Lay Off and Health Insurance

If the employer has less than 20 employees, including pro-rated part-timers, he is not required to offer COBRA benefits. Also, if the employee is discharged for gross misconduct, he is not eligible for COBRA. But you have decribed it as a "layoff."

There may be some confusion about "terminating" employee health benefits. It is probably true that the employer has "terminated" HIS contribution to your health benefits. This simply means that he is no longer required to pay the premium (or any part of the premium he was paying). This does not mean that you have lost eligibility for coverage under the plan. It does mean that in the future you will have to pay the entire bill yourself, under COBRA. Don't panic.

Health plans ARE required to give you a 30-day notice before cancelling a policy. But in this case, there is no reason to believe that the health plan itself has cancelled your policy. You do have to shift from the employer payment (if any) to self-pay under COBRA.

The health plan should still cover you, even retroactively. Here is the process.
The following is from the US Dept of Labor, who regulate COBRA:

"Employers must notify their plan administrators within 30 days after an employee's termination or after a reduction in hours that causes an employee to lose health benefits.

The plan administrator must provide notice to individual employees of their right to elect COBRA coverage within 14 days after the administrator has received notice from the employer.

You must respond to this notice and elect COBRA coverage by the 60th day after the written notice is sent or the day health care coverage ceased, whichever is later. Otherwise, you will lose all rights to COBRA benefits.

...The initial premium payment must be made within 45 days after the date of the COBRA election by the qualified beneficiary. Payment generally must cover the period of coverage from the date of COBRA election retroactive to the date of the loss of coverage due to the qualifying event. Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments. Payment is considered to be made on the date it is sent to the plan. ...

Spouses and dependent children covered under your health plan have an independent right to elect COBRA coverage upon your termination or reduction in hours. If, for instance, you have a family member with an illness at the time you are laid off, that person alone can elect coverage. "

What this means:
There can be long delays before you officially get COBRA coverage, but if you are eligible for it, and if you "elect it " on the form sent you by the Health Insurance provider, you are covered retroactively back to the date of termination. Based on the information I have, you will be covered.

Before attempting legal action, I advise you to contact the health insurance provider to notify them that your spouse has been terminated, and ask them what their procedures are for COBRA. They may not be willing to do anything until the employer notifies them, but you may be able to get them to call the employer about it. (The employer is responsible for notifying them.) Ask them for a COBRA continuation of Coverage form. By alerting them you also give them "actual knowledge" of the Qualifying Event (lay-off).

You should also call the employer -- especially the HR department, if there is one -- and ask them to notify the health plan. They have 30 days to notify the health plan. If the employer does not have 20 full-time employees, there is a "mini-COBRA" law in effect for Massachusetts employers with from 2 to 19 employees who offer group health insurance as an employment benefit. For these companies the procedures are generally the same as those under COBRA.
MA Mini Cobra:

http://www.mass.gov/?pageID=ocaterminal&L=5&L0=Home&L1=Consumer&L2=Insurance&L3=Health+Insurance&L4=Health+Care+Consumer+Guides&sid=Eoca&b=terminalcontent&f=doi_Consumer_css_health_minicobra&csid=Eoca

posted by Kevin McGann  |  Sep 18, 2010 2:55 PM [EST]