Gaming the COBRA Relocation Election Option

[Christine Roberts]

Employee on HMO declines COBRA, moves out of HMO service area, incurs medical bills, and then decides she needs coverage, after all. At the very end of the 60 day election period, she elects coverage and notifies employer of her move. Employer informs her she will need PPO coverage going forward, and she demands the employer and insurer reinstate PPO coverage retroactive to her date of resignation. Insurer refuses to reinstate coverage.

Am I correct in surmising that Treas. Reg. Sec. 54.4980B-5 Q&A 4 only requires PROSPECTIVE conversion to indemnity/PPO coverage, not retroactive?

[Christine Roberts]

Yes, to answer my own question - the other available coverage (e.g., PPO option) need only be made available not later than the date of the qualified beneficiary's relocation, or, if later, the first day of the month after the month in which the qualified beneficiary requests the other coverage.