COBRA and custody

[Guest buchanank]

An employee has had custody of her nephew. The father is assuming custody in Sept, but will not be eligible for benefits in his job until January. Someone told her that the minor child may be eligible for COBRA. She offered to keep custody until January, but the father wants to take custody now. Her concern was with the child not having insurance for 3 months.

The father does not have previous employer healthcare to be able to add the child onto a policy due to the custody qualifying event. I do not believe in the situation of a custody qualifying event (unlike death, divorce or no longer eligible dependent status) allows us to offer COBRA coverage to this individual. I am confuse. Any input would be greatly appreciated. Thanks in advance!!

[Sandra Pearce]

COBRA coverage is continuation of existing coverage offered when someone loses that coverage due to a COBRA-qualifying event. If the child did not have coverage in your plan and has not lost coverage in your plan, the child has not experienced a COBRA-qualifying event in your plan. However, if your employee has gained legal custody of the child this may be an eligible reason to add the child to your plan. You will have to look at the dependent eligibility provisions of the plan and documentation regarding the custody.

[KIP KRAUS]

I agree with Sandra. If the child is covered under your medical plan as an eligible dependent and then as a result of your employee losing custody, the child loses coverage in accordance with the medical plan the child would be eligible for COBRA.

[Mary C]

If the child is enrolled in your plan and the father regains custody, this is NOT an event listed in the COBRA regs to allow for continuation of coverage. While the child is no longer considered a dependent eligible for the plan and therefore has experience a loss of eligiblity, it is not an event for COBRA. However, since the regs are only the "minimum" you need to do, you will need to make a decision if you would allow this as an exception. If you do, you will also need to allow it for all employees whose covered dependents may move out of their household for any reason.

[KIP KRAUS]

Mary C:

If a dependent loses coverage because he/she loses eligibility as a dependent COBRA coverage is offered. I don't understand your post.

[Mary C]

Kip -

under what event?

According to the COBRA regs, the only qualifying events to allow COBRA to be offered to depedent children is is the loss coverage due to an employee's termination, divorce, death or legal separation, entitlement to Medicare or the child reaches the maximum age allowed under the plan.

There is NO qualifying event listed in the regs to allow COBRA to be offered due to a change of custody. If the regs have changed, I'd be interested to know when and how.

However, if the employer wants to offer COBRA for an event (change of custody) that is NOT listed in the regs, they will have to continue to do so for any dependent child who loses eligiblity in similar circumstances. And they should check with the insurer and their COBRA TPA (if any) to see if they will go along. I speak from experience - we wanted to offer COBRA in a similar situation and were promptly refused by both our COBRA TPA and the insurer.

[Sandra Pearce]

Do the regulations say "reaches the maximum age allowable under the plan?" Everything I have (not the regs themselves) says "A dependent child's ceasing to be a dependent child of a covered employee under the generally applicable requirements of the plan."

[KIP KRAUS]

Sandra is right. If you go to the U.S. Department Of Labor web site and read their published brochure on COBRA rights you will read that Loss of “dependent child” status under the plan rules is a qualifying event.

I wouldn't want to go to court over this one trying to prove that the regs. doesn't apply to a loss of cudtody. There are many specifics not published in the regs., but that doesn't mean that the ones published cannot be intrepreted in favor of the claimant.