COBRA Question

This question originates from Washington State.

I elected to have COBRA coverage and have made payments to my former employer via certified mail. I used certified mail due to the circumstances of my termination and for other reasons leading me to distrust them. They have signed for the last six of my certified mail payments. The most recent payment was mailed on the 22nd of July and the first notice of the mail was provided to them on the 24th of July. The second notice was delivered on the 30th. The payment was unsigned for and returned to me on the 8th of August. The end of my payment grace period was the end of July. I have not yet contacted them and I'm certain this should be my next step. I'm also certain I will receive some kind of a polite "tough luck" response. My concern is the continuation of my coverage. Is my envelope proof of payment having been made and rejected?

In addition, they have been cashing my checks and not passing the payments on to the insurance company. I had to call them once and consequently received a notice from the insurance company that I had been reinstated with a new termination date. The envelopes were addressed to the Human Resource Director by name and title. The excuse for not my not having coverage, given by the H.R. Director, was 'Oh, those checks must have gone straight to accounting'. Four checks since then have been signed for and deposited. I have received nothing since then showing reinstatement. Is it legal for an employer to deposit your payments into their bank account and not pay premiums for you to their insurance company? Thank you, in advance, for any responses.

In addition, they have been cashing my checks and not passing the payments on to the insurance company. Your checks typically wouldn't be passed on to the insurance carrier. You are paying the employer for the monthly premium and they in turn keep your coverage active and include the cost of your coverage in the lump payment they make to their insurance carrier for all their other employees. It is possible that your check went directly to accounting and accts receivable failed to notify whoever is adminstering COBRA internally that your payment was received. I've had it happen - which is why we always tell COBRA participants to send their checks addressed to "the attention of" the appropriate person - so the check doesn't get waylaid internally.

As to your latest premium check, you have proof you mailed the check timely. If your employer cancels your coverage and refuses to reinstate it, contact the federal DOL and file a complaint. I suggest you first call the employer and see what the problem is though - it can be easily straightened out.

I'm not convinced that anything you've described is other than administrative SNAFU's. Regrettable but not evidence of ill-intent towards you.