Can increased premiums be passed on to COBRA qualified beneficiaries?

[Guest SCUDDESLER]

An insured (as opposed to self-insured) group health plan has negotiated a new, higher premium rate with its insurer. May the plan, as a result, pass the premium increase on to qualified beneficiaries who are already receiving COBRA continuation coverage? If so, what notification must be provided to the qualified beneficiaries?

[Guest ScottN]

I believe the regulations allow increases in rates charged to Cobra participants once per 12 month determination period. However, the determination period and health plan year may not be the same.

If this "negotiation" is related to a change in plans, it may be allowable to change the Cobra rate during the determination period.

[jeanine]

We've been trying to figure this out on some self-funded groups. What we finally decided is that once the 12 month determination rate is set it may only be changed if the plan was charging less than the maximum it could have been charging.(for example, if the plan calculated it could charge $200 per month per individual enrollment but only charged $150, it could increase this up to $200 but the change could only occur once in that 12 month period.) If the benefits level changes for the non-COBRA group and this results in an increase in premiums, then this can be passed along as well during the next 12 month determination period. We have our COBRA determination period linked to our renewal date so there should be no level of benefits changes outside of the determination period. To answer the other part of your question, I believe COBRA beneficiaries need a minimum of 30 day advance, written notice that the premium is increasing.

[Guest jmcard]

We just had this situation and got conflicting information from the Department of Labor. I am interested in a way to get a definitive answer to the following questions.

1. How is a determination period defined? Is it always the renewal period for the benefit plan?

2. Our state requires a 15 day notice to the employees for any change in benefits. Can we send a notice to the COBRA beneficiary as to the employee? Thanks