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Ethel · November 2003

Is including Dental and Vision coverage (which are optional 100% employee paid) a "have to" under COBRA? Presently we offer both along with health coverage but we would like to discontinue offering the dental and vision under COBRA. Can we????????????

irenesmsaclaims · November 2003

Even though dental and vision are considered "non-core" still, I see no rule which allows an employer to NOT offer COBRA for these.

Core/Non-Core Coverage. The new regulations will allow more flexibility to configure the COBRA package of health benefits. Under old rules, an employer had to provide a choice between: (a) medical, dental and vision as a package; or (b) medical alone (so-called core coverage). Under the proposed regulations, if an employer offers medical, dental and vision as a package to active employees, the employer may offer medical, dental and vision as a COBRA package. A qualified beneficiary would then accept or decline the entire package. He or she would no longer have the right to demand medical alone. Of course, another option is to allow qualified beneficiaries to elect any combination of medical, dental and vision, with each plan carrying a separate price tag.

Don D · November 2003

It has been my understanding that COBRA regulations do not require the continuation of programs other than the basic health coverage piece of the package offered prior to termination. I've looked at it as the employer 'not wanting' to offer dental and vision rather than 'being allowed to'. I've also understood that if the employer is self insured, he may opt to carry the non-core for COBRA participants; but, if the plan is offered by a carrier, they try to exclude vision and dental. Perhaps I'm wrong.

Ranger · December 2003

I have a question on this subject also. We've always told terminating employees they cannot continue the dental and/or vision plan unless they also continue the health plan (core coverage), although all three are prices separately. Should I be allowing independent choices? (All of our coverages are 100% employer paid for active ee's.)

marc · December 2003

I think you should allow separate choices.

Margaret Morford · November 2003

Perhaps I'm wrong as well...but I thought that you had to offer continuation of all health benefits in effect at the time of the COBRA triggering event. In other words, if they didn't opt for dental and vision, they can't pick it up now. If they already had it, they can continue them by paying 102% of the cost.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

Balloonman · December 2003

My understanding is that you do not have to offer, like you do with the health insurance, but if they request it, you have to allow them to keep the coverage.
My $0.02 worth.
DJ The Balloonman

Scott Ruth · December 2003

You probably must continue to offer COBRA coverages. The traditional distinction between "core" and "noncore" coverages has been eliminated from the regulations. And the general rule is if you have a group health plan you must offer COBRA coverage for that plan. Dental and Vision coverage would be group health plans if they are offered separately.

The only possible exception is if you, as employer, do not "maintain" the plan. Some coverages offered by insurance companies directly to employees where the employees pay all are not maintained by the employer. But this is a very, very narrow exception. Basically, if you are letting employees pay for the coverage pretax through a cafeteria plan, filng Form 5500s, enrolling employees, or otherwise taking actions that make it look like you offering or endorsing the plan, you are maintaining the plan, even if you don't contribute. I would assume you are maintaining the plan unless you can get a professional opinion in your specific circumstances.

Therefore, if the employee was taking the coverage before the qualifying event and you are maintaining the plan, you have to offer COBRA and all the notice requirements apply to each plan.

Ethel · December 2003

Wow! You certainly sound knowledgeable. I checked with our benefit consultants, SHRM, etc. and although the opinions vary, it appears that the majority feel we do need to offer and so that is what we have done for 2004.

Thanks to everyone who responded. It really helps to be able to communicate with others in the same boat. Seems that the regs get more complicated the longer they are around.

Thanks again.

Margaret Morford · December 2003

Ethel,

Scott is very knowledgable. He can't tell you this, but I can. He is one of those rare attorneys that specializes in ERISA and actually understands it! Even more rare (because I have heard him speak on two occasions), he understands what it takes to run a business and gives very practical (even understandable!) advice about benefits questions.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

Ethel · December 2003

Thanks for the info. It was very obvious from his response that he was extremely knowledgeable but I didn't suspect a lawyer because I understood every thing he wrote. How refreshing, an attorney who knows his stuff and can communicate in language that a non attorney can comprehend.

awilliams · December 2003

Scott Ruth is affiliated with M. Lee Smith Publishers, the providers of this site - hence the HR shield after his name. He is a member of the editorial boards of our two benefits newsletters, Benefits and Compensation Law Alert and Benefits and Compensation Law for Nonprofits. We are very lucky that he stops by and adds his expertise to benefits questions on the forum.

Anne Williams
Attorney Editor
M. Lee Smith Publishers, LLC

Don D · December 2003

>Ethel,
>
>Scott is very knowledgable. He can't tell you
>this, but I can. He is one of those rare
>attorneys that specializes in ERISA and actually
>understands it! Even more rare (because I have
>heard him speak on two occasions), he
>understands what it takes to run a business and
>gives very practical (even understandable!)
>advice about benefits questions.
>
>Margaret Morford
>theHRedge
>615-371-8200
>mmorford@mleesmith.com
>[url]http://www.thehredge.net[/url]

Well. This should earn you at least one paid guest appearance at one of his upcoming seminars. Clever, Margaret. x;-)

Margaret Morford · December 2003

[font size="1" color="#FF0000"]LAST EDITED ON 12-26-03 AT 09:29AM (CST)[/font][br][br]Don D,

You cynic! Scott doesn't give conferences that I know of. He and I were once asked to speak three years ago at the same conference. I attended his session for my own personal benefit and to make me a better consultant to my clients. I get no benefit from what I said about Scott. He's simply the best ERISA lawyer I've ever run into and I appreciate the fact that he will answer ERISA questions on the Forum, since all that stuff is way too complicated for me!

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

Don D · December 2003

Gosh; I'm glad to see that you edited your response. Otherwise it might have been one of those that James would have deleted. I thought name calling on the Forum was supposed to be prohibited according to the recently posted rules. Perhaps I misread the rule. x:-)

Margaret Morford · December 2003

Wow! I never said anything about you that needed editing. (I edited a typo I found once the message had posted.) I wrote that as a tongue-in-cheek reply to your comment about being a "clever girl." If I knew how to do emotioncons, it would have been followed by the winking one.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

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