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Here at CobraHelp, we have encountered just about every COBRA related scenario that could possibly arise in our 34 years of providing national COBRA administration for our Clients.
While most COBRA participant and compliance related questions are fairly straight-forward to the primary guidelines of the COBRA law, there are scenarios we come across that even the most seasoned HR professionals might not know how to handle off-hand. To boot, these COBRA conundrums might not be easily answered by a Google search or the DOL’s Employer’s Guide to COBRA. In this post we’ll cover four employee benefits compliance scenarios that your HR department might be faced with, and ultimately responsible for when it comes to properly handling COBRA.While most COBRA participant and compliance related questions are fairly straight-forward to the primary guidelines of the COBRA law, there are scenarios we come across that even the most seasoned HR professionals might not know how to handle off-hand. To boot, these COBRA conundrums might not be easily answered by a Google search or the DOL’s Employer’s Guide to COBRA. In this post we’ll cover four employee benefits compliance scenarios that your HR department might be faced with, and ultimately responsible for when it comes to properly handling COBRA.
In the above scenario, the spouse will not be eligible to extend COBRA. “After-acquired” spouses have no additional COBRA rights such as extended coverage because under COBRA, one of the criteria which must be met in order to be considered a second COBRA qualifying event, is that the individual involved must have been connected to the first (original) qualifying event. Generally, individuals added to a COBRA plan after the original qualifying event are not qualified beneficiaries and do not have continued coverage rights under COBRA. The exception being children who are born to, or placed for adoption with, and are added to an existing COBRA plan and they experience a second qualifying event.
So what is a second qualifying event and who is eligible to extend COBRA coverage? Check out this definition, and criteria which must be met below:
Coverage extended from 18 to 36-Month Period Under COBRA. A spouse and dependent children who already have COBRA coverage, and then experience a second qualifying event, may be entitled to a total of 36 months of COBRA coverage. Second qualifying events may include the death of the covered employee, divorce or legal separation from the covered employee, the covered employee becomes entitled to Medicare benefits (under Part A, Part B or both), or a dependent child ceases to be eligible for coverage as a dependent under the group health plan. The five conditions below must be met in order for a second event to extend a period of coverage:
1. The initial COBRA qualifying event is the covered employee's termination or reduction of work hours, which results in an 18-month period of continuation coverage;
2. The second event that leads to a 36-month maximum period of coverage occurs during the first 18-month period of continuation coverage (or within the 29-month coverage period if SSA-disability extension applies);
3. The second event would have caused a qualified beneficiary to lose coverage under the plan in the absence of the first qualifying event;
4. The individual was a qualified beneficiary in connection with the first qualifying event and is still a qualified beneficiary at the time of the second event; and
5. The individual has met any applicable COBRA notification requirement in connection with a second event (i.e. notifying the plan administrator of a divorce or a child ceasing to be a dependent under the plan within 60 days after the event).
If all of these conditions associated with a second qualifying event are met, then the COBRA continuation coverage period for the affected qualified beneficiary (or beneficiaries) is extended from 18 months (or 29 months) to 36 months.
See above definitions for second COBRA qualifying events. Side Note: Under COBRA/ERISA, there is no scenario that exists where a qualified beneficiary can have more than 36 months of COBRA from the original qualifying event. 36-months is the maximum period of coverage under COBRA.
*Bear in mind that some plans, such as self-funded plans make their own special rules pertaining to these types of scenarios, and may determine that all employees are to be offered multiple coverage options at the time of a COBRA qualifying event. While this is rare, the important thing here is that Employers are consistent, ethical, and follow the rules set forth in the Group Health Plan provisions.