Induce former EE to forego COBRA?

[J Simmons]

An ER has 25 EEs, has a group health policy for the EEs, and is in the midst of annual renewal of the policy. Unbeknownst to the ER, the agent just found out that an EE laid off last week has been rated as a bad health risk and would spike the group premium considerably. So much so, it would be much less expensive for the ER to pay for an individual policy for the former EE for a year than it would be the extra group premium if that former EE elected COBRA and paid the group rate himself.

Is there a prohibition to offering an EE an inducement to forego COBRA, similar to the prohibition against inducing someone to forego ER provided health coverage and go on Medicare primarily?

[Don Levit]

John:

Good question.

According to the HR Training Center, the "Choice Method" is one of the alternative coverage options.

Here, the person is given the choice between electing COBRA or waiving COBRA in favor of some other, different coverage. Go to:

http://www.hrtrainingcenter.com/readArticl...amp;RID=1010100.

Don Levit

[J Simmons]

Thanks, Don.