Retiree Coverage and COBRA coverage

[Guest April]

When employee's retire we automatically offer them a retiree plan and offer the COBRA coverage to the existing plan. Can the retiree elect both coverages? I recall reading somewhere that they cannot have a retiree plan and COBRA. Any suggestions would be greatly appreciated.

[mroberts]

I just read a blurb on this and it states that a person "may" be able to be on both if the retiree coverage is less comprehensive. I'm not sure what this legal perspective is basing its opinion on, however. I always thought that once a COBRA participant becomes covered under another group health plan, you can terminate his or her coverage.

Regardless, the question I have is why would a retiree elect both? If the other plan is better, why not just be covered under that one? Does he lose eligibility for the retiree plan if he does not elect it upon retirement?

[Guest April]

Exactly. If the retiree elects the COBRA, he loses the opportunity to go on the retiree plan. And I beleive that he likes the existing plan.

I have read everything regarding "When you can terminate COBRA coverage", and it basically is stating if the two plans do not mirror each other and there is a pre-existing limitation, then COBRA cannot be terminated.

Then how do they coordinate the processing of the claims. I read that the COBRA coverage would be primary (due to the pre-existing limitation on the other plan).

As mentioned the retiree does not want to lose the opportunity to pick up the retiree plan. His thought is to elect both plans. Only use the COBRA coverage until it expires and then stay on the retiree plan. I need to make sure this is legal.

Thank you for your assistance.

[Mary C]

the key here is the timing of elections. If he elects the retiree plan and enrolls BEFORE he elects COBRA, then under COBRA regs he can have both. Any coverage in place PRIOR to the COBRA election does not disqualify a person from being eligible for COBRA. Its only when you become covered by another plan after your COBRA election that would make you ineligible for COBRA.

Also, check the plan document. The eligiblity provisions in our retiree health care plan explicitly state that you can only have our retiree health care plan or our COBRA , not both.

[Guest April]

Thank you so much for the information. It has been very helpful.

[mroberts]

Actually, I just read the detailed treasury regs that deal with this situation. In your example, the employee CANNOT have both. One of the parameters of the employee being able to be covered under 2 different health plans, with one of them being COBRA, is that they are offered through different employers. Since you offer both, the ex-employee can only have one or the other.