by JodyLRandall » Tue Jan 18, 2011 11:04 pm
Our company has just instituted a policy where your health insurance ends the last day you work. However, because of weather, the company had 10 employees sitting at home waiting for the weather to clear for two weeks before they were finally laid off. They are now saying that their health insurance ended on the last day they worked. Can you terminate someone's health insurance prior to notifying them of their layoff without notice?
Posted: Wed Jan 19, 2011 12:31 am Post Subject:
They are now saying that their health insurance ended on the last day they worked. Can you terminate someone's health insurance prior to notifying them of their layoff without notice?
I suppose this, technically, is possible. If the plan is "self-funded" they have a lot of leeway in defining eligibility for benefits short of discriminating against against enployees within a class of eligible workers. Most plans have a "minimum number of hours of work" requirement to be eligible for the benefits, so not working at all over a two week period probably fits within that definition.
This scenario complicates a person's eligibility to continue coverage under COBRA, in terms of when the 60-day clock begins to run. Strictly speaking, if the benefits were lost two weeks prior to being laid off, there would be less than 45 days remaining to make one's election to continue coverage. The COBRA notice is supposed to be provided in a timely manner, and if not, there can be a short extension in the amount of time to enroll for continuation coverage.
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