Cobra

Johana 1

Our company bought another company 1 year ago. Our company keep one of the old employees as a consultant to work with the new company. Our company offered him Cobra which it will expired 4/30/03 (18 months). The question is. Can we extend the employee the Cobra benefits? He will continue working for us as a consultant. Another question, If we do it for him Do we have to do it for the other employees that became consultans once our company took over?

NaeNae55

[font size="1" color="#FF0000"]LAST EDITED ON 12-30-02 AT 12:16PM (CST)[/font][p]Are you fully self-insured? If you have traditional insurance, or stop loss coverage on a self-funded plan, your insurance carrier will probably have something to say about your wanting to extend COBRA. If you extend for this person, you must extend for everyone or you might be subject to discrimination charges. Another way to handle this situation might be for you to offer to help this person get a personal insurance plan, or you might simply put this person on your payroll for a specific period of time (which can be extended if necessary) and cover them under your group insurance plan.

Of course, you might have some state laws which apply that might change things. I have spoken from the federal COBRA law standpoint only.

Good luck!

Down_the_Middle

Unless your "consultant's" are regarded as employees, you're likely going down a road that is fraught with pot-holes!!!!! The gesture to offer the non-employee (consultant) was commendable, but also risky if you do not do the same for others in that same status. Somehow this consultant had the health coverage thru the former employer, so if you've chosen to mirror everything done by the other org, then I understand the dilemma.............altho I'd look at making a policy change at the earliest opportunity.

Theresa Gegen TX

An employer could generally contract to provide any type of pay and benefits it wants to a contractor. You could buy the contractor health insurance if you wanted to, but it would probably be quite costly. You may just want to consider raising the person's pay, so that they could purchase their own insurance.

To allow the contractor to continue on your employee benefit plans could have implications for all of the participants -- how you determine who is eligible to participate could cause you trouble in the future (remember, this is how Microsoft got in trouble for millions of dollars of liability -- it turned employees into contractors on paper, but not in reality. The benefit plans applied to "employee", and the employees proved that they, although called contractors, were really still employees). I suggest you don't mess with that.

As for COBRA, it is a regulated benefit -- the law states when a person is eligible for COBRA and for how long a person is eligible for COBRA. An employer should not tinker with that!!

Good Luck!