A self-insured plan will drop coverage for an ee's spouse upon divorce. If ee does not notify plan administrator of divorce immediately, other than COBRA issues, what legal implications if plan document is silent on notice procedures? Administrative issues involve the premiums paid vs. any claims paid during the period. Do state insurance laws usually address this issue?

If the plan document by definition, covers only legally married spouses then canceling coverage at divorce is standard whether or not the employee notifies the employer or not. I have never seen a document that says what method is to be used to notify the employer and don’t think it needs to be defined, but then I’m no attorney.

As to whether it can be a legal issue It seem that almost anything these days can turn into a legal issue.

Employees need to take some responsibility to let their employers know when someone is no longer an eligible dependent. Most people would at least expect that if they got divorced their former spouse would no longer be eligible for coverage and let their employer know.

In your initial notice of COBRA rights (which I know you provided to your enrollee upon enrollment) you should have a clear statement requiring the enrollee to notify the employer upon divorce so that COBRA continuation is triggered. If you have provided the proper documents and can verify that the enrollee and spouse received notification, you should have a pretty good case to deny COBRA based on untimely notification. As far as the other ramifications, you might have a strong case to deny benefits during this period based on common law fraud. I don't think that state insurance fraud law applies since this is technically not insurance. I can tell you that we successfully defended a case where we went back several months for refunds paid to providers, who then billed the patient, based on the fact that no one provided us notice that the parties divorce was finalized.

I didn't get the impression that RW's original post was related to a COBRA notice, but to an active employee. However, I agree with Jeanine's post related to COBRA.