Free insurance too good to be true?
March 12, 2012 4:53 PM   Subscribe

Former employer may have kept me on their insurance plan for longer than intended--are there any repercussions for me?

I got laid off at the very end of my pregnancy. My former employer (specifically, the CFO) promised to keep me on the health plan until about two weeks after my due date. They said not to worry about my coverage until I got my COBRA letter. Three months after my due date, I'm still covered, no letter in sight. I've been in touch with HR to add baby to my plan with no trouble or mention of coverage arrangements.

Moral and ethical obligations aside, can this potential oversight on their part potentially fall on me?
posted by anonymous to Work & Money (16 answers total)
They COULD go after you for back premiums. Will they? who knows. But you need to come clean.
posted by magnetsphere at 5:08 PM on March 12, 2012


No bueno. Get this in writing, specifically the length of coverage, who pays what, coverage until when, type of coverage, etc. etc.
posted by HeyAllie at 5:11 PM on March 12, 2012 [2 favorites]

You should talk to a lawyer, or at least an expert, but my understanding is that COBRA is requirement they cannot fail to meet.

Q. Who should employees contact if they believe their employer has failed to notify the plan administrator of a qualifying event?
A. The employee can contact the appropriate regional office of DOL at .866.444.EBSA (3272). If the employer has violated COBRA, then there can be up to a $110 fine per day which is given directly to the qualified beneficiary.

So my GUESS (neither a lawyer nor an expert) would be that you cannot wind up in a situation where you have had not actually had coverage for the last three months; the worst they could do is drop you now and send you your COBRA notification within the next 45 days.
posted by gerryblog at 5:12 PM on March 12, 2012

(What I mean to say there is that the worst they could do is start the COBRA clock now -- they couldn't decide you lost coverage months ago.)
posted by gerryblog at 5:14 PM on March 12, 2012

The problem you may run into is that, on a group plan, you need to be an eligible member of the group to be covered (probably a full time employee, but this depends on the contract they have with the provider). You could find an insurance company coming back and saying that you weren't covered for services.

I would follow up, get the cobra coverage in place (if you can).

On preview, I'm not sure that gerryblog is correct, but I'm not certain I am either. Follow up on this....
posted by HuronBob at 5:21 PM on March 12, 2012

I KNOW gerryblog is correct because it just happened at my company last week. Someone was never deleted off the plan when they terminated back in October (it was before I started!!). I canceled his coverage as of 2/29 and sent the COBRA notification, that was my only option to be in COBRA compliance. You can't go back and cancel it months back, that is out of COBRA compliance.

But it is still wrong to not tell them. Of course I can't figure out how your HR person doesn't know you were laid off, it must be a huge company. Even working at a company with 10,000 ees I was still aware of all laid off employees, layoffs are a sonovabitch.
posted by magnetsphere at 5:42 PM on March 12, 2012

OP here: made a sock puppet to respond. Apologies to the mods from not making it earlier.

magnetsphere, it's actually a very small company, and the HR director is very aware that I was laid off. I suspect that she's intentionally left me on, possibly out of pity or redirected guilt.

Good to hear that more than likely, nothing will happen except that I will get a COBRA letter eventually. Thank you for the expertise.
posted by mcpuppet at 5:53 PM on March 12, 2012 [1 favorite]

That could be bad news: if your definition of "very small" is "less than 20 employees," you might not be eligible for COBRA at all.
posted by gerryblog at 5:55 PM on March 12, 2012

Oh no, the company itself has about 400 employees. But the department in which I worked, which included the HR director, was very small.
posted by mcpuppet at 5:59 PM on March 12, 2012 [1 favorite]

HR always had the option just to put you out on unpaid maternity leave, which could leave you still covered by the group policy. This period can cover up to ninety days (12 weeks in some states) of unpaid maternity leave. I'm pretty sure it remains in effect even if you file for unemployment.

Sounds like you fit, and they're pretty accommodating for a company that lays off pregnant women...I doubt those kinds of layoffs would play well in Peoria, and they're trying to make nice. It's their money; they can play it to your advantage for as long as they wish, i.e, you're a consultant. It's when they try to make it disadvantageous to you that the gummint steps in.

So, probably no harm, no foul. Send the HR director a nice note with a picture of the baby in it, and ask in the middle when your COBRA letter should arrive. Oh, and tell everybody you said, "Hello!"
posted by halfbuckaroo at 6:33 PM on March 12, 2012

I've been in touch with HR to add baby to my plan with no trouble or mention of coverage arrangements.

I'm sorry I failed to notice this on the first read through, but this is probably the most advantageous thing of all. The baby will automatically transfer with your COBRA election paperwork. That one thing will save you no end of paperwork, believe me.

I'm also sure you have received hospital bills for your delivery, and have already seen what is covered and what is not, correct?
posted by halfbuckaroo at 6:48 PM on March 12, 2012

Wow, it's pretty ballsy to lay off a pregnant woman. My guess is that they either left you on as part as your unpaid maternity leave, or HR is trying to keep you happy because this is the kind of stuff that gives employment lawyers heart palpitations.

Regardless, you should be fine -- from my brief and very unillustrious career in insurance, I seem to recall that it's up to the employer to decide who's in the group, not the insurance company.

FWIW, I had an employer keep me on insurance for a couple of months when I had a gap between working and grad school. Nothing ever came of it.
posted by snickerdoodle at 8:10 PM on March 12, 2012 [1 favorite]

[As per usual, this is not a place to just complain about health insurance. Please answer the OPs question. Thank you]
posted by jessamyn at 8:29 PM on March 12, 2012

snickerdoodle: "Regardless, you should be fine -- from my brief and very unillustrious career in insurance, I seem to recall that it's up to the employer to decide who's in the group, not the insurance company."

AFAIK, this is true. I once had "employee" health insurance coverage from a company I never worked for. I did some consulting work for the owner and his many companies and somehow it came up at a dinner that I was one of the uninsured and that somehow led to an HR person sending me a form to fill out. Maybe that should have been a clue to raise my rates so I could afford my own rather than just enjoying the subsidized insurance.
posted by wierdo at 8:44 PM on March 12, 2012

Unless they are nice and willing to provide free services: they will bill you for everything they wrongly paid for. Someone will eventually get paid to audit their records, your profile will come up.

Companies just don't pay for insurance.
posted by Bun Surnt at 8:52 PM on March 12, 2012

Hospital bill has been both received and paid, nothing particularly out of the ordinary there. Thanks everyone.
posted by mcpuppet at 6:22 AM on March 13, 2012

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