Dependent choice between COBRA or Retiree plan

[Guest Nautical]

Background:

Retiree medical ppo plans allows dependent coverage

COBRA dependent premium cost is less expensive than retiree dependent premiums

An employee who recently retired has decided to drop his spouse coverage since the COBRA rates are less expensive than retiree dependent premiums. Once the 18 months end, could the spouse automatically be added as a dependent back on to the retiree plan? Is that considered a qualifying event? Or would she need to drop COBRA during open enrollment to be placed under the retiree's coverage before the 18 months are completed?

[Mary C]

Our retiree plan does not allow addition of spouses to coverage unless they lose other employer coverage, or the retiree is newly married. If retiree and/or spouse do not elect retiree coverage at the date of retirement, they cannot enroll later. What does the SPD and plan document say?

[Guest Nautical]

To answer your questions, our retirement plans allow the dependents to be covered through another employer or medicare. In those cases, our retirment plans are generally secondary. Each open enrollment, the retiree can add or remove eligible dependents and elect which level of coverage (three plan level choices: larger deductible, lower deductible, higher copay, lower copay, etc). Of course open enrollment changes does not trigger a COBRA notice.

The recent retiree dropped his wife (election form completed to enroll in retirement plan), so she lost her coverage. In her particular case, she does not have coverage through another employer. She elected COBRA for 18 months. If her 18 months occurs during the calendar year, I am assuming she must wait until open enrollment to enroll in the retiree medical plan or need to drop her COBRA prior to reaching the 18 months (so she doesn't loose coverage)? your thoughts?

[Jacmo]

You've got a little bit of adverse selection going on.

Depending on your plan's open enrollment requirements and other coverage requirements (per Mary C's post), the spouse should be able to come back in at open enrollment, at the 12 month or 24 month mark.

It seems your plan needs tightening up, both as to entry and other coverage rules, and more accurate COBRA rating.