COBRA Test

Test Yourself On COBRA Compliance

1.) Employee Tom drops his wife, Mary, from his insurance coverage on January 1. Two months later, their divorce is finalized.Mary informs you immediately of the divorce, but you inform her that Tom dropped her coverage on January 1. You tell her COBRA is not available because on February 28, the day finalized, she had no coverage. Can the employer deny Mary COBRA election under these circumstances?

Yes or No?

2.) Paul quits his job at ABC Company on March 31st. The employer gives Paul his COBRA notice during his exit interview. Pauls' wife, Mary, needs a bone marrow transplant in July. Paul did not elect COBRA. Can Mary sue the ABC Company for the $200,000 operation?

Yes or No?

3.) Lisa, 64, terminates her employment and elects COBRA coverage for herself and Lyle, her husband. Lisa turns 65 twelve months later and elects Medicare Part A and B coverage for herself. How long can Lyle remain on COBRA?

A. He must be termed immediately
B. 6 more months to total 18 months
C. 17 more months to equal 29 months because of Medicare Qualifications
D. 24 more months to equal 36 months because of Medicare Qualifications

The correct answers are:

1) No
2) Yes, The ABC Company is required by law to mail a COBRA notice addressed to both the employee and spouse. The spouse did not know of the COBRA notice, since it was never sent to her, but given to her husband, Paul.
3) (D) Lyle can continue for a total of 36 months

The IRS and Department of Labor take COBRA enforcement quite seriously. They frown on any errors that deny Qualified Beneficiaries their benefits. Fines begin at $200 per day. Added to this are any medical or legal bills that accrue as a result of the error.

Working with terminated employees is not part of an employer's strategic profit plan. Penalties and fines are never budgeted expenses. Why assume the risk? ClientServ offers you the full range of COBRA administration and handles your risk.

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