COBRA eligible but no loss of coverage?

[Guest morris]

Situation: Employee terminated back in June. Took Cobra dental but declined the health. Plan anniversary (renewal) is Jan. 1.

Our COBRA administrator is telling us that because the beneficiary is a current COBRA dental beneficiary, the beneficiary has the right to enroll in the health effective 1/1.

This doesn't sound right. There was no loss of health coverage to trigger COBRA eligibility for the employer's group health coverage.

Can anyone confirm/deny this position?

Thanks!

[leevena]

To make things easy for you, submit the application to your health carrier and let them tell the employee no.

[Guest SHaddon]

You have to treat COBRA qualified beneficiaries as similarly situated active employees. So if you would allow an active employee who was only covered under your dental plan add medical coverage during your open enrollment, you must allow the COBRA participants the same opportunity.

[oriecat]

Agree with above. This person is already on COBRA, they don't need to have a new qualifying event. They are changing what plan options they want to enroll in at open enrollment. They have the same open enrollment rights as your other employees.

[masteff]

The issue of open enrollment changes during COBRA is addressed in IRS Reg 54.4980B-5 Q&A-4©

[Guest morris]

After reading 54-4980B-5, it appears that a dental plan is indistinguishable from a health plan. In other words, they're both health plans for purposes of COBRA.

This seems to be a possible way to play the system a little bit. In other words, as a COBRA beneficiary, I can take the Vision plan and keep my options open if I ever need the Health plan. Right?

Thanks to all!

[leevena]

After reading 54-4980B-5, it appears that a dental plan is indistinguishable from a health plan. In other words, they're both health plans for purposes of COBRA.

This seems to be a possible way to play the system a little bit. In other words, as a COBRA beneficiary, I can take the Vision plan and keep my options open if I ever need the Health plan. Right?

Thanks to all!

I don't see how you could do this with the medical carrier...not being argumentative. So, when you find out from the carrier, please post the answer.

[Chaz]

Under COBRA, if similarly situated employees are given an open enrollment period in which they can change coverage, COBRA participants must be given the same opportunity to change coverage. This is clear black letter law and there doesn't need to be a new qualifying event.

The OP doesn't say whether upon renewal of the contract, participants can elect to change their coverage, so a clarification might help answer the question for sure.

[Guest morris]

After checking with 2 national COBRA TPAs AND the insurance carrier, they all agree: Because the employee is enrolled in dental, that makes them eligible to sign up for any other employee health benefit at open enrollment.

Thanks!

[GMK]

enrolled in dental ... makes them eligible to sign up for any other employee health benefit at open enrollment.

For (probably superfluous) emphasis, as Chaz notes in post #8, this is true for COBRA's if it is true for current employees. COBRA's are treated the same as similarly situated current employees, but they don't get something extra.