Stopped Paying Premiums

brown

I have an employee who elected COBRA coverage and paid for four months. For the last three months, however, the employee has not been paying premiums. May I terminate his COBRA coverage?

LindaS

You bet you can. You should have cancelled it long ago and the problem you may encounter at this point will be with your insurance carrier. As far as the insurance company is concerned, the ex-employee is still paying their premiums because you are still paying the premiums to the insurance company. When you terminate this person's coverage you have two choices...a) you, as the health plan sponsor, decide to pay those three months worth of premiums and terminate his coverage effective now or, 2) talk to the insurance company and see if they are willing to go back three months and terminate the coverage back to the last date the person actually paid for the coverage. Some insurance companies will go back that far and others won't. Best bet is to try to get them to go back since you don't want to have to explain WHY you, as the employer, are being forced to pay those premiums.

Last thing, send the ex-employee a letter via certificate of mailing stating that the insurance coverage has been terminated effective ____ date. Make sure you keep a copy of their records and be prepared to get calls from this person if their coverage is terminated back the three months and they receive notice from any providers demanding payment from them as the insurance company will request refunds for any paid claims.