ceo/owner paying ex-spouse's cobra

hr traci

I have a sticky situation. Our CEO/Owner just got divorced and wants to automatically elect COBRA for the ex-spouse & pay for it out of the co. The ex-spouse is going to start rehab very soon, so he wants to make sure there is no gap in coverage, (don't wait for spouse to elect).

I'm pretty sure I should at least get the signature of the ex-spouse on the election form to make this kosher, and she is out of state.

Also, as I mentioned, the ceo wants to have the co. pay the premium (basically, not being reimbursed for the premium by the COBRA participant) for a "length of time, since I owe her $$ anyway". What do you think about getting a signed agreement from the CEO about the actual # of months he will cover? Should I have him provide that via the divorce attorney? I don't want to be involved in the middle of this!

marc

There are some issues here that the CEO may or may not have the authority to require. Paying for some of his personal expenses should not be the company's responsibility. On top of that, there are some income tax wrinkles here. If the company makes the payments, the money should be part of the CEO's taxable income. The easier way to do this is to have him authorize a personal payroll deduction - that will avoid the W-2 reporting issues. If your company has a 403-b plan, these may be taken out pre-tax.

Second, you should get the soon-to-be ex-spouses signature. She is the one that has to elect Cobra unless the CEO has some sort of power of attorney - which would be unusual in a divorce situation.

Talk privately with the CEO, but be careful. Most of these types treat the companies money as their own - if he is the type to do this, make sure you get his directions to you in writing so at least your rear end is covered.