retroactive COBRA billing

[csjohnson]

I have a question pertaining to COBRA law in Colorado. I need direction on whether or not it is worthwhile to pursue a COBRA billing issue with my previous employer. After six months of billing, the employer discovered that the premium they quoted on the COBRA “rate sheet” was incorrect. They garnished my severance wages to cover the error for the previous six months without consulting me. Can they retroactively bill for a different rate than agreed upon? Can they garnish my wages for these charges without my consent?

 

[ALawyer]

First COBRA is a Federal law (if the employer has (I think) 20 or 50 or more employees. Some states have similar laws for smaller employers, but I do not know what CO has or doesn't have.

While a court order is required to technically "garnish" salary, they presumably are not garnishing but using the well established approach of "set off" to hold back money they may owe you to offset money you owe them.

Also, usually people are not "owed" severance unless it is under a union agreement or some private contract you worked out with them; look at the contract and see what it says, if anything.

If they did make a mistake I can't see where you'd have much to complain about unless the mistake would have changed the course of action you took. If you would have taken the insurance anyway, "where's the beef?"

 

[cbg]

Colorado state continuation is in some ways less generous than the Federal plan, but there's not a whole lot of difference between the two.

Federal COBRA law states that employers who have more than 20 employees must provide the option of continuing coverage to all employees who terminate employment for any reason except gross misconduct. The former employee pays the same cost as the employer is being charged by the insurance carrier, plus 2% for administration. (While technically the employer can opt out of the 2% and charge the employee exactly what the insurance carrier charges them, few if any do, nor do I see why they should. COBRA administration is no picnic. I know - I do it.) It's not a question of negotiating a mutually agreeable rate: this is what the law states.

If they made an honest error as to the rates, they can correct it. In fact, if the insurance carrier begins charging them a different rate, they can legally pass that change on to you. To fail to do so might ultimately lead to discrimination charges, if some employees are being charged the full rate and others are not.

Since severance is not legally required, I see no reason why they should not be able to correct an honest error in this way.