Hung out to dry

[Guest erisafried]

I am wondering if anyone has any secret techniques they'd care to share about the following situation.

Company A and Company B are members of a controlled group; both have group health plans. Company A mostly winds up its operations and lays off all of its employees while Company B continues humming along. After a while, Company A's group health plan ends up with a few remaining COBRA beneficiaries but no active participants, and the carrier providing the underlying insurance policy decides to cancel the policy.

Under the COBRA regs, we know that the Company A COBRA people are supposed to be picked up by Company B's plan. What if Company B's insurance carrier tells the HR people to go jump in the lake and won't take the Company A COBRA people? This exposes the group to all sorts of unpleasant liabilities (lawsuits, excise taxes, and ERISA penalties).

Short of wrapping the Company A COBRA people in bubble wrap and locking them in the closet for the duration of their COBRA periods (for their own protection, of course), what can we do to twist some arms at Company B's carrier?

[Guest jhall]

If there is no legitimate exception to the COBRA obligation / requirement here (I was thinking if the coverage / network area were too far removed there might be some exception), then I would call the Insurance Commissioner with oversight for the uncooperative carrier.

[Guest KAL]

Hello

Have they told you to jump in lake? I would always leverage the current business needs with my vendor. If they have your business with company B and you are giving them more business, why would they say no? I would also mention that there may be other business needs or accomodations that that vendor may be approached with so they need to help you get through this situation.

How much are you spending with that vendor? You are already paying them so you should push them hard to accomodate you and your business needs.