COBRA - open enrollment (plan, coverage, benefits, group)

[loincloth]

While working for my last employer, I recall being offered a choice of 4 health insurance plans every August under the open enrollment option. I rec'd a layoff notice in late spring (2007); I worked through mid-June; my last paycheck was issued August 15, 2007 (I was paid over 12 months for 10 months of teaching).

My health care premiums were paid by my former employer through the end of August 2007. I was mailed the COBRA enrollment documents in a timely manner. I immediately enrolled and paid my initial premiums for September 2007.

What I wasn't provided, in retrospect, was an opportunity to participate in open enrollment. I was verbally informed by the office manager that I could not change my coverage under COBRA continuation. Of course, when my employer was paying 100% of my health insurance premium, I had always selected the best (i.e., most expensive) policy.

Being laid off unexpectedly, a lot of worries set in. I was scrambling to find a new job before the new school year commenced. As lemmings do, I paid the COBRA payment in a timely manner. If I knew then what I know now, I would have insisted upon being offered the same open enrollment options to which current employees are entitled. I could have selected a policy that is $300 less per month than my current premium of $667. I have reached a point in which I can no longer afford this amount.

My question, then, is this:

Was my former employer negligent in their duty to provide me with open enrollment forms/options? If so, is there any chance I can switch to the lower cost policy before the next open enrollment period in August?

I feel I was misled and not given the same open enrollment options as those still on payroll. I am hoping I can either change to the cheaper policy, or maybe leverage their negligence to force them to pay the difference in cost (between now and August, not retroactively).

If you're still reading this rather lengthy post, THANKS! Any insight greatly appreciated.

P.S. I have Type 2 diabetes, so I would prefer to continue coverage through employer-sponsored group policy, rather than purchase individual policy and then cancel COBRA.

[Niners fan]

Some employers handle COBRA themselves but many allow the insurance companies to take care of it for them. I would call the insurance company directly and ask if you can switch to a lower cost plan. My guess is that you can't switch companies at this point. You might not even be able to switch at open enrollment since you are no longer an employee. But I am far from a COBRA expert. I just know what we do for our employees.

[bibit612]

Here's my take on your post (please correct if I'm wrong):

You worked through mid-June 2007
Open enrollment materials are mailed in August 2007 for what effective period? September 2007?
Open enrollment materias are mailed out to active employees only.
You were sent letter of term in spring 2007...you dropped out of active employee roster after your last day in June, regardless that your paycheck came mid-August.
COBRA by definition is extension of what current bennies you have at time of termination.
Therefore, I don't believe that your employer was obligated to 1)send you the OE materials as they would have active emps and 2) allow you to retro enroll in the lower cost offering

I think it is not so much that your employer would not make an exception but the systems that run payroll and benefits are so complex in their checks and balances that the system may not be able to make an exception of an OE form being sent to a non-active emp.

[loincloth]

You were sent letter of term in spring 2007...you dropped out of active employee roster after your last day in June, regardless that your paycheck came mid-August.

I was actually still considered to be on payroll through August 2007. My benefits were still covered and payments were still made into my pension plan. It's a quirk that occurs for teachers due to contractual requirements to work until a certain date, while getting paychecks spread out over the entire 12 month period.

COBRA by definition is extension of what current bennies you have at time of termination.

I found this passage buried in my COBRA enrollment papers:

"Continuation coverage is the same coverage that the Plan gives to other participants or beneficiaries under the Plan who are not receiving continuation coverage. Each qualified beneficiary who elects continuation coverage will have the same rights under the Plan as other participants or beneficiaries covered under the Plan including: open enrollment and special enrollment rights. The persons listed on page one of this notice have been identified by the Plan as qualified beneficiaries entitled to elect continuation coverage."

I called the office manager and pointed this clause out to her (we are on very friendly terms) and asked her why she didn't send out OE forms to me as she had done for everyone else. She was unaware of this provision, likely due to the fact that benefits administration is handled by a third party, although she is responsible for submitting enroll documents and changes. I don't find fault with her; it's obvious that she was never trained by the company that handles the benefits. One would think the central office that sent me the COBRA enrollment forms would have also sent me OE forms; apparently they assumed the school's office manager would send the OE forms.

[bibit612]

Reading through the quote, then I believe you are within your rights within ERISA to be eligible for enrollment under the new terms, and entitled to lower premiums. If they screwed up in their system, they can just trick the system to "think" you were a new hire, "terminate" you, so that your COBRA election will now reflect the new terms.

[Niners fan]

I agree you might have an argument. Good luck with this. Most people would be surprised how many state regulations there are about open enrollment periods. The school might have messed up but it might also be that their hands are tied.

A lot of insurance problems could be solved if employers stopped providing coverage directly and employees bought their own policies (perhaps with subsidies from the employers). They you could take the policy with you from job to job. But I guess that is a subject for a different thread...

[loincloth]

Thanks for your insight bibit612 and Niners fan. It's always nice to run something by others who can provide a more objective viewpoint.

Now if I can actually get a human to answer at the policy administrator's 800 number. It is easily the most annoying service number I've ever dealt with, and that's saying a lot! You know, the type that tells you to please hold for next available rep; and then it rings, only to be answered by another reminder to please hold, and so on, and so on...

Twenty minutes of false hopes and rings before I could leave a message. Not only that, they preface it by informing callers that "we receive a lot of messages ... we might not be able to get back to all of them ... we respond first to those demanding immediate attention..."

Message triage! But I digress...

Anyway, thanks again.