Employer Held Hostage

[pr2222]

What options does an employer have if a participant (i.e. either a current employee or a COBRA person) refuses to complete an application. Say a small employer wants to shop carriers but an individual refuses to complete the carrier's application. The carrier will not provde a quote unless everyone completes an application. So what can the employer do in this case? It does not seem right that one person can hold the employer hostage in this situation but, again, the carrier will not provide a quote unless everyone turns in an applcaiton. Does anyone have a good solution to this situation?

Thanks.

[Guest sniffles]

What options does an employer have if a participant (i.e. either a current employee or a COBRA person) refuses to complete an application. Say a small employer wants to shop carriers but an individual refuses to complete the carrier's application. The carrier will not provde a quote unless everyone completes an application. So what can the employer do in this case? It does not seem right that one person can hold the employer hostage in this situation but, again, the carrier will not provide a quote unless everyone turns in an applcaiton. Does anyone have a good solution to this situation?

Thanks.

Do you have a broker who shops around for your insurance? It seems to me that you shouldn't have to complete an application for each employee in order to get a quote.

[pr2222]

What options does an employer have if a participant (i.e. either a current employee or a COBRA person) refuses to complete an application. Say a small employer wants to shop carriers but an individual refuses to complete the carrier's application. The carrier will not provde a quote unless everyone completes an application. So what can the employer do in this case? It does not seem right that one person can hold the employer hostage in this situation but, again, the carrier will not provide a quote unless everyone turns in an applcaiton. Does anyone have a good solution to this situation?

Thanks.

Do you have a broker who shops around for your insurance? It seems to me that you shouldn't have to complete an application for each employee in order to get a quote.

Yes. There is a broker involved. For small groups, the carriers still do underwriting and, therefore, will not release a quote without the applications.

[Ron Snyder]

As a business owner who offers a group health plan, most of my employees are grateful. I have one employee with serious health problems who is covered under his spouse's health policy, but because he signed the waiver with explanation it does not count against us.

Most small group carriers require 100% participation on groups with less than 10 employees (we have 9). However, they count as covered those who are covered through a spouse's health plan.

Therefore, your choices are:

1. Make him sign a waiver including a written explanation of his/her refusal in writing.

2. Fire his/her ass.

[Chaz]

That might work with an active employee but not one on COBRA.

[Guest taylorjeff]

In essence I agree with Vebaguru. AS far as COBRA, to my knowledge, the COBRA continuee is to be given the same right as an active. And, that includes the right to fill out a new application, so they can continue coverage.

If it is a COBRA person, maybe appeal to common sense. Ie, the rate you're paying now is X, We are hoping to lower that cost by Y%. Since you are paying the premium, this would save you Z dollars a month.

[pr2222]

A lot of lookers but few responses. First, the person in question is a former employee. Nevertheless, ERISA precludes an employer from taking action against an employee for ascertaining a claim or for enrolling in a health plan.

[GBurns]

Based on what you posted, this former employee is neither "ascertaining a clam" nor "enrolling in a health plan", So what is the relevance of your comment ?

Are you sure that the insurance company requires an application from former employees ? All the documents that I recall only require applications from current employees.

Is the former employee aware that if there is no employer health plan because the employer cannot get coverage because of the inability to provide the required information, then there would be no COBRA coverage?

In any case the problem seems to be either a lack of understanding by the former employee or more likely a poor explanation regarding the requirement of the application or the waiver.

[Guest sniffles]

I would contact the Cobra person (by phone) to find out what the problem is. Let them know that in order for him/her to have the best health insurance coverage at a good price that the company HAS to have their application otherwise the insurance plan might end therefore they could lose their COBRA insurance if a plan ceases to exist. I would also inform them that there is a possibility that their COBRA price could decrease with the new quote and could quite possibly INCREASE if alternative health insurance is not acquired.

Unless this COBRA person just absolutely LOVES the current coverage, I don't see a reason for them NOT to provide the application. If all else fails and they do NOT provide the application, surely you have their old application with the information listed that you could give to the broker?????

[K2retire]

If all else fails and they do NOT provide the application, surely you have their old application with the information listed that you could give to the broker?????

Have you really succeeded in training your clients to keep that sort of thing? If so, please share your method with the rest of us!

[Guest sniffles]

We are self-insured and I keep a copy of everything that is sent to our TPA.

[pr2222]

You guys are missing the point.

There really can be a couple of situations. Under one scenerio, the former employee is hacked off with the employer and is being uncooperative on purpose. So the former employee does not care that the current coverage might cost him or her $ 100 or $ 200 per month since it could be costing the employer $ 1000s per month. That is, a new carrier maybe able to save the group $ 1000s per month.

Another situation is that an individual could be in the election period. As you know, the employer (as plan administrator) has 44 days to get the notice out, the person has 60 days to elect and 45 days to pay. So the person may have no intention of electing COBRA so they simply disregard the employer's request to complete the application and yet the employer can not assume the person is not going to elect the coverage.

The "bottom line" is that appealing to the person's better being to help the employer is not working for whatever reason. I like the idea about the old application but one carrier is not going to accept an old application that is outdated especially if it is from another carrier. So, again, it looks like the employer could be stuck with the current carrier because the employer can not submit applications for everyone that may be eligible for the new coverage.

[Guest sniffles]

The "bottom line" is that appealing to the person's better being to help the employer is not working for whatever reason. I like the idea about the old application but one carrier is not going to accept an old application that is outdated especially if it is from another carrier. So, again, it looks like the employer could be stuck with the current carrier because the employer can not submit applications for everyone that may be eligible for the new coverage.

When you explain the situation to the broker, if this is a person who has not elected COBRA yet and just is in the window to elect, I would think you could just give the date of birth and sex to the broker - that's all we did.

You really need to find out EXACTLY what information they HAVE to have to give you the quote. When we were looking at another TPA for quotes we only provided dates of birth, sex, how many dependents, and what coverage they chose either Employee Only or Family.....no names OR social security numbers were given. We also gave zip codes to make sure our provider network would have plenty of coverage.

If the employee is no longer working for you and is in the COBRA window period, just give them the information you had at the time they left - dob, m/f, coverage.