COBRA for a participating employer who ceases to offer coverage?

[Guest MikeD]

Curious if anyone has any insight into tis issue.

A group health plan has 2 employers who are under common ownership. Upon renewal, one of the companies (it's a separate entity that operates separate from the other) has decided to drop the plan (no longer offer benefits to its employees). The second company is continuing to offer a plan.

Does the second company have to offer COBRA to the first company's employees? I know that, if a company discontinues a plan, COBRA doesn't have to be offered. Does the continued existence of the plan (without the first company's employees) trump this rule?

Thanks so much.

[KED]

What is the COBRA qualifying event?

[leevena]

Curious if anyone has any insight into tis issue.

A group health plan has 2 employers who are under common ownership. Upon renewal, one of the companies (it's a separate entity that operates separate from the other) has decided to drop the plan (no longer offer benefits to its employees). The second company is continuing to offer a plan.

Does the second company have to offer COBRA to the first company's employees? I know that, if a company discontinues a plan, COBRA doesn't have to be offered. Does the continued existence of the plan (without the first company's employees) trump this rule?

Thanks so much.

I am a little confused and need some clarification. Are you saying there are two employers under one contract or are there two seperate companies with their own contract.

If there are two employers with two contracts then the second employer does not have to offer cobra.

If you have one contract for the two groups, you may have a variety of other problems, such as participation levels, if the contract is still valid, possible 105 discrimination if you are self-funded, rates may be no longer valid, and others. I would begin with who is the plan sponsor. This is usually one of the employers.

[Guest MikeD]

Curious if anyone has any insight into tis issue.

A group health plan has 2 employers who are under common ownership. Upon renewal, one of the companies (it's a separate entity that operates separate from the other) has decided to drop the plan (no longer offer benefits to its employees). The second company is continuing to offer a plan.

Does the second company have to offer COBRA to the first company's employees? I know that, if a company discontinues a plan, COBRA doesn't have to be offered. Does the continued existence of the plan (without the first company's employees) trump this rule?

Thanks so much.

I am a little confused and need some clarification. Are you saying there are two employers under one contract or are there two seperate companies with their own contract.

If there are two employers with two contracts then the second employer does not have to offer cobra.

If you have one contract for the two groups, you may have a variety of other problems, such as participation levels, if the contract is still valid, possible 105 discrimination if you are self-funded, rates may be no longer valid, and others. I would begin with who is the plan sponsor. This is usually one of the employers.

Two employers who are under the same contract. There is common ownership among the companies.

The group meets participation requirements and the rates are still valid. The only question is whether the first company's employees have to be offered COBRA. I can't find anything definitive. I could certainly argue that the first company has ceased to maintain a plan as they have decided to discontinue participation in the plan.

[jpod]

Under the facts which you presented there is no qualifying event triggering COBRA rights. Different issues under ACA starting in 2015 if it's a large employer.