COBRA Rules for Out of Network

[Guest Joe Vasko]

If a COBRA participant moves out of the doctors network, what are the rules relating to his COBRA coverage and insurance?

Thanks, Joe

[mroberts]

If you have an employee who moves out of an HMO network area and no other coverage is offered through the company for out of area employees, most carriers will require that the employee elect a traditional or indemnity plan only. If the employee is enrolled in an HMO plan and moves out of area, but the company does offer a PPO or comparable coverage for employees not residing around corporate, then that employee has the right to elect one of the other plans.

[Guest chloe]

Actually, if no other plan is available, the individual must still be allowed to elect COBRA under the HMO even if it is of no or limited value to them. So, if they did elect the COBRA, they will only receive emergency services in their new location. However, they can receive coverage for non-emergency services if they travel back to the employer's service area for services. If the plan provides any out of network coverage (e.g., a POS plan), then the individual would ge only OON coverage in the new location. The premiums remain the same (102%), so nobody usually takes it. We've had problems with this recently and I have verification from discussions with the Dept. of Labor. Take a look at IRS Reg. 54.4980B-5 Q&A4.

[GBurns]

Since the providing and election of COBRA coverage is not governed by the method by which the benefits are delivered, having an HMO, PPO or POS etc is irrelevant. The ex-employee must be provided with and is free to elect COBRA coverage, whether there is a provider network for use is not relevant.