COBRA & Short Term Health Plan

[Guest jac]

An employer has a short term training program (90 days) and provides the short term employees with a 90-day health plan.

The plan appears to be covered by COBRA--group health plan for employer with 20 or more employees--but the application of COBRA to this plan seems strange (for lack of a better word).

It appears that if an employee quit the training program or was fired on day 89, and therefore had a qualifying event, the employee would be entitled to 18 months of COBRA coverage. While seemingly the correct answer, it seems odd for an employee to get the 18 months of COBRA coverage from a short term 90-day health plan.

Any thoughts? Am I missing an obvious exception under COBRA?

Thanks.

[oriecat]

So I'm confused... what happens at the end of the 90 days? Are they transitioned to regular employees on a different health plan?

[Guest jac]

So I'm confused... what happens at the end of the 90 days? Are they transitioned to regular employees on a different health plan?

Sorry about that.

At the end of the 90 days an employee either finishes the program and terminates employment or is transitioned to regular employment on a different health plan (as you guessed).

[leevena]

The 90-day training period sounds like a union type of program. Is this part of a barganing plan? Also, you mention "It appears" in your description. Why do you say "appears", what does the plan documents say about this issue?

[Guest jac]

The 90-day training period sounds like a union type of program. Is this part of a barganing plan? Also, you mention "It appears" in your description. Why do you say "appears", what does the plan documents say about this issue?

The program is not part of a bargaining plan.

I said "appears" because I am trying to determine whether there is an exception applicable here which would mean an otherwise COBRA covered plan is not subject to COBRA.

This is an fully insured program, and I haven't seen the policy.

[leevena]

Sorry for the delay. I don't see any reason why this 90-day plan would not be subject to COBRA. I know it sounds strange, but let's look at it from a different perspective. If the same employee was in a regular health plan and left on the 89th day, they would be eligible for COBRA, assuming all other requirements were met. Only reason I asked about the union issue was due to the "appears" comment in your question.

[LRDG]

The short term health policy I was involved in developing is an individual policy intended as a 'bridge' policy, (not my terminology), offering coverage to otherwise uninsureds between jobs and/or pending eligibility under a new ER group plan, or unaffordable COBRA premiums during a brief period between jobs or unemployment, etc.

The individual policy is not subject to COBRA because it's an individual policy, not a group plan.

The state DOI issue a HIPAA exemption because the nature and purpose of the short term health policy was to provide coverage during brief time when ER coverage was unavailable.

The policy could be issued in increments of 30, 60 and max 90 days, allowing 2 additional 90 day policies following the first, none of which covered a pre-existing condition. Premiums ranged from just over $100 for individual for 30 days, it was affordable, with rates priced to exclude pre-ex conditions. A dx made during the first policy period was considered pre-ex under the 2nd policy period, claims denied in policy period #2 for a dx made during policy period #1.

[Guest jac]

Thanks for the replies.

This is definitely a group health plan, not an individual policy.

I do think the plan is subject to COBRA, but still find strange the outcome that an employee could get 18 months of coverage through COBRA under a 90 day short term/limited duration plan.