Cancelling coverage of COBRA participant

DB · September 2002

I need to send a registered, return receipt letter to a COBRA participant who has not paid her premiums since June 1. I know I should have done this sooner but this is the first COBRA non-payment we have had and I tried to set up a payment pay with her to catch up. She has missed every payment date. Our company lawyer has reviewed the case and said to send her notice that coverage will be cancelled if full payment is not received by such and such a date.

My question: Is there a format required by the COBRA law for a cancellation notice. Certain information that must be included? Does anyone have a letter they can share?

Please send samples to [email]dbrockmeyer@ofallon.org[/email] or fax to 618-624-4508 as soon as possible. My maternity leave could start any day (any hour) and I don't want to leave this hanging while I'm out.

Thanks for your help.

Don D · September 2002

I'm trying to hurry and rush this response before you deliver!! I contacted our 'always able and available' insurance broker, Kim Greene for you. She rapidly provided the following response. What a great thing the Forum is, Huh? Here is Kim's response to your question. If you would like to have Kim's sugggested letter, email me at [email]trilogydd@aol.com[/email] and I will provide it. Don D.

"Other than the 30 day grace period, no further statutory or regulatory requirement exists. Mailing a notice of cancellation of COBRA is not required.

As with many things COBRA, rules are determined by court cases. From Sirkin v. Phillips Colleges, Inc., the grace period is extended if the qualified beneficiary is mentally or physically unable to make a timely payment. I believe in this case the grace period was extended until a guardian could be appointed to handle the person's affairs.

I hope this helps. As far as a sample letter, I'd use something like the attached."

Kimberly A. Greene, CEBS, RHU
Ross & Yerger Insurance, Inc.
(601) 944-0831
(601) 914-9335 fax
[email]kgreene@rossandyerger.com[/email]

Don D · September 2002

Here's the letter suggested by our broker:

Name
Address
City/St/Zip

RE: XYZ Corporation Medical Benefit Plan

Dear ___:

This letter is to notify you that coverage for you and your family through the XYZ Corporation medical benefit plan is terminated effective June 1, 2002 due to non-payment of the required COBRA premiums.

Should you wish to discuss this in further detail, please do not hesitate to call me. My direct number is __________.

Thank you.

Sincerely,

moneyman · September 2002

We have been advised by our insurance agent and our attorney NOT to send a cancellation letter, or even to send bills, or contact the former employee about late or payments due UNLESS we are willing to do this for EACH AND EVERY continuee in EACH AND EVERY instance. We were advised that if we notified one continuee, we were seting precedent by our actions and must grant that same leeway for all continuees. Now, that is not a problem if you intend to send our bills every month or remind everyone that they payment is due or late, but I am sure that most will agree that this is time consuming work without the added work.

We make sure that the employee is "instructed" in an exit interview and that their official mailed notice states that we are not required to bill or remind, and the we will NOT bill or remind, and that they have the same grace period to pay that we do, by the last date of the month that the premium is due. If it is not received by that date, then we will cancel their coverage with no further notice. The only time that we have not cancelled was if the person called and said that the payment was on the way and we have not yet processed the cancellation (usually within the first week of the next month) however, since we do not pay their premium until we receive it, we also inform them that we cannot guarantee that the insurance company will accept the late payment. We always send off payment the day we receive their check (or even hand carry the payment), so that we do not have any delay issues.

We don't really want to be so hard about this issue, but there are so many things to worry about with COBRA that we try to stick to the rules without granting any additional privleges so that it makes it easier to administer across the board.

bsa · September 2002

Since a letter of cancellation is not required by the law just a good HR practice, you can use any format that is comfortable for you. My letters are very short and to the point --there's no more time for playing around. Be sure that someone is assigned to follow-up with the "your cancelled" letter if no payment is received.

CANCELLATION NOTICE
This letter is to notify you that the insurance premium payment has not be received for [u]MONTH(S)[/u] for the COBRA Continued Coverage you elected. Your medical insurance will be cancelled effective [u]30 DAYS FROM DATE OF LETTER[/u], unless we receive payment of [u]$XX[/u] by [u]?? ANY DATE[/u].

CANCELLATION
This letter is to notify you that your health insurance has been cancelled effective [u]DATE[/u]. The insurance premium payment was not received as required for the COBRA Continued Coverage you elected.

DB · September 2002

Thank you to everyone for your replies. I put the information to great use. I love the forum! Makes me look smart even on the days when there seems to be no hope.

Cancelling coverage of COBRA participant

Comments