361 / What is a qualifying event for purposes of COBRA continuation coverage requirements?

A qualifying event is any of the following events that, but for the required COBRA continuation coverage, would result in the loss of coverage of a covered employee or a spouse or dependent child of a covered employee under the plan:

(1)     Death of a covered employee;

(2)     Voluntary or involuntary termination for reasons other than a covered employee’s gross misconduct ( Q 363) or reduction in hours of a covered employee’s employment;

(3)     Divorce or legal separation of a covered employee;

(4)     A covered employee becoming entitled to Medicare benefits;

(5)     A dependent child ceasing to be a dependent child for purposes of a plan; and

(6)     A proceeding under the federal bankruptcy law with respect to an employer from whose employment the covered employee retired at any time.¹

Taking a leave under the Family and Medical Leave Act of 1993 (FMLA) is not a qualifying event. A qualifying event does occur when an employee is covered under an employer’s group health plan the day before beginning an FMLA leave, the employee does not come back to work at the end of the leave, and the employee would lose coverage under the plan (other than under the COBRA continuation coverage) before the end of what would be the maximum coverage period. The same is true for a spouse or dependent child of the employee. The date that such a qualifying event occurs is the last day of the employee’s FMLA leave, and the period of maximum coverage is measured from this day.²

If an employer eliminates coverage for a class of employees to which an employee on FMLA leave would otherwise have belonged on or before the last day of the employee’s FMLA leave, there is no qualifying event.

A qualifying event can occur even if an employee does not pay the employee’s share of the premiums for coverage under a group health plan during an FMLA leave, or even if an employee declined coverage during FMLA leave.³ Further, COBRA continuation coverage may not be conditioned on an employee reimbursing an employer for premiums paid by the employer for group health plan coverage during an FMLA leave taken by the employee.⁴

There is no qualifying event where, following a termination of employment, a loss of coverage does not occur until after the end of what would have been the maximum period of COBRA continuation coverage.⁵