the active employee plan, and then COBRA begins after the severance period?

[Sandra Pearce]

Termination of employment ends active employee status in our health plan. COBRA is always offered as of that date. If we were to agree (not part of our current severance plan) to pay for COBRA coverage for a period of time, we would have the employee enroll for the COBRA coverage and we would pay for the period agreed to.