COBRA Coverage Changes

[Guest garygersh2]

We offer two medical plan options to our employees. Under COBRA, must we allow former employees to switch plans, if they wish to do so, at time of termination (we do not permit active employees to make such changes when they experience a mid-year life event)? If we are not required to offer this option, can we do it voluntarily? If so, are there employee relations, carrier or other administrative issues that would make it unwise for us to consider doing so?

[Mary C]

No, you are not required to allow a participant to switch plan options at termination. In fact, COBRA only requires the opportunity to continue the SAME coverage they were enrolled in when actively employed. While you can do it voluntarily, what you do for one person must be consistently offered to all future terminations. As far as problems, there could verly likely be problems with your carrier allowing them to change and possibly refusing to accept them mid-year which could open a whole lot of other issues. It might also cause some pressure from your active employees to allow them to change options with a mid year event, too.