Workmans Comp & COBRA

slogan · April 2004

Question & situation: we have an employee that is working the system. Ha has been off for several months now with an "injury" and collecting workmans comp payments. While he is off, we require that to keep his medical insurance he has to pay his portion of the premium payments out of his pocket, they are not deducted from his workmans comp check. He failed to make one of the premium payments so I canceled his covergae. At the same time he has run out of workmans comp time.

He came back to work this past Monday and re-enrolled into the medical plan. I initially put down that his coverage started the day he came back to work. My benefits coordinator said no that was wrong. Since we pay as we go, he has no money to make his premium payments so his coverage won't start until the end of this pay period when the premium payments can be deducted from his pay check. Until then my benefits coordinator says he would have to be making COBRA payments to keep the covergae in force.

1st question: has anyone had a similar situation and did you require them to make COBRA payments to keep the insurance in force?

2nd question: When would you start their covergae when they came back to work in this situation?

3rd question: Does anyone see any legal problems in this situation?

Pearce · April 2004

You don't say for how long this employee was out due to the disability. Did you follow the FMLA regulations, if applicable to this specific case, regarding benefits?

Brad Forrister · April 2004

... and if you're trying to apply COBRA, did you give him all the relevant COBRA notices?

Brad Forrister
Director of Publishing
M. Lee Smith Publishers

slogan · April 2004

Once I was notified by payroll that he had nissed a payment, yes we got the COBRA letter together. The problem came in trying to get him into the office to have him sign & give him a copy. We called him and advised him of his COBRA options and advised him to come by the office immediately to sign the papers. At thsi time, I cannot answer how long he was out. Our FMLA leave begins after an individual has used all their sick leave or is not on workmans comp. He had just reached that threshold so everything hit at once.

Don D · April 2004

Another good reason to run all programs concurrently. As it is, in addition to this dilemma, you now have a returned comp-injured employee who has his entire FMLA entitlement sitting in his locker in a wrapped package. I do not think the FML Act will allow you to postpone FMLA until your other programs and leaves exhaust. FMLA will allow you to run or not run them concurrently with FMLA, but not fail to put the employee on FML who should be so designated. And if you had had him on FMLA, the insurance question would be moot.

slogan · April 2004

Good points Don, but now I have other questions that come to mind. Now we are getting into the "Bermuda Triangle" of FMLA & Workmans Comp. How can you be on FMLA (leave without pay) and Workmans Comp (leave with pay) at the same time? And how does that make the insurance issue a moot point when he can pay for his part of the insurance premiums out of his own pocket? Even if he misses a premium payment I would still need to advise him of his COBRA options would I not?

juju · April 2004

In answer to your first question, FMLA is not always "leave without pay." Many companies require exhausting all benefit time/paid time off while on FMLA and also require it run concurrent with a WC LOA if the employee is otherwise qualified (1 yr, 1250 hrs).

dbutton111 · April 2004

FMLA isn't always leave without pay. When you boil FMLA down it's basically job and benefit protection, meaning you can't fire them or cancel their benefits because they need time off.

The way you describe your COBRA notification process bothers me. Correct me if I'm wrong, but didn't you say that you called this gentleman on the phone and verbally told him his rights, advising him to come into the office to get the paperwork? Or did I miss the part about you mailing him his COBRA notification? The law is pretty clear, it's your responsibility to get the COBRA notice in his hands, having him come into the office puts the burden on the employee. To comply with the law you only have to mail it first class mail. We also use certificate of mailing so we can prove that we did indeed mail something to his/her address. We don't do certified mail or return receipt (if his Aunt Matilda signs for the package then we now have proof that he DIDN'T get the COBRA notice and would have to send out another one).

To answer your other questions:

>1st question: has anyone had a similar >situation and did you require them to make >COBRA payments to keep the insurance in force?

If someone is out on Work Comp or STD we continue their benefits as long as they pay their normal portion of the premiums. If they miss one payment they have a 30 day grace period. After that their benefits are terminated and they are provided the COBRA notice. Whether they enroll in COBRA or not is up to them.

>2nd question: When would you start their >covergae when they came back to work in this >situation?

When does coverage start for your newly hired employees? I would follow your own SPD. In our case, benefits begin date of hire so we would allow him to re-enroll immediately. Depending on how long he went without coverage may have a bearing on whether or not he is subject to pre-existing conditions.

>3rd question: Does anyone see any legal >problems in this situation?

Maybe. The COBRA notification (or non-notification) would be my biggest worry.

slogan · April 2004

Good reminders on all points. You are right about mailing the COBRA notice and not just calling. I would have sent it certified mail but your idea of sending it using a certificate of mailing is a better idea.

Having read several responses to this post tells me I have a several holes in our procedures that need to be plugged. It also sound like in this situation we also neede to include a cover letter explaining what has happened, what is going to happen, and what needs to be done to remedy the situation. Good points & reminders.

Thanks. th-up

Workmans Comp & COBRA

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