COBRA & Co. Dissolution

DTBRIMRIN

Our company is owned by 7 area hospitals (RI). They have decided to dissolve the company. Services will cease to be provided by December 1, 2002 & all employees will be either offered positions within the member hospitals or laid off. There is a possibility, due to legal issues, that the business "entity" will remain active. Two questions:

(1) If the business entity remains active, but terminates all provider services & contracts, is it mandated to offer COBRA to employees?

(2) Because the business is owned by the hospitals, are the hospitals, as owners, responsible to offer COBRA benefits after they put this company out of business?

bsa

Man-- this is so twisted!! You really need to rely on the carrier and your attorney to determine who's responsible. Sorry, I couldn't help, I don't think there is a simple answer.

NaeNae55

This one is really tricky, and I would guess that as long as the health plan was a stand alone plan (the plan was totally separate from the owner-hospital's health plans) then the plan is disolved and there is no COBRA. If the plan offered to your employees is part of the plan offered to hospital employees, then you are talking a different kettle of fish. Also, it probably depends upon the type of legal ownership, etc. You need someone with real legal know-how to help you with this one. Please post again when you get your answer as I would be very interested in what the answer is and why.