Sixth Circuit Rules Change in Payment Method for Health Insurance Premiums Not COBRA Qualifying Event, Oct. 10, 2019

The Sixth Circuit, in reversing a lower court decision, found that a COBRA qualifying event did not occur to require an employer to provide an employee with a COBRA election notice when an employer changed the employee's payment method for paying the employee's health insurance premiums. In this case, the employee was injured and took FMLA leave. Since the employee was no longer receiving a salary, the employer deducted insurance premiums from the employee's workers' compensation benefits. Later, the employee's workers' compensation benefits ended and she stopped paying premiums. After her FMLA leave ended, the employee's employment was terminated and she sued the employer for failing to provide her with a COBRA election notice. The Sixth Circuit held that the change in premium payment method did not change the terms and conditions of coverage, and did not result in a loss of coverage, so no COBRA qualifying event occurred even though the employee eventually did lose health coverage due to nonpayment of premiums. For more information on COBRA qualifying events, visit Tax Facts Online.