COBRA notice needed if we're terminating our self-insured group health plan altogether?

[Alf]

We are considering terminating all employees eligible for group health plan. If we terminate our self-insured plan (w/stop loss insurance of course) for all employees and retirees do we have to give COBRA notices even though COBRA will not be available? What can we say in the notice that will be of any help to anyone?

[Guest kowen]

You're terminating the plan, not the employees, right? Plan termination isn't a COBRA qualifying event so I don't see a need to send COBRA notices.

[Alf]

All employees will terminate. If we terminate the plan before the employees terminate, I guess that no one will be entitled to COBRA technically. How safe is that going to be?

[Guest kowen]

I'm not sure I understand the situation. Are you planning to fire all employees who are eligible for the plan?

[Alf]

Yes. It may be a chicken-or-the-egg question though. My understanding is if the group health plan is terminated prior to the time all employees are terminated (and there is no GHP maintained by an controlled group memeber, etc. . . ) no COBRA notices are required.

[KJohnson]

Not safe at all--from the regs:

Any elimination or reduction of coverage in anticipation of an event described in paragraph (b) of Q&A-1 of section 54.4980B-4 is disregarded for purposes of this Q&A-1 and for purposes of any other reference in sections 54.4980B-1 through 54.4980B-10 to coverage in effect immediately before (or on the day before) a qualifying event. COBRA