COBRA & open enrollment period

[Guest groundfloor]

Recently the 5th Circuit made a case ruling to say the practice of limiting the time frame for a QB to enroll in COBRA to no more than 60 days is illegal. We have been allowing employees to elect coverage during a 60 day period, and if they decided to elect coverage at 90 days, we do not allow it, and neither does the insurer. I interpreted the case ruling to say that this practice is illegal?

If a COBRA QB does not elect the coverage until 13 months later and shows up with the back premium - are we to accept it?

[oriecat]

I think you are misinterpreting the case (if you're thinking of the same one I am). The problem in that case is that the COBRA documents did not specify a maximum election period. So the employer/plan admin was trying to say, well COBRA already specifies a max of 60 days, so that's all you get. No, COBRA specifies a minimum of 60 days. You have to give them at least 60 days. You don't have to give them more than 60 days, as long as you tell them how long they have. At least this is my understanding...

[Guest groundfloor]

Okay, we are on the same page - if I, as mr. employer put in my COBRA notices and in the handbook

" COBRA benefits can be elected for up to 18,29 or 36 months with the QB paying 102% of the premium. The election period is a minimum of 60 days from the date of QE."

would that pass the legalities? The next hurdle under a fully insured plan is to get the underwriters to approve such "open enrollment". Any thoughts besides the claims implications.

Thanks,

[jsb]

With your notice provision, based on the new case interpretation, I would think that I have 17 months and 28 to 31 days (depending on how the months fall) to elect COBRA. This is too long. You have given me "a minimum of 60 days" but have put no maximum election cap on it.

To fix, remove the word minimum so that "...you have 60 days from the latter of the date of this notice, or the date of your qualifying event, to make an election".

[oriecat]

No, you just said 60 is the minimum. That means if they elect COBRA on day 61 you'd have to give it to them. You need to specify the maximum of 60. (60 is the minimum under the COBRA regs, and then the maximum under your plan.)

I'm not sure why you are asking about the underwriters approving anything. If you are required to provide COBRA, then it's probably already in your contract with the carrier.

[Guest benefitsmom]

Your first post sounds like you want to be able to cut them off at 60 days. Am I correct?

What do your notices, SPD, etc. say now? I think if they require enrollment within 60 days you should be OK. (Oriecat has pointed out the problem in the court case was that the documents didn't give a deadline.)

Not many insurance companies will permit more than 60 days (will any?)

Do NOT put that the enrollment period is a "minimum of 60 days" unless you want them to wait for 9 months, come up with a bad medical diagnosis, and then claim "I want continued coverage."

Now, if you WANT to give them more days, you can. But, if you're insured, find out whether your insurance company will agree, or you could end up self insuring the COBRA people. And I still would avoid "a minimum of 60 days." Pick a number and administer it the same way for all.