They won't pay!

dotato · October 2003

ee quit. ee elected COBRA. ee has made one-half of one payment in four months. ee has not made a payment in over 30 days. eer contacted ee to arrange a payment plan (which is how I got one payment), but ee is not honoring that plan.

Can I kick them off?

Thanks,

Erik

LindaS · October 2003

You have the right to terminate their coverage since they have not made the required payments. I always make one "last ditch" attempt to collect the monies before I terminate their coverage. The letter I sent informed the ex-ee how much they owed, the date the money needed to be paid by and that failure to make that payment would result in their coverage being terminated back to XX date. This letter was something I sent certified mail.

jrzgrl · October 2003

"...failure to make that payment would result in their coverage being terminated back to XX date."

That is a great idea. My statements always tell them by how much they are overdue and what months they owe...but recently an ex-ee was stunned that I was terming her insurance back to 9/1/03 anyway. She admitted she was overdue by two months, but could not quite grasp the idea that her coverage was going to be terminated back to that date as a result.

KSimonton · October 2003

Yup, you can terminate them. If you don't get their money, you can't include it in your premium payment to your insurance company. You do need to notify the insurance company to tell them why your payment is lower than expected so that your company does not suffer for the missing money. COBRA is a priviledge, not a right and it's just like any other bill. Ask your former employee how long the electric company will put up with the "oops, I forgot" excuse and keep their lights on.

Mentel · October 2003

I watch this very closely. When someone is over their 30-day grace period by a week, they are off! I would never have gone this long waiting for payment. COBRA regulations are very explicit on this. Once you have told them how much time they have to pay, it is up to them to comply. Get them off ASAP and go back to the month they did not pay.

MS HR · October 2003

wouldn't your gas or electric company turn you off if you didn't pay?

dotato · October 2003

Of course, but neither my gas nor electric company is regulated by state statutes that require their provision.

Nice perspective though.

E

dmartenson · October 2003

Another reason to be more rigid in cancelling for non-payment of premium:

Our carrier (Blue Cross) will only let us cancel back two months. So, if I allow a COBRA participant to lapse by more than that, I cannot get a credit on our account for more than two months, and we are out the $$.

I also make a last ditch effort to make sure the ee knows exactly what they owe, for which months, and to what date they will be canceled back to due to non-payment. Sometimes they respond and sometimes they don't. I try to reach them by phone as well as certified return receipt mail. But now I always do resolve within the two month time-frame - otherwise the company takes the $$ hit.

moneyman · October 2003

We never forward on any premiums until we receive it from the EE so we are never out any money. EE is informed of due dates and grace period and consequences of late payment. If they pay on the last day of the grace period, we hand deliver the payment to our agent (which is just down the street). If they call and say that it will be late, we inform them that we will send their payment on to the agent immediately, however, it is not up to us to 'make' the carrier accept it past the grace period, that it is possible that the carrier will not accept the payment and insurance coverage will be lost. We do not send reminder bills and the EE knows that. Once the EE is 60 days past the due date (30 past the grace period) we send in cancellation paperwork.

I know it may sound harsh to not send bills or make calls, but if you do it for one, you have to do it for all and you must make sure that you are giving everyone the same chance. If I let someone go 10 days I better make sure that I let everyone go 10 days and not 5. It is easier to keep it simple.

dmartenson · October 2003

I agree with you - I go way above and beyond. In my defense, I only have 33 employees, and very little turnover, so only have 1 or 2 on COBRA at any given time. If/when our company grows, I will have to rethink my policy.

marc · October 2003

Moneyman made a great point. The consistent treatment is one of the important mantras of the HR profession. And Dmartenson has pointed out one of the pitfalls with 'going the extra mile,' it may not work for you down the road. Growth, problem ees (or ex-ees with respect to cobra), and all of their dependents who get add-on cobra opportunities; all of these illustrate the sense of an approach similar to the one outlined by Moneyman.

Dixie Lee · October 2003

You can drop them. I would notify by registered, certified receipt letter that due to no payment received, COBRA benefits cease on (date). We notify in initial COBRA letter that the insurane will cease if no payment is made.

They won't pay!

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