Cobra premium back payments requested?

[Eastern]

What is the name of your state (only U.S. law)? New Jersey

Hi,

I was employed in NJ and let go in August of 2009. Since then I have relocated to Florida. When I was let go from my employer in 2009, I opted to keep my insurance coverage under Cobra law which (at the time) allowed continuation for an 18 month period. I sent my checks in a timely manner. This month was supposed to be my last month of coverage of the 18 month period and I noticed my former employer did not cash my check at the usual discounted rate. When I contacted them to make sure they received my check, I was advised they have received my check and would not cash it. They also advised me that the Cobra law had changed back in October and subsidized coverage is now only offered for 15 months. I received no notification of this change previously and my checks in the reduced rate amount have been cashed since October with the exception of this month (January). Now my former employer has requested a large sum of money to make up the difference in the premium cost since October.

This seems unfair. Considering I'm unemployed, had I known in advance I would have to pay the premium amount I would have discontinued coverage as the cost truly exceeds what I can afford to pay. Also, how do I know if what they are claiming their monthly insurance payments are to be the actual amount they are paying? Do I have a right to some type of documentation from their insurance agent?

I contacted a representative with the department of labor and he advised me that I could ask for a refund on the checks I sent dating back to October. If I do this he also suggested any insurance costs (Dr. Visits, prescriptions, etc.) within that time and now, I would most likely be responsible for.

Considering I was previously under the impression all was "normal" and my reduced rate checks were being cashed, I indeed made a few visits to the Dr. The cost of these visits would most likely exceed what my employer is asking me to pay them back.

I'm not sure what I should do at this point. Do I have any rights?

 

[swalsh411]

You have a right to do nothing and let them try to sue you. If they did sue you and won, it would be an enforceable judgment.

 

[cbg]

Please scroll down to #17 in the attached link. This information was WIDELY publicized at the time.

FAQs For Employees About COBRA Continuation Health Coverage

 

[Eastern]

I understand now that subsidized coverage is only offered for 15 months. My former employer actually advised me when I was let go that could keep my insurance at a their premium rate. This was too expensive for me, so I declined. The following day I heard about Cobra from a friend. I then shared the "18 months at a subsidized rate" info with my former employer. It was only when I mentioned it to them that they agreed to "check into it" and ultimately discount the amount. Either they were unaware of Cobra or very aware. Regardless, I feel I should have received something in the mail advising me of the "widely published" correct information prior to the 15 month marker. Again, had I known the subsidized rate was going to end I would have canceled the insurance. My former employer was, after all, still cashing my checks at the reduced rate beyond the 15 month period. Now they are claiming their premium rate has gone up since the original amount my subsidized rate was based off of. This is a big increase and large sum of money that I owe and I have no proof of what they are actually paying from their insurance company. It's all word of mouth.

What I also don't understand is, why are employees who are let go from there jobs required to deal with their former employers for all money transactions. In my opinion this just opens the door for employers to take advantage of the situation and make an already uncomfortable situation even worse.

Thanks for your help.

 

[cbg]

I can pretty much guarantee you that at least once and possibly twice in the time since your COBRA began (depending on when your plan year falls) they received a significant increase from the insurance carrier. When their rate goes up, your rate goes up.

You need to deal with the employer (if they do not use a third party administrator - some do) because that is who your transactions are with. Who do you think you should be dealing with?

 

[Eastern]

To answer your question, for a more accurate exchange of information it would make sense that terminated employees are permitted to go through a third party or the insurance company directly when making payments. This would reduce the risk for errors or abuse. Unfortunately not all employers have a handle on their business or play by the book, as in the case of many small businesses who do not have the luxury or oversight of an HR, financial or legal department.

 

[Eastern]

cbg, no offense but I just read your profile and you list yourself as an "HR Consultant." From what I understand, HR consultants assist businesses in organizational development. Thank you for your time.

If there is any attorney reading this thread who specializes in representing matters from an employee's prespective, I would greatly appreciate advice.

Thanks!

 

[cbg]

Your understanding of what an HR consultant does is exceedingly limited.

And who is going to pay for the third party? Or the upgrade to the system/extra staff for the insurance company so that they can speak to the hundreds of employees instead of the few benefits managers? I'm betting yo don't think it should be you....

Someone who manages employer sponsored benefits on a regular basis is going to know far more about the process than a tax attorney or a real estate attorney. Having gone to law school is not a guarantee of knowledge in all subjects.

But if you'd rather an attorney responded to you, be my guest. If any of the attorneys who respond here are willing to speak to you at this point.

 

[Eastern]

Again, thank you for your time cbg.