Rehire/COBRA/Health Benefits

NeedCoffee

Can I run something past you guys? We had a long-time employee resign on 8/25/06 to try and start his own business. We sent him his COBRA qualifying event notice.

He decided to come back to work for us, and we want to get him on health benefits ASAP (he likely wouldn't be able to afford COBRA premiums). Under our health benefits system, ee's are eligible on the 1st of the month following 30 days of employment.

We wanted to start him on 10/1/06 for payroll purposes, which was a Sunday...here's the timeline I'm now looking at:

10/1/06 - date we wanted him to start (Sunday)
10/2/06 - date ee actually started, since we aren't open Sundays
10/31/06 - date COBRA enrollment period expires
11/1/06 - date ee is eligible for health benefits if start date is 10/1/06
12/1/06 - date ee is eligible for health benefits if start date is 10/2/06

Is it legal for me to record his start date as 10/1/06 (which is when we intended him to start) instead of 10/2/06? This would help us for payroll purposes and would help the ee for insurance purposes. Please understand that we're not trying to pull the wool over anyone's eyes on this, we're just trying to find out whether our intent (his DOH) would hold up if questioned.

Sorry for the rambling post, but it is still early and I'm just about out of ideas as to where to look on this issue.

Thanks, everyone!

awilliams

Is your business generally open on Sundays? If so, I'd put his start date at 10/1/06, give him a vacation day for that day, and carry on. If not, you may want to have his start date be the earlier Friday, 9/29/06, give him vacation for that day, and carry on.

I'll double-check this with one of our benefits attorneys.


Anne Williams
Attorney Editor
M. Lee Smith Publishers, LLC

NeedCoffee

Thanks Anne - I'd appreciate you checking into that. Our business is open Monday through Saturday, so I think that Saturday could work depending on what the benefits attorney says!

System

Here's a response from attorney Scott Ruth, who's a frequent contributor to our newsletters Benefits & Compensation Law Alert and Benefits & Compensation Law for Nonprofits:

The first thing is to look at your plan documents. They may state that a rehired employee has an earlier eligibility date than others. Sometimes it is stated that a rehire within a certain period of time is treated as if there is no break in service, and is immediately eligible. This person was gone just over a month.

If that is not the case, then you need to use the actual start date. You are required to follow the terms of your plan, and if you do not regularly start people on the 1st of the month when the 1st falls on a weekend, then you are making an exception for this person and others could claim they are entitled to the same exception.

marc

It's much easier than everyone is making it. Notice that if you count 10/2 as the first day, there are still 30 days in the month until 10/31. That makes 11/1 the effective date.