COBRA and open enrollment waivers

[Guest susanyb]

If our employee has an open enrollment date now for coverage to begin January 1 and his wife has an open enrollment period in April - and his wife waives coverage are we obligated to offer her COBRA to span the months between January and April.

He is telling me that his wife's HR person said we were obligated to do this - however I have never heard of this - because no qualifying event has occurred - she is waiving our coverage.

Kind of need a response pretty quick. Thanks

[Guest llerner]

First and foremost, the wife cannot claim COBRA since she was not a member of the health plan. Perhaps she had coverage at her employer and can claim it that way but if she was not enrolled in your plan, she has no COBRA rights to the Plan. You are right, there is no qualifying event because there is no coverage therefore, no loss of coverage.

[oriecat]

Sounds to me like the wife IS currently covered, but is now choosing to drop her coverage during open enrollment. But I agree that waiving coverage is not a qualifying event for COBRA. However wouldn't the loss of coverage, due to the waiving, then be a HIPAA Special Enrollments events for her employers plan? So she shouldn't have to wait until April?

[Sandra Pearce]

I agree in part with Oriecat, the dropping of coverage at open enrollment is not a COBRA qualifying event. However, I do not totally agree with the second part of the comment regarding HIPAA Special Enrollment rights in the other plan. The loss of other coverage due to choice (dropping the coverage) is not required by the Act; however, the other employer's plan may have more generous language related to the loss of other coverage than that required by the Act.

[oriecat]

Yeah, I wasn't sure on that, that's why I formed it as a question. However, my thinking was along the lines of that once the spouse's coverage ends, she will get a HIPAA Creditable Coverage Cert, and those don't generally say why the coverage ended, in my experience anyway, so if she just took that to the employer, they wouldn't know it was a voluntary waiving, unless they were inclined to dig deeper. I would think most er's would just take the cert and use it as a HIPAA event. How do others handle that?

[Sandra Pearce]

Our health plan follows the strictest interpretation of the regulations. We require a copy of the COBRA offering and if the prior plan was being run properly there would be no COBRA offering on a drop at open enrollment, or we require a statement from the prior employer stating that employment terminated, hours were reduced, etc. We also do not have open enrollments in our health plan.

[Guest asire2002]

Susanyb, maybe the question isn't whether your plan has to offer COBRA, but whether if the wife initially elects coverage under your plan in order to avoid a gap in coverage, can she then drop coverage in April when she is able to enroll in the other plan? And the answer to that is your plan could allow an election change in April based on the other plan's enrollment period, but is not required to allow it.