Employer Canceled Insurance w/out Notifying Me

[zumacali]

CA - I was laid off on April 8, 2002. My husband, who was covered under my insurance policy, went to the doctor on April 11. On April 15, I received a call from the doctor's office stating that my insurance was canceled on April 1, which meant we'd be billed for that past office visit and my husband would not be eligible for the test they had set up for him. I didn't mind hearing I'd have to pay as much as hearing my insurance was canceled before I was laid off. On May 6, I received a note stating that I can sign up for Cobra, and in fact, my insurance had been canceled on April 1. I'd like to know if it was legal for my employer to cancel my insurance 7 days before I was laid off without notifying me. Thanks.

 

[cbg]

They probably didn't have a choice about the date. Many insurance plans restrict the employer to cancellations effective either the first or last day of the month. They also appear to have notified you of your right to COBRA within a timely fashion (assuming that they use a third party administrator) and provided you with accurate HIPAA information. COBRA is ALWAYS, without exception, retroactive to the last day of coverage so if you elect COBRA, it will be effective April 1 and the doctor's visit in question will be covered.

That being the case, even if your state required previous notification, you do not appear to have suffered any damages and therefore have nothing to sue for.

 

[Beth3]

You have more experience than I do with insured plans, cbg, but isn't the typical arrangement when the contract calls for adds and cancels as of the first of the month is that you are eligible for participation on the first of the month FOLLOWING any waiting period and then when an ee leaves, coverage is cancelled the end of that month.

This retro-active cancellation back to the first of the month strikes me as not quite right, although it is possible the contract with the carrier could stipulate this. It would be unusual however.

zumacali, do you still have your April paycheck stub? I'm wondering if the employer made a deduction for your premium for that week (assuming you routinely made a contribution.)

 

[cbg]

Beth, you are correct that it is more common to finish out the month in which the termination takes place, and I'd be much happier with the whole situation if zumacali's employer had handled it that way. Nonetheless, I'm unaware of any laws which forbid making it retroactive.

Of course, this being California, there may well be one. But as I said, I'm not sure what damages zumacali would be able to claim since the COBRA coverage MUST, by law, be reinstated back to April 1.