Answers to tricky HR questions: OK to have a separate COBRA continuation plan?
August 15, 2008 by Jim GiulianoPosted in: Answers to tricky HR questions, In this week's e-newsletter, Latest News & Views, policies
Our team of experts fields real-life, everyday questions from HR managers and gives practical answers that can be applied by any HR pro in the same situation. Today’s question: Can we offer a separate COBRA plan to former employees?
Question:
The COBRA regs appear to say that any health insurance plan we offer to former employees should be a “continuation” of the plan they had while employed with us.
Does that mean for those eligible for COBRA we can’t designate a separate plan under a separate insurance carrier?
Answer:
You’re right that the regs mandate a continuation of the current plan, says Edward Fensholt, an employment-law attorney who specializes in COBRA compliance. But there’s another aspect to this.
The law was designed to make sure people get the same coverage as what they had when they were with the company. So if your “special” COBRA continuation plan contains lesser benefits than your regular plan, that’s a problem.
Bottom line: You can have two plans, but both plans should offer the same benefits.
Tags: benefits, COBRA, continuation, health insurance
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October 20th, 2008 at 7:11 pm
We have decided to go with 2 health plan options this year instead of one. Neither is the plan we had before. We have also gone from a 90%/10% with no deductible to a 80%/20% with a higher copay and deductibles. Does this mean we have to continue to offer the previous plan to those who are already on COBRA? We haven’t changed carrier just the plan options.