Complex COBRA dilemna after layoff

[Guest Lisssi]

A friend of mine asked me for advice on a complicated problem she is having with her own COBRA coverage. She was laid off from a company that as part of the layoff package gave her two months salary and told her that during that time period her health coverage would be continued. After the two months she would be able to elect COBRA if she wished. The whole layoff was quite confused as the only HR person for the company was sick for the last few days of the laidoff workers' employment.

Six weeks later my friend had several health claims denied and it turned out that her company had meant that upon termination she could elect COBRA and they would pay the COBRA premiums for two months. So, she was without health coverage but was never notified of her loss of coverage. She can still elect COBRA now (though since she's about to move out of the service area probably won't) but seems to be stuck for the expenses she incurred while believing herself to be still covered by her insurance.

Obviously the company handled this very badly, but are they actually in violation of COBRA or other regs in any way? Or is the only possible legal argument here a breach of contract? She isn't sure whether she had any of this agreement in writing-- though she remembers signing a few waivers before she left the company.

Thanks,

Liss

[KIP KRAUS]

Lisssi

I don’t know how sophisticated your friend’s employer is, but typically when a person is laid off and a benefits package goes with it they receive this information in writing. It is not uncommon in a lay off situation for the employer to say that they will pay the cost of COBRA for a period of time.

If your friend signed waivers, I’m guessing she must have had something in writing about benefits and pay. The employer would have copies of anything that was put in writing. Have her ask for it.

[Mary C]

You and your friend should be aware that COBRA coverage is continous from date of termination. So if she elects now, she would be covered from the date of her layoff and her expenses would/should be covered. However, she only has 60 days from the date of layoff or date she received notice to in which to elect it. If its after 60 days, she's no longer eligible to sign up.

The company's obligation is to send her a notice of her right to elect COBRA within 44 days of her date of termination. If they did that, they are not in violation of COBRA. They are not obligated to notify her that the coverage was termed or that her 60 day election period has expired.

Like Kip says, if she signed something, it was all probably in writing.