Cobra ? Intent to term ltr.

Balloonman

I understand while on FMLA a person has a 30 day grace period. No problem with that, I also know that I must send a letter giving them 15 days notice of intent to terminate the health care coverage.
The employee did not make the required payment for 1/1, 1/8, or 1/15.
My question is this, can I notify him now of his requirements of keeping up on his portion of the payment and tell him that once we hit 30 days that his coverage will be terminated. Can I do this now and give him the 15 days notice? Or must I wait until he is 30 days past due?
I want to notify him now that in 15 days his coverage will be cancelled and he will be offered COBRA.
Looking for input.
MY $0.02 worth.
DJ The Balloonman

irenesmsaclaims

There's no reason why you can't give him notice that when the 30 days are up, coverage will be terminated; but, if he's still on FMLA, and hasn't notified you of his intent not to return to employment, there is no COBRA qualifying event. You would not offer COBRA until you are notified that he isn't returning.

Balloonman

First he will be out more than 12 weeks and we are going to terminate. Second, and the reason for this question is the failure to pay his insurance premiums Irene.
If he is not going to pay his portion then the insurance company will cancel coverage (Cobra event).
While on FMLA we have to maintain insurance as if they are working, and he has to pay his porition still and he is not.'
My $0.02 worth.
DJ The Balloonman

irenesmsaclaims

Ok, the original letter didn't say his employment would be terminated, which would be a qualifying event. The insurance company cancelling his coverage (non-payment) is not a qualifying event for COBRA. You must maintain his coverage contingent upon his paying premiums, while on FMLA.

LindaS

Balloonman...

I went to a Labor Law Clinic last October where the attorney advised that you CAN send the letter informing the employee that his coverage will be terminated in 15 days while you are still in the 30-day grace period. Depending on who you speak with, some will tell you that you CAN terminate coverage while the employee is under FMLA protection while others will tell you that you CANNOT.

Regarding the COBRA, this would be a COBRA qualifying event so COBRA paperwork would be sent out.

Hope this helps.

irenesmsaclaims

There is no qualifying event for COBRA until you term. employment, or the ee notifies you of intent not to return from FMLA. Other kinds of LOA could be a qualifying event (reduction in hours), but not FMLA. See previous discussion called "COBRA Help ASAP".

LindaS

Irene -

I reread the "COBRA Help ASAP" thread and am still in disagreement regarding your statement that an employee out on FMLA leave and having their benefits terminated is not a qualifying event. What makes FMLA different than any other type of unpaid leave? While I agree that simply going out on FMLA leave does not trigger COBRA, if an employer decided to terminate coverage while an EE is out on FMLA due to non-payment of premiums this would qualify an individual for COBRA as the reduction in hours IS a qualifying event - regardless of the FMLA protection.

irenesmsaclaims

"COBRA rights are not affected if an employee fails to pay the employee portion of premiums for coverage under a group health plan during FMLA leave. Any lapse of coverage under a group health plan during FMLA leave is irrelevant in determining whether circumstances constitute a COBRA event, according to the Internal Revenue Service. And if the employer paid the employee's health plan premiums during the leave period, COBRA coverage may not be conditioned on reimbursement of those premiums.

Note: Loss of coverage due to nonpayment of premiums during FMLA leave is not a COBRA qualifying event and is disregarded for COBRA purposes."

It's because FMLA is different from other leaves of absence. It has it's own special rules.

Pearce

The employee out on FMLA who does not pay their portion of the normal premium (assuming they were given information regarding how and when to make those payments) may have coverage terminated with a 15 day notice of termination of that coverage (prospective to the date 15 days away and not retroactive to whatever period was paid).

The final COBRA regulations explain that the COBRA qualifying event for this person and any family members would be the employee's failure to return to work at the end of the FMLA qualified leave (12 weeks). The coverage is lost between and is NOT COBRA eligible between the cancellation due to non-payment (after the 15 day notice) and the end of the 12 week approved FMLA leave. COBRA eligibility begins at the end of the protected leave and there would be a gap between the cancellation and the COBRA event (not returning).

If you and or your carrier chose to be more generous than the law allows in this situation then just be sure you treat all similar situations in the same way.