Continuing Medical coverages for EEs on LTD

[Guest jgf810]

My company (we have 8,000+ employees) currently continues Medical coverage indefinitely for employees on LTD. At no cost to the employee. I would like to hear how other large companies cost sharing medical coverage with there employees on LTD.

We are looking at changing to cost sharing at the active employee level and providing coverage for two years follow by COBRA or continuing coverage til medicare eligible.

Please share your policy.

[mroberts]

Most companies usually terminate employees after 6 or 12 months of disability because of the dilemma you brought up. Paying a disabled employee's medical insurance indefinitely can be extremely costly! Upon terminating the employee, he or she needs to be offered COBRA.

[Mary C]

We are a large (100,000+ employees), fortune 500 company. We allow the employee to continue coverage at the active employee cost for the length of the original leave (usually 1 year). Then COBRA is offered.

[Guest dustin]

This is an age old design issue. I have drafted many welfare wrap documents and SPDs in my law and consulting practices and have always querried the handling of this matter. Amazingly, most clients have not given alot of prior thought to this sticky subject. It has been my experience that 50% of the companies do not include as eligible employees those individuals who are on LTD with respect to medical plan coverage. These employers COBRA the LTD folks after STD period lapses. Of the 50% that do continue medical coverage in some way, there are many varieties of design. Some of these companies offer retiree medical and if the person is eligible for reiree benefits, then they get into the retiree medical plan. Some employers continue medical for one year and apply it to the COBRA period. Others allow LTD folks to pay for the coverage as active employees would. I would think that a cost analysis would be prudent and if medical is offered to LTD folks, artful language must be included in the plan docs and other communications so it is clear that the employer can eliminate the benefit in the future. Chuck.

[Guest jgf810]

As a side thought to my posting. If we were to stop offering and paying for medical coverage to employees who have been on LTD for 2 or more years beginning on 1/1/2004 (we would notify them this fall that COBRA would be offered). Could the company face any valid legal issues by putting this policy in place? We currently have no written policy on this; it has just been a HR benefits practice.

[Don Levit]

Regardless of how long coverage is offered (through the group plan and as a COBRA extension), if the medical expenses "continue" from the disabling accident or sickness - the medical bills must still be paid by the group insurer, even if premiums are not paid, right?

Don Levit

[mroberts]

Not right. Once coverage has lapsed, the employee is on his or her own.

As far as updating the policy goes, you will PROBABLY be ok as long as you can show that you are not targeting specific employees out on disability with this change and are creating the new policy for the benefit of the company as a whole. If you have union employees, this could definitely change things around. I would talk to an attorney before putting this new policy in place.