I'm trying to help someone be in the best position with healthcare benefits. It sounds like they may be able to be covered by both their COBRA continuation plan *and* a new group plan through a spouse's employer. There's some tricky wording in the COBRA rules. Is this possible?
Goal: get this person double covered under 1) COBRA plan and 2) spouse's employer's group health plan for the entire month of September.
- Qualifying Event (and last day of coverage under this person's previous employer group health plan): 8/31/2013
- Deadline to enroll in spouse's employer's group health plan (with retroactive coverage to 9/1/2013): 9/30/2013
- Deadline to enroll in COBRA plan (with retroactive coverage to 9/1/2013): November 1, 2013
The question: can this person be covered under both
the COBRA plan and the new group plan?
Based on the DOL's COBRA FAQs
(Q14: How long does COBRA coverage last?): "[coverage] may end earlier if ... After the COBRA election, coverage is obtained with another employer group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition of such beneficiary. However, if other group health coverage is obtained prior to the COBRA election, COBRA coverage may not be discontinued, even if the other coverage continues after the COBRA election."
Do I understand this correctly to indicate that if they sign up for spouse's employer's plan on Sept 30, then elect COBRA at a later date (e.g. 10/15/2013) this person will be covered under both plans?
There is a much longer COBRA compliance document for employers
that does mention that coverage can end early, but does not include the relevant bit from above ("However, if other group health coverage is obtained prior to the COBRA election, COBRA coverage may not be discontinued, even if the other coverage continues after the COBRA election.") The Early Termination section of this PDF starts at bottom of page 16.
Additional data point: the new group plan does
have restrictions for pre-existing conditions, but this person would not
be subject to those restrictions because there would be no gap in coverage.
Considering these rules, can this person be covered under both plans?
In the event that this person had both a COBRA plan and a new plan active for the month of September, how would claims be handled? The COBRA plan has a lower deductible and covers a higher percentage of any medical bills than the new group plan.