Under what conditions can COBRA rates be increased?
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Under what conditions can COBRA rates be increased?
Our county school board has a self-funded health plan. In 2010, they increased COBRA rates and retiree rates only. They did not increase the costs to current/active employees. Is this legal? Seems to circumvent the federal COBRA laws/intent.
Asked on February 23, 2011 under Employment Labor Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Under COBRA, former employees have the right to continue their health insurance at essentially the same rates as current employees receive. Note the following:
1) The former employee receiving health care via COBRA can be made to pay the entire premium, rather than only the employee porton--i.e. while the employee gets the benefit of the group rate, the employer does not have to subsidize him or her.
2) It appears that a small premium (2%) can be charged over the group rate, for the administrative costs.
3) While rates are typically fixed for 12 months at a time, they can increase as the plan costs increase.
Here is a link to a Dept. of Labor FAQ sheet that you may find informative: http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.HTML
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