Termed COBRA for non-payment.....

lnelson

... I just received the April premium payment of $236 on 5/11/05 which was due by 4/30. The post mark was 5/10/05 and check date was 5/9/05. I had just termed the coverage on 5/10/05 for the non-payment and sent cert mail term letter to participant. Today before coffee I get a call from the participant saying that he thought he had a 45 day grace period and that we NEED to reinstate his coverage. I informed him that the only payment that has the 45 days grace period is the first payment which he made on the last day of the grace period and all periodic payments are due on the 1st of the month with a 30 day grace period. He has called the insurance company to reinstate him and was informed it is the ER's discretion to do so. How would you handle this?
I have had many dealings with this person and do not wish to have anymore but I also know he needs this coverage. I am torn please give me some feed back.

Thank you.
Lisa

marc

If it is truly discretionary, I would probably cut them a break with some stipulations regarding future premium payments.

Have you informed the EE of your policy regarding premium payments? If not, perhaps a certified letter indicating that all payments are due on the first day of the month and that no further grace period will be allowed. State that said premium must be in your office on that day, not placed in the mail on that day.

If the premium is not paid, coverage will be immediately terminated, with no further discussion.

lnelson

[font size="1" color="#FF0000"]LAST EDITED ON 05-12-05 AT 12:54PM (CST)[/font][br][br]Prior to election of coverage the ee & I had many discussions on the payment policies, monthly statements were sent cert mail stating due date and grace period. They also stated that payment received after grace period or non-payment would be cause for coverage termination.

My dilemna is that I have dealings with this person and know his situation but had I had a TPA administering the plan it would be termed no questions asked. Due to my other dealings with this ex-ee I am leaning toward keeping it termed but my compassion for his situation has me leaning toward reinstatement. HELP all I have spoken to say to term yet I feel that sort of cold blooded even though I am following the regulations of the COBRA plan. (Maybe that's why its named after a snake)

marc,
Due to his recent late payment can we make a new arrangement that payments have to be in our hands no later than the 5th day of the month of coverage? If we do this does it set a precedent for all others?

Lisa

Sorry I posted to the wrong thread.

marc

You need to be consistent.

In this case you would be setting a precedent that would allow one reinstatement if the payment was one day late with new payment terms.

Thereafter, payments would be due on the 5th, with allowance for weekends.

Amend your policy if necessary.

sandra_d

If you do reinstate, I don't think you can amend the "grace period" - I believe it would need to follow the COBRA laws ... if the due date was the 5th, then he'd still have the 30 days grace period, essentially making the real due date the 5th of the following month.

I am a sucker for sad stories from dawn until dusk, but I have learned that it is best to follow your policy/practices ... if you feel comfortable that he had all the information he needed to really know when the payment was due (if nothing else, if you have a good COBRA notice it'd be very clear in there), I'd stick to the cancellation.

(I'm really not a heartless person!)

kcovalt

I had an employee who failed to make his initial cobra payment on time. I called his home phone and left a message a couple of days before the payment was due. He never returned my call. Two weeks after the deadline, I terminated his insurance for non-payment. He called me and was very angry that I had cancelled his coverage. I spoke with our inhouse attorney and he said that we could not make an exception for this person because that would create a new precedence and I would have to make allowances for anyone who was late. Our attorney was also not happy that I had called to remind him that his payment was due. With the high cost of insurance and the fact that people who enroll in COBRA are usually high users of the coverage, it is not in the best interest of the company to bend rules to allow them to continue coverage when they have missed mandated deadlines. If you put the ex-employees needs above the company's rules, you are not doing the job you were hired to do.
I know this may sound harsh, but our position requires us to look out for the company's best interest.

lnelson

Thanks marc & Sandra_d,

We have decided it best to follow our policy & procedure rather than change our current policy.

So I am a heartless person cause his COBRA will remain terminated.

Lisa x}>

mushroomHR

You aren't heartless. This person knew the rules going into the game. If they can't follow them, it isn't your fault. Don't set the precedent--do what your policy dictates.

Don D

kcovalt, UT and I are in agreement. We all know that we cannot run an HR department with emotion- based decisions. It ain't about being heartless or cold or cruel. And the point about obligation to protect the company's assets is right on. Insurance usage is not exactly a contributor to the bottom line. There are social service jobs available at some of the agencies offering them.

lnelson

And the saga continues....

The ex-ee just called to speak with the VP of the company because I termed his COBRA and there seems to be a discrepancy according to him on the grace periods. I have checked over and over again all documents I gave and sent to him but do not see any discrepancies. He is now saying that by not having his COBRA he might as well be dead.....this of course was left in voice mail to be heard over and over again by VP and myself. He will await a response from VP.

I know he is trying to put blame on us(me) by giving us(me) the guilt trip to reinstate but I keep going back to if the COBRA coverage was soooo important to him why was it late by almost 2 weeks.

Just venting...but any words of encouragement are always welcome.

Lisa

pork1

LISA: You are on the right track, not sure about your insurance plan, but ours is self-insured, which means that the plan participants have each a stake in the cost of the plan. One high roller effects the cost to all employees and the company. You have an obligation to not only think of the companies' cost, but also the cost to all of the plan participants.

The plan participants expect you to administer the plan by the "rule" and not to play favorites with their pocket books. You will be spending their money (in premium cost)when you allow someone to cross over the rules and apply claim cost to the burden of the whole for administration, to which you personally have to live with your decision.

Your VP will put this one to bed or he should not be a VP!

PORK

Whatever

It is obvious that this ex-ee is not willing to take responsibility for their actions. And, you have no responsibility for their actions (or lack of actions). You did your job. Your did it well. Leave it at that.