COBRA Continuee Uncooperative

[J Simmons]

An ER with more than 20 but fewer than 100 EEs has a few former EEs that have elected and currently are on COBRA continuation. The group health policy year is going to end on 9/30, and the ER is shopping for quotes for the next policy year. One of the COBRA continuees is refusing to provide the info required by health insurers before they will issue quotes. Can the ER send this obstinate COBRA contiuee a notice explaining that if she does not provide the info in a timely manner, that her COBRA continuation coverage will end due to failure to cooperate?

[QDROphile]

What would happen if a covered employee were to refuse to provide the information?

[J Simmons]

The insurers from which quotes are being solicited have indicated they will not issue a quote for a group policy unless they have the info as to both active employees and COBRA continuees.

[Guest Taxaholic]

If I recall the rule is that COBRA is offered only so long as the ER offers coverage. I know this doesn't really help, but tell the Ex-EE that if they don't provide the information, the carrier won't quote, then the ER doesn't buy a plan and Ex-EE losses coverage.

Not a great bluff, but maybe a little explanation would get some understanding from Ex-EE.

[QDROphile]

You did not really answer my question, but here is what I was getting at. Since COBRA only continues coverage that could be maintained but for the qualifying event, if regular participants (employees) become ineligible for coverage if they fail a condition, a person on COBRA continuation would lose coverage for failure of the same condition. If an employee participant fails to provide the information, what would happen to that employee?

[J Simmons]

QDROphile, that situation--an active EE not providing the information--has not occurred in the history of this ER. So don't know what would happen.

[leevena]

John...could you add some additional information? If I remember correctly, you are in SoCal with me. So is this group in CA? Is it small or large group? What information is the carrier asking for? Thanks. Lee

[J Simmons]

Hi, leevena, I'm not in California (by November I'll wish I was).

The insurer wants a signed application that gives medical history, or a signed waiver, from every active and COBRA-continuation former EE. It includes medical history information. My state has a 2-50 small ER rule that requires insurers let such an ER into a pool without rating the small employer separately, but the ER has traditionally been able to get better premium quotes by being rated and thus has in years past not taken the non-rated small ER pool option.

We're thinking of sending the uncooperative COBRA continuee a notice specifying that if she does not provide the information within 10 days, the ER will file an action in federal court to have her uncooperation declared a forfeiture of her right to further COBRA continuation (and for damages for each month beginning with October until such a declaration is issued). We do not want to take legal action, but the insurance agent estimates that there's a $5k delta per month in the premiums to the ER.