COBRA Subsidy and Spouse Coverage

How do you verify that an involuntarily terminated employee would be eligible for coverage under a spouse's health plan?  We had one employee who was nice enough to call and check rates between the subsidy amount and his wife's coverage at which time we explained that the subsidy only goes into effect if you don't have the option of other coverage.  He then lied on the paperwork and tried to sign up for the subsidized COBRA anyway.  I now have another employee who just enrolled and yet I know his wife is employed.  Can we ask for proof from the spouse's employer that there was no coverage available?


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  • keep in mind that these ex-employees can take advantage of the cobra subsidy if there is a gap between the end of their health plan and the beginning of their spouse's health plan. you could require that the employees sign an affidavit stating that they have no option for coverage under any other
    group health plan.  you could list the rules on cobra subsidy eligibility and note that if they fail to provide notice that they have eligibility for coverage under any other group health plan, they may be subject to a federal tax penalty of 110 percent of the premium reduction improperly received.



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