Sofia's Surgery: Two Group Plans and a Job Loss at a 12-Person Employer
Maria works for a 12-employee landscaping company in Hartford that offers a fully insured group major medical plan with a $1,500 family deductible that has already been satisfied this year and 80% coinsurance in network. She is also covered as a dependent under her husband's plan through a 200-employee employer, which has no deductible and pays 90% in network. Their daughter Sofia, 9, is covered under both plans. In March Sofia has an appendectomy; the negotiated in-network allowable is $21,500. Maria's birthday is April 2 and her husband's is November 11. In August Maria is terminated after five years. Her termination letter says nothing about continuing coverage, and no election form is enclosed.
1. Which plan is primary for Sofia's claim, and how much does each plan pay? Show the coordination-of-benefits arithmetic.
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Order of benefits - the birthday rule. For a dependent child of married parents covered under both plans, the plan of the parent whose birthday falls earlier in the calendar year is primary. Maria's birthday is April 2; her husband's is November 11. Maria's plan is primary, regardless of which parent is the policyholder of record or which plan is larger.
Primary plan (Maria's). Allowable $21,500, deductible already satisfied, 80% coinsurance:
- Pays 0.80 × $21,500 = $17,200.
- Balance remaining: $21,500 − $17,200 = $4,300.
Secondary plan (husband's). It does not simply pick up the $4,300. The standard method pays the lesser of:
- the remaining unpaid balance - $4,300; or
- what it would have paid had it been primary, minus what the primary actually paid - (0.90 × $21,500) − $17,200 = $19,350 − $17,200 = $2,150.
It pays $2,150.
Patient responsibility: $21,500 − $17,200 − $2,150 = $2,150.
The common error is assuming the secondary plan "tops up" to 100%. Coordination of benefits is designed to prevent the family from recovering more than the allowable, not to eliminate cost sharing. Maria should also confirm that her plan's 80% is not reduced by a separate out-of-network penalty, and that no prior-authorization issue exists.
2. Does Maria have any right to continue her group coverage after termination? Identify the applicable regime, the maximum duration, and the employer's failures.
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Federal COBRA does not apply. COBRA reaches employers that employed 20 or more employees in the prior year. A 12-employee landscaping company is outside it, and Maria's letter says nothing because the federal statute is not in play.
Connecticut continuation applies. Connecticut's "mini-COBRA" statute covers group health plans of employers with roughly 2 to 19 employees. Key features:
- Up to 18 months of continuation for termination of employment (longer in certain disability cases).
- The qualified beneficiary pays the premium, capped at approximately 102% of the group rate.
- The employee must be allowed an election window (commonly 60 days) running from the date notice is provided.
- The employer must give written notice of the right to continue.
The employer's failure. Sending a termination letter with no continuation notice and no election form is itself a violation - Maria cannot elect a right she was never told she had. She should demand the notice in writing immediately, keep proof of the date she requested it, and file a complaint with the Connecticut Insurance Department if it is not provided.
Practical timing point. Continuation is not automatic; the clock generally begins with the notice. Because no notice was given, Maria should document the gap and request that her election window be measured from the date she actually receives the paperwork.
3. Maria starts a new job in October. Her new employer's plan states that conditions treated in the previous six months are excluded for six months. Is that enforceable?
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No. For group major medical coverage, federal law prohibits preexisting condition exclusions entirely, regardless of the enrollee's age or the source of prior coverage. The six-month look-back and the six-month exclusionary period are both unenforceable whether Maria's history is a back injury, a pregnancy, or a prior surgery for Sofia.
What the plan may still do. Impose a waiting period of no more than 90 days before coverage begins. That is an eligibility delay, not a preexisting condition exclusion, and it is permitted.
How Maria should handle it. If the plan or the administrator applies the exclusion to a claim:
- Request the denial in writing with the specific plan provision and the reason.
- File an internal appeal, citing the prohibition on preexisting condition exclusions in group health plans.
- Escalate to the Connecticut Insurance Department (for the fully insured plan) or the U.S. Department of Labor (for an ERISA plan), and request expedited review if treatment is ongoing.
What to watch for. Some plans bury a lawful exclusion - for example, a cosmetic or experimental-treatment exclusion - and describe it as "preexisting." The question to ask is whether the plan is denying because of when the condition arose, which is prohibited, or because the service itself is excluded, which may be permitted. Sofia's appendectomy and Maria's own history should both be covered from day 91 at the latest.