No QE COBRA notice - How to correct?

[Alf]

Fully insured plan. If a qualifying event COBRA notice is not sent by the deadline, should an employer/administrator send one out asap or just hide? This is the only fix we can think of to avoid potentionally unlimited exposure on claims, but it really raises a red flag.

Any tips on explaining this to the insurance company or ideas about whether we will get it covered?

Is there some point that this doesn't make sense (what if one year late, for example). We assume that the qualified beneficiaries can be required to pay for any elapsed premiums (the deadline for these arrearages is unanswered apparently), but at some point, the past premiums get pretty high.

Any general thoughts would be appreciated!

[jsb]

1st, get advice from a good benefits attorney!

From a risk management standpoint, you hit the nail on the head regarding potentionally unlimited exposure on claims, which you would want to avoid. I think that until the notice is sent, your clock doesn't start running and you are exposed. Get the letter sent.

Red flags? You bet, but you may get lucky and the person never responds and never comes after you. However, if they do want to make you the next failed COBRA compliance test case, your attorney can either defend you or advise settlement.

Hopefully your health carrier will work with you and provide the coverage, but don't expect a free ride from them. They don't necessarily have to accept the risk of your mistake. You may need to agree to reimburse claims to them and have them act as your TPA for this one case. If you are a large plan, it will be easier for them to agree, presuming that your plan is mostly rated on its own experience already.

If no claims to date and the QB wants to sign up, you may need to consider eating past premiums as a way to settle potential liability. You could hard ball them and try to make them pay, but that might drive them to their own attorney if they don't already have one. Unless your premiums exceed $3,000 per month, paying the back premium will likely be cheaper than the penalties for failing to comply with the notice requirements.

Take your medicine, fix your procedure that allowed this notification to be skipped, and move on.