How to close shop and deal with COBRA?

[smallLLC]

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

We have a (very) small DE LLC based in NYC - just 3 people. We got health insurance for all of us thru the Healthy NY plan (requires salaries under - i think - 35K plus more than 50% of employees coverd). We've run out of money and for the last couple of years stopped paying ourselves salaries to try to get our technology back on track. Now it looks like we may fold altogether b/c one of us is no longer cooperating.

The two remaining do not want to be on the hook for the health insurance premiums of the third.

If we close shop, do we have to offer COBRA insurance? Who administers it? How do we convert? What notice do we have to send to third member? We've left messages with Oxford over the course of the last month but they have never gotten back to us. We'd really like to do this ourselves without an attorney if it's possible. Thank you greatly for any advice. -DS

 

[ecmst12]

A 10 second google search for COBRA told me that it only applies to companies with 20 or more employees. You're off the hook.

 

[cbg]

Hold the fort there. It's not enough to look at only Federal COBRA - you have to look at state continuation requirements as well, and NY has a requirement for employers of under 20 employees that mirrors COBRA.

However, if the company closes (which is what I assume you mean by closing up shop) the policy will be cancelled and you cannot continue coverage of a policy that has been cancelled. COBRA is not a separate policy; it is continuation of the existing coverage.

So if I am reading your post correctly, you do not have to offer continuation of coverage to the third individual, but for a completely different reason than the one offered above.