Third Party COBRA Premiums

[Chaz]

If a third party pays certain individuals' COBRA premiums, does that third party risk creating a MEWA or otherwise being deemed to be engaged in the business of insurance?  A specific example would be a hospital or other provider paying the COBRA premiums of certain of its patients, in effect in order to get reimbursement from the patients' insurer.

[leevena]

Yes they can, and the dirty little secret is they have been doing it for years.  I have provided a link to Tenet Hospital policy for your review.

 

https://www.tenethealth.com/docs/default-source/provided-without-financial-incentives/policy---comp-rcc_4-55_payment_of_patient_insurance_premiums.pdf?sfvrsn=740a2db7_4

[Roberta Casper Watson]

The MEWA acronym stands for Multiple Employer Welfare Arrangement.  The hospital is not doing that in its capacity as an employer, so there's no MEWA issue.  Also, I've never heard any suggestion that the practice constitutes the business of insurance.  And there's nothing in COBRA that restricts who can pay the premiums.