Q: Sometimes we offer to extend a departing teacher or staff member’s benefits coverage to help them through a difficult period (such as if they need coverage until they find a new job). As long as we communicate clearly with them, is there any problem in doing so?
A: Unfortunately, there are several problems with doing this:
- The most important is that you may be violating your agreement with your insurance provider (Blue Cross, United Healthcare, etc.), which might invalidate the former employee’s coverage.
- Another issue is that you may be clouding the individual’s COBRA (continuation of benefits) status. (Note: COBRA is the federal law governing extension of benefits coverage for former employees.)
- Finally, you may open the school to a potential discrimination claim by current or future employees who are not treated the same (i.e., offered the same benefits extension) when they leave the school.
All of this may put the school in a legal and financial bind if the school now has to scramble to make arrangements to purchase individual coverages for the former employee to satisfy verbal promises or written agreements, or assume the financial risk of the coverages that could not be continued. This is to say nothing, of course, of the potential embarrassment of telling the former employee the coverage she thought she had is invalid.
When taking any special actions regarding benefits, consult first with your benefits provider or broker. Be sure to get a firm, detailed answer and understand what you can and cannot do before coming to any final agreements with departing employees. Taking this time upfront can save you enormous bills and headaches in the future.
Once a month, ISM's HR Consultant Michael Brisciana answers a question from our Monthly HR e-Letter readers. If you have a question about an HR matter in your school that you would like addressed, please e-mail Michael at mbrisciana@isminc.com.
