can COBRA past paid premiums be changed?

[ester50]

Hello,

Is the administrator allowed to change past paid COBRA premium rates (and without notice)?

For example, if our plan year runs Sep - Aug.  Premiums had been $1000 per coupons/notice.  Faithfully paid for the past year 2017 Sep year thru Aug 2018.  Everything is fine, insurance is fine.  New COBRA premiums are noted for Sep 2018 going forward, say $1500, okay. 

But can they/administrator also change the past premiums?  That is, they now, along with new forward rates, say COBRA premiums for past "2017 Sep - Aug 2018" is changed to $1100.  (without notice, just changed history in online billing)

And then either (a) ask for top-up payment for the past year of paid premiums, or (b) reassign your past payments and claim you were thus short a few months back and attempt to cancel your health insurance back to that date?

Yes, this happened to us.  And seems just wrong.  So, are past paid premiums allowed to be changed?  A pointer to any relevant official documents/paragraphs on this is appreciated to.

Thank you.

 

[Chaz]

I don't believe there is any specific guidance on this.  If the employer made a mistake when it calculated the applicable COBRA premium (which appears to be most likely scenario in your case), it clearly could increase the premiums going forward but doing so retroactively would be very, very aggressive. 

You should probably consult with an attorney on whether you should decline to pay the increase.  There is a good chance that if you do decline, the employer would not attempt to collect the outstanding amounts or cancel your insurance until the applicable COBRA period is up. 

[rr_sphr]

Per our TPA for COBRA, the IRS states that you may only be able to pass along a rate increase to your COBRA continuees once in a 12 month (determination) period.   Now I dont' have a link or cite for this, but if the employer increased in in 9/18 going forward, i wonder if the $1100 would be a 2nd increase in a 12 month determination period.  Was there also an increase for 17-18 that got it to $1000? It would be interesting to know the timeline of increases, not just one or two years.

[Jessie916]

The same thing happened to me.  My former employer uses an administrator and when I received an erroneous increase of 33% they did an audit and now they say I owe $500 for past premiums.  I have never missed a payment or paid late.  Have there been any updates to this thread.

[leevena]

Ester50, I understand your frustration but your employer does have the right to collect these amounts even when they miscalculated the costs.  Yes, you could hire an attorney, as suggested above, but to what end?  Your legal fees could easily equal or surpass the past premium amount, and you would still owe the past due amount.  

[jpod]

If it is any consolation I don't see a legal basis for them terminating your COBRA coverage if you don't pay PAST amounts which they claim are due as a result of their mistake.  They may have a case strong enough to sue you for the past amount, but that doesn't mean you need to give up without a fight.  Talk to a lawyer.

[leevena]

3 hours ago, jpod said:

If it is any consolation I don't see a legal basis for them terminating your COBRA coverage if you don't pay PAST amounts which they claim are due as a result of their mistake.  They may have a case strong enough to sue you for the past amount, but that doesn't mean you need to give up without a fight.  Talk to a lawyer.

I 99% disagree with your comment regarding a legal basis for them terminating the cobra coverage, so please provide proof.  But am open to learning how/why you believe it is illegal.

This is a relatively simple relationship.  I assume there is a carrier here, and they have a responsibility to provide cobra coverage to ex employee.  The administrator responsible for sending out the cobra info and for billing made the mistake, not the carrier.  As far as carrier is concerned, the coverage is not being paid.  

[jpod]

I don't have any proof beyond the stated facts, the law and some common sense.  First, we don't know if this is fully insured coverage or employer self-insured.  If fully insured, I would assume the insurance company has been paid in full or this wouldn't have taken so long to come up, in which case the employer/PA has gone out of pocket and wants to collect the shortfall.  In that case, it seems to me the participant has not failed to pay timely as described in 4980B(f)(2)(B)(iii).  If it is self-insured, same answer:  PA billed $X, participant paid in a timely manner.  Now PA is saying "we should have billed you 2x$X, so you owe us another $X."  I don't see how the refusal to pay that extra retroactive $X results in a failure to pay timely as described in and contemplated by 4980(f)(2)(B)(iii).  If there is something in regulations or case law that contradicts this, so sorry.        

[leevena]

1 hour ago, jpod said:

I don't have any proof beyond the stated facts, the law and some common sense.  First, we don't know if this is fully insured coverage or employer self-insured.  If fully insured, I would assume the insurance company has been paid in full or this wouldn't have taken so long to come up, in which case the employer/PA has gone out of pocket and wants to collect the shortfall.  In that case, it seems to me the participant has not failed to pay timely as described in 4980B(f)(2)(B)(iii).  If it is self-insured, same answer:  PA billed $X, participant paid in a timely manner.  Now PA is saying "we should have billed you 2x$X, so you owe us another $X."  I don't see how the refusal to pay that extra retroactive $X results in a failure to pay timely as described in and contemplated by 4980(f)(2)(B)(iii).  If there is something in regulations or case law that contradicts this, so sorry.        

My point was not to cause problems, it was to help the poster.  Your statement above states you don’t see a legal basis for them to cancel, so the poster may walk away from this with the belief they have a legal right to reinstatement, which they do not.  Regardless of anyone’s opinion, the cobra recipient did not pay on time.

[jpod]

They haven't canceled her coverage, so there is nothing to reinstate.  What I am anticipating is the probability that they would cancel the coverage if she doesn't fork over the $500 for past premiums, and I am saying that I don't think they have a legal basis for that.  In any event I did recommend she talk to a lawyer.  You are recommending that she pay the $500 without thinking about it.  There we differ.

[leevena]

5 minutes ago, jpod said:

They haven't canceled her coverage, so there is nothing to reinstate.  What I am anticipating is the probability that they would cancel the coverage if she doesn't fork over the $500 for past premiums, and I am saying that I don't think they have a legal basis for that.  In any event I did recommend she talk to a lawyer.  You are recommending that she pay the $500 without thinking about it.  There we differ.

My bad, I thought the coverage was already cancelled.  Be that as it may, they can very well cancel for nonpayment.  I am not recommending anything because I do not know the past due amount, what their current medical situation is (claims) and how much time is left on cobra.  This is not a great vehicle for discussing complex issues like this situation.