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Paychex extended then retroactively de-stended my insurance end date. Any recourse?

Los Angeles, CA |

I was laid of July 20th. In the exit interview and severance letter, there was no mention of the cobra date. I received a letter from Paychex 3 days later stating that I was covered through August 31st and Cobra would start 9/1 if I elected it.

I have joint custody of 2 small children who are on this policy. I set up doctor's appointments for all of us for mid-late August as we'd hit our deductible and wanted to max out services.

They sent me a REVISED notice today stating that in fact the coverage ended July 31 and myself and my two boys have been without insurance since 8/1.

WTF? Do I have any recourse (other than pay $1400 for COBRA against my will)?

Attorney Answers 2


It sounds as though Paycheck made a mistake. The way most employer's medical insurance policies work is that the coverage remains in effect through the end of the month in which the premiums were paid. After that, the employee has the option to continue the plan through COBRA.

Since you worked in part of July, the premiums were presumably paid in July. But who paid the premiums in August? Unless this was part of the severance agreement the employer offered, probably no one paid the premium, thus no coverage. The only way to get those medical bills covered by the plan, would be by picking up the COBRA plan, at least for August.

You could write a letter to Paycheck requesting they reimburse you for the COBRA payment, since you relied on their representation that you were covered. They may be willing to take on the one month payment recognizing their error. In my opinion, they are not legally obligated to but it is certainly worth a try.

Good luck.

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If you have to litigate this, it will fall under the ERISA statute and you will need to hire an attorney that is well versed in ERISA issues.

Why is it you expect to be covered for a month when you paid no premiums? Pay the COBRA and it will likely apply retroactively to the date of the termination of the prior insurance, as long as you do so within the proscribed time period.

Good luck to you.

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