Converting from an indemnity plan to a PPO plan for people under COBRA.

[katieinny]

An employer is converting their salaried, non-union employees from an indemnity plan to a PPO plan. Some people from this group are currently receiving their benefits under COBRA. Can they also be converted to the PPO plan?

[KJohnson]

Section 54.4980B-4 of the regulations define what coverage must be offered and state that:

If a qualifying event occurs, each qualified beneficiary (other than a qualified beneficiary for whom the qualifying event will not result in any immediate or deferred loss of coverage) must be offered an opportunity to elect to receive the group health plan coverage that is provided to similarly situated nonCOBRA beneficiaries (ordinarily, the same coverage that the qualified beneficiary had on the day before the qualifying event). See Q&A-3 of Sec. 54.4980B-3 for the definition of similarly situated nonCOBRA beneficiaries. This coverage is COBRA continuation coverage. If coverage is modified for similarly situated nonCOBRA beneficiaries, then the coverage made available to qualified beneficiaries is modified in the same way.