Life Events that Affect COBRA Administration

​Employers often ask us how to determine what is a qualifying event versus what is a life event. In a nutshell, COBRA qualifying events are those which cause a loss of coverage under the group health plan, causing an individual to become eligible for COBRA whereas a life event is something that triggers a change but doesn’t cause a loss of coverage.

While qualifying events are covered in great detail in another post here,  we wanted to touch on some of the life events that do influence how COBRA administration should be handled depending upon the circumstances of the event. Hence, it is imperative that Employers understand common life events that affect a qualified beneficiary’s COBRA rights so that things can go smoothly during the COBRA continuation coverage period and so that the employer remains in compliance with the law.
Here are some common life events that can impact how COBRA should be handled:

1. Birth or adoption of a child: If a covered employee gives birth to or adopts a child during a period of continuation coverage, the newborn is automatically considered to be a qualified beneficiary receiving COBRA continuation coverage. Plans have special rules surrounding the requirements to report newborns and adopted children in order to secure enrollment into the group health plan benefits, so it is important that qualified beneficiaries are made aware of your plan’s requirements. In most cases, the general rule is that a newborn or newly adopted child must be reported to the plan within 30 days of the date of birth (or date of adoption) in order to enroll in the COBRA continuation coverage.

​2. Marriage: If a covered employee should marry during a period of continuation coverage, then the spouse becomes eligible for the COBRA continuation coverage so long as no other coverage is available such as group health coverage through the spouse’s employer. Each plan has reporting requirements and deadlines for newlyweds when it comes to COBRA enrollment, but the general rule is that spouses must be reported to the plan within 30 days of the date of marriage. Sometimes there is more time allotted so employers should always know their plan timeframe requirements for adding new spouses.

3. Divorce during time of continuation coverage: Divorce during the time of continuation coverage: This one can be tricky. Divorce of a covered spouse is a COBRA qualifying event but it is also sometimes a life event. What we mean by this is that oftentimes, once the divorce is finalized, the primary insured (covered employee) who is on COBRA continuation coverage is often overlooked when the second qualifying event occurs. It is important that employers remember to make the necessary coverage level changes once both individuals are on “single” and not the “employee plus spouse” tier of coverage. This change needs to be made timely so that the primary insured receives an updated COBRA premium to pay, having moved from the higher to the lower tier of coverage.

4. Moving: It is important for qualified beneficiaries to report their new contact details when they move so that they do not encounter coverage issues or miss important mailings. Be sure your employees and COBRA participants have adequate information about how to report changes of address and the plan’s requirements on the protocol for doing so.​

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