Health plan termination--bankruptcy--automatic stay--COBRA. In re Health Management Limited Partnership.
Even though an insurer provided telephone notice of termination of a group health plan's insurance coverage for failure to pay the required premium on the same day the employer filed a bankruptcy petition and gave written notice after the petition was filed, it did not violate the bankruptcy code's automatic stay provision. This is because a special payment plan provided for an extended grace period and automatic termination upon failure to pay the premium in full by the end of that period, and the final due date was before the debtor filed the petition. Thus, termination occurred automatically before the bankruptcy petition was filed. The insurer is not the plan administrator and is not obligated to provide COBRA notice to the debtor's employees, especially since the employees could not elect to continue coverage under a group health plan when the insurance coverage had been terminated. An employee's right to elect to continue coverage under the employer's group plan presumes there is coverage available to continue.
D016361:Bankruptcy; D006264:Health Benefit Plans, Employee / Q000331:legislation & jurisprudence*; D006801:Humans; D019458:Insurance Coverage / Q000331:legislation & jurisprudence*; D014481:United States