COBRA rates

[Guest ooota]

The multiemployer health plan offers a discounted cobra rate to participants that suffer a loss in coverage due to a reduction in the hours of their employment. This discounted rate is offered for the first six months and then the rate is billed at the full rate of 102% of the fund's costs. The fund has been presented with the situation where a participant has suffered a loss in coverage due to a reduction of hours and has declined cobra coverage. The participant's beneficiary, however, has elected the cobra coverage. The fund does not want to have to offer the beneficiary the discounted rate. Is the fund required to offer the beneficiary the same rate as the participant in this situation or can the fund charge the full rate of 102%?

Thanks.

[oriecat]

Does the plan doc address the discount anywhere, or is it unwritten? What about the COBRA notices, do they mention it and what does it say?

[Guest ooota]

No the plan document does not address the discount. The Cobra notices do address the discount. The discounted rate amounts are set forth in the notices. There is also language stating that the rate applies for only the first six months of a participant losing coverage due to a reduction in hours. Thanks for your reply!