Terminated Employee

[nancy]

Can an employee who terminates employee submit claims for services after the date of termination? Or can they only use the runout period for claims incurred while an employee? In effect does the coverage period end at termination of employment?

[Lori Friedman]

Look to the plan document. Some plans provide a grace period after an employee's departure (it can be as long as until the end of the year), while other plans cut off coverage immediately.

[nancy]

Our plan does provide a grace period for filing claims incurred during the "coverage period". But my real question is must the service date be prior to termination of employment? Or does coverage end at termination of employment?

Is the coverage period the full 12 month plan year or does it end at the earlier of termination of employment or the end of the plan year?

[Sandra Pearce]

If your document is using the term "Coverage Period," likely that period is defined. Usually the period of coverage would be the period of time that the person is an employee participating in the plan and would end upon termination of employment. The COBRA regulations include spending accounts for that reason. The period of time to file a claim after the end of the employment or the end of the Plan year should also be stated in your Plan Document.