Dependent audit - COBRA for drops?

[Guest calcu]

We periodically audit the dependency status of individuals enrolled as dependents by an employee. We request proof of dependency on two separate occassions. If we receive no response validating the individual's status of a dependent, we drop the individual from coverage. Is this a COBRA event? I say no because it isn't a "qualifying event" as defined in the regs, but it is just as simple as dropping them? Has anybody had experience with this or know where I can find more info (any cases?) Thanks

[Sandra Pearce]

As you know your employee is obligated to notify you when a dependent is no longer eligible. As you also know sometimes they do not do this. Since you have a routine audit procedure set up, perhaps when you do not receive the response and drop the coverage you could send a letter stating that no response was received to your previous inquiry, based on most recent available information provided the coverage for the dependent terminated XX/XX/XX. Presumably the dates involved would be so far back that the lack of timely notice to the Plan by the participant would eliminate any COBRA obligation. Just a thought from another HR person with similar problems and issues.

[Guest b2kates]

Suggest you be careful, in that dropping a dependent the COBRA termed employee does not say you failed to properly notify him or her; or that they never received the "audit" letter.

Previously we have had experiences where the parent came back with proof of dependency and had to put the dependent back on the coverage retroactively.

[Sandra Pearce]

I handle a self insured health plan and would have no problem retroactively reinstating the dependent.

[Guest calcu]

Great. These were my thoughts. I figured we would verify that the dependent is not just recently not eligible any longer and send the letting informing the employee that we were dropping the dependent. If, however, we happen to audit an employee whose child recently ceased to qualify as a dependent (the employee is still within the time frame to notify us), we would send the letter informing the employee that we were dropping the dependent and go ahead and send the COBRA notification letter.