Mistaken Acceptance of COBRA Premium Payments

[Guest Mfcavo]

If a TPA receives and cashes a check for initial COBRA premiums and later finds out from the employer that the payment itself (or the election for coverge in the first place) was not timely, can the TPA just reimburse the ex-employee from its own account or does the acceptance of payment mean that coverage is effective - at least for the period covered by the payment.

[Guest Paul]

It all depends on how long it takes to discover the error. One could make an estoppel arguement if the person reasonably acted on the assumption they had COBRA coverage. On the other hand, a person does not go out and contract cancer simply because they have health insurance. A more practical answer is to immediately notify the person and give them a reasonable time (e.g. 30 days) to get other coverage. Of course the insurance company may bitch and not cover any claims incurred.