One of the employees in your organization has come to you with a potential probl

Question

One of the employees in your organization has come to you with a potential problem. The employee is concerned because their immediate supervisor is disputing a potential claim made under COBRA. Specifically, the employee is getting a divorce and feels that his ex-spouse should be made aware of the possibility of COBRA benefits. The supervisor thinks this idea is silly and that only employees are eligible for COBRA. Answer the following questions based on the above situation:

1. Who is covered under COBRA? That is, who is correct in the above situation, the employee or the supervisor?

2. The supervisor feels that anyone who files a claim under the act should have to pay the premium amount plus 25% for administrative fees. What is your reply?

Explanation / Answer

Ans: COBRA is the Consolidated Omnibus Budget Reconciliation Act passed in 1985, gives workers and their family to stay on employer health plan under certain circumstances such as voluntary or involuntary job loss, death, divorce, and other life events. In simple words it allows the continuation of benefits coverage after someone is no longer part of the company.

1. These may be eligible for COBRA,
(a) Death of Employee, dependents will be covered.
(b) Divorce or legal separation, Ex are eligible through employer.
(c) Termination or reduction in hours of covered employee.
(d) Moving to Medicare, when you become eligible for Medicare but are covered under an employer plan, your dependents are qualified for COBRA.

In the above situation employee is correct. His Ex-spouse should be made aware of benefits of COBRA.

2. Individuals are required to pay entire premium coverage upto 102 percent of the cost to the plan. Here employer will charge upto 102 percent of premium and 2% they can keep as administrative costs.

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