Late Cobra notification and ensuing penalties

[Guest A Gold]

Can an employer terminate your health care coverage prior to your last day of employment? When does the employer have to notify an ex-employee of any COBRA options available? Are there any monetary penalties to an employer for late or no notification of Cobra to an ex-employee? Who can collect the penalties?

[Mary C]

1. You really do not provide enough information to answer if your coverage can be canceled prior to your last day worked. For example, if your coverage was contributory and you didn't make the necessary payments or deductions, or if the plan is terminated for all employees, yes, the employer may legally cancel your coverage before your last day of employment.

2.Employers are required to notify the COBRA administrator within 14 days of an employee's termination, reduction in hours, or other COBRA event. The COBRA administrator then has 30 days to notify the employee of their right to COBRA coverage (total of 44 days) by sending notice to the last address on record for the employee.

3 & 4 Yes, there are monetary penalties if a notice is not sent timely. However, the ex-employee usually has the burden of proof that it was not sent. The ex-employee is usually the one entitled to the penalties, but usually only after he/she sues the ex-employer. Monetary penalties generally are not payable if the employer can prove that they followed their regular routine of notifying the ex-employee in a timely manner and notice was sent, if the ex-employee moved and didn't tell the employer, or sometimes if the employer corrects the oversight and makes the ex-employee whole within a certain period of time. This is a very complicated part of COBRA and is usually decided in the courts and I have seen courts not grant monetary penalties when there was no harm to the ex-employee.

You should probably check your specific situation and circumstances with your local Department of Labor office before going to an attorney.