COBRA Premium not paid by Company

[Guest NIAinJAXS]

What is a reasonable time for a company to update information with the insurance company? What if a company accepts 3 COBRA payments with a fourth on the way and then something happens and the individual learns they do not have coverage with the insurance company though they paid the premiums?

Also, who should the recieve the EOB's? The Ex (who is the insurance primary person) or the ex-spouse who now pays there entire premium on there own? I would think the EOB goes to the person paying and recieving treatment NOT the ex spouse who was the primary.

[KIP KRAUS]

If the COBRA premiums are being paid to the employer then it is the employer’s responsibility to notify the insurer and see that the COBRA participant is enrolled. In my experience, in the normal course of events it shouldn’t take longer than 5 to 7 business days to get enrolled provided all of the necessary paperwork is completed properly and forwarded to the insurer. In some cases it can be done in 1 day depending on the efficiency of the employer and insurer.

As to the second part of your query, some insurers will automatically send EOBs to the employee’s address during a period when the dependents are covered as dependents of an active employee. If you are enrolled properly as the COBRA participant and premium payer the EOBs should go to you. The ex-spouse shouldn’t be involved at all.

You should contact the employer and the insurer and let them know of your concerns. Between the two of them you should be able straighten this out.

[Guest bayarea1]

I'm reading the first question differently. Assuming that COBRA has been elected, and you are continually reimbursing the company directly for premium payment, the IRS indicates that payment is considered timely if made within 30 days from its due date. Plans may accept premium payment after 30 days standardly or by exception - but this rarely occurs and would be stated in your COBRA notification. You did not specify what "something happens" means, but I'll infer that timely premium payment was made by you and the company failed to notify the benefit administrator.

Because COBRA premium payment schedules are based on qualifying events rather than by calendar, the plan sponsor usually has an agenda by which to notify the benefit administrator of the COBRA member's coverage status. In the event of erroneous termination, coverage eligibility may be reinstated on a retroactive basis with benefits allowed accordingly.

With regard to your second question. Although the plan sponsor and benefit administrator may still consider an ex-spouse a dependent of the company employee, the IRS views them as an individual "qualified beneficiary". In addition, there are privacy considerations to be concerned with under HIPAA regs which are too lengthy to discuss here. As such, the benefit administrator may (and should) be directed to send EOB's to the ex-spouse residence.

[Guest NIAinJAXS]

Now I'm really confused. Let me try not to be so hypothetical in what has happened. My boss and his wife divorced, insurance was provided via her company because my boss is self-employeed and owns a small company that does not provide insurance (still a great place to work).

The wife's insurance policy had a “conversion policy” which allows for COBRA during a divorce. The wife’s company has been adversarial, to say the least, from the get go, incorrectly dating material, requesting only certified funds and the like.

The company has now collected COBRA payments for December, January and February all in a timely manner (with March on the way) and as of today the insurance company shows that he was “dropped” on the policy as of November 30, 2002 and no COBRA has been but into effect.

This morning he received a CT Scan and when the insurance company was called to make sure to have the correct address for the EOB’s he learned that he was not even covered by insurance. What responsibility does the company hold when they are collecting premiums for COBRA insurance and in actuality not forwarding the premiums or coverage paperwork?

At this point, her company has yet to respond to an e-mail on the matter, nor are they returning telephone calls. I'm afraid this is about to turn into a huge mess. . .

In as far as my second question, are we all in agreement that the ex-wife should not have access to the EOB’s due to obvious privacy issues.

[Guest bayarea1]

Then the ability to provide proof of the company's receipt of payment has become critical. If you haven't sent the certified funds via some sort of registered or tracked mail service, you should call the bank and find out when the draft was cashed/transferred.

In terms of COBRA enforcement: I am not in the legal field, but all litigation that I have seen with regard to COBRA malfeasance has been contested by civil action.

[KIP KRAUS]

Provided you can prove that your boss has complied with all of the election and payment provisions of enrolling for COBRA I would contact the US Department Of Labor immediately. If the employer is playing games thay can correct that immediately.

[Mary C]

From the employer's point of view -

At the request of our carriers, we pay and report COBRA premiums paid only once a month to the carriers. (They do not want to be contacted and have payments sent in every day and prefer the once a month reporting). Our report goes out mid-month and includes all premiums paid through the report date. If you haven't paid by the 10th of the current month for coverage, there's a good chance you will show canceled. For example - our carriers cancel coverage at the end of each month until the next COBRA premium report is received. So all COBRA participants (unless they have paid more than 1 month is advance) are canceled February 28. The COBRA report for March will show all payments received after February 15 and what month they apply to. If your last payment was postmarked February 20 and was for February, we would report your paid through date of February 28 and the HMO would update their records to show coverage during February 28, but none for March. If you called to verify coverage for a procedure in March, you would be told you were canceled. It is our experience the carriers will NOT update to show coverage until payment is received.

So depending on when your boss paid for coverage in the month, he may still show as canceled.

[Guest NIAinJAXS]

Mary -

What your saying makes perfect sense - however they NEVER have had him covered. They show his last date of coverage as the 30th of the month following the divorce, ie divorce granted on the 7th of November, last day of coverage the 30th of November.

So unless the carrier is asking the employer to hold payments and enrollment forms and report once a quarter (highly unlikely) we seem to have a problem. This is not a matter of late payments and missing "send-in" dates. This is a matter of the employeer not (seeming) to enroll him at all.

He also has yet to receive an updated medical card or the like, and as I've said the employeer is being adversarial. When the program administrator is asked direct questions via e-mail she responds by forwarding the e-mail to another person with a message to handle this and a "cc" back to us. She seem to consider that "address the situation".

Needless to say, because he is not "enrolled" the insurance company will not even talk to him - them again why should they - as far as they are concerned this is just some crazy guy "saying" he is insured via COBRA through there company.

[Guest AHayhow]

Is the wife's company adminsitering COBRA in-house or do they have a third party providing these services? Look at the initial enrollment information and/or the bills you have received. If it indicates an address or telephone number other than the wofe's company, I would call that third party to confirm whether or not they received the enrollment and payment information from the company. If they have, then the hold up in getting coverage reinstated is with the third party.

If they are administering the COBRA in-house, I think ERISA addresses the timely payment of premiums to a carrier (from participants) as a fiduciary responsibility. I haven't read anything about this lately so I can't remember if a timeframe is defined.