Over Age Dependents
Coverage must be ended timely for dependents that are no longer eligible to continue coverage due to age in order for COBRA notifications to be triggered. We have added in new plan setting options that can enable the drop of over age dependent coverage automatically by the system. This feature is part of a COBRA project, therefore this option is currently built for medical, dental, and vision plans. As of March 2017, the dependent auto drop option has been expanded to pediatric dental, voluntary life plan models, and basic life. We plan on expanding to COBRA eligible EAP plans the next phase.
Activating Option on Plan
On plan setup, in the Eligibility Options, there is a new option called “Enable Auto Drop of Over Age Dependents.” When enabled, the system will end coverage for an overage dependent based on timing described in the below process. Coverage end rules are applied based on the drop rules.
Dependent Drop Rules
Birthday- Last day of coverage is day before birthday.
End of Month – Last day of coverage is the last day of the birth month.
End of Plan – Last day of coverage is the last day of the plan year.
- End of Calendar Year - Last day of coverage is the last day of the calendar, not plan year. (note: this option is only available for selection under plans that are setup on an off-cycle plan year - e.g. 7/1/16 - 6/30/17. For calendar year plans, select End of Plan).
The dependent drop rule will be added to the Overage Dependent Report to help audit when an overage dependent should come off the report, even if the auto drop is not enabled.
Auto Drop Process Overview
We created a nightly job that will look for any over age dependents enrolled in a plan that has activated the new Auto Drop feature. If the end rule for the enrolled plan is set to Birthday drop rule, the coverage will be ended on the birthday and the first day without coverage is the birthday. If the end rule for the enrolled plan is set to End of Month, the coverage will be ended when the nightly job is run on the last day of the birth month, with an effective date of the same day.
For plans with drop rules of End of Plan, the coverage is ended through the open enrollment process instead of the nightly job. The auto drop will pick up the over age dependents for plans that are ending within the open enrollment period and who have enabled the auto drop. The coverage is ended when either the passive enrollment is processed (the enroll tab in open enrollment) or when the closeout is finalized. Coverage is ended on the last day of the plan year.
In all cases, we have created a new coverage end reason identifying the coverage was ended through the automated process and assigned this as a COBRA eligible end reason to be picked in all COBRA QE notifications.
Notification of Drop
If wall feeds are setup with the trigger for 'End Coverage', dependent coverage ended via the auto drop feature will be included in these email/wall notices.
- Once the feature has been activated, the next morning around 2:00am the system will automatically review all current enrollments and drop any dependents who were previously missed and still enrolled.
- An auto drop will NOT be set to pend for HR approval as this is a system setting that implies it should be automatically applied without approval.
- Setup for overage dependent drop is not supported at this time on issue age plans (plans that do not change as employee ages into a new rate tier) because the automated job is not supported for any of these products.