COBRA Qualifying Events

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is a federal law that requires most employers to provide employees, spouses and dependent children who lose group health benefits due to a qualifying event with an opportunity to continue group health coverage for a limited period of time.

An employer must offer COBRA coverage only when group health plan coverage ends (or would end) due to a qualifying event. COBRA includes a specific list of seven events that can be considered qualifying events if they result in a loss of group health plan coverage:

  1. Termination of a covered employee’s employment (other than for gross misconduct)
  2. A reduction of a covered employee’s hours of employment
  3. A divorce or legal separation from the covered employee
  4. The death of a covered employee
  5. Ceasing to be a dependent child under the terms of the plan
  6. The covered employee’s entitlement to Medicare
  7. Employer bankruptcy (for retiree plans)

If an employee or dependent loses group health plan coverage for a reason that is not a COBRA-qualifying event, the employer is not required to offer COBRA coverage. Similarly, if the qualifying event does not cause a loss of group health coverage, the employer is not required to offer COBRA coverage.

Not all losses of health plan coverage are caused by qualifying events.

For example, a cancellation of health plan coverage—whether at the employee’s request or because of the employee’s failure to pay premiums—is not, by itself, a qualifying event that triggers the requirement to offer COBRA coverage. Likewise, cancelling coverage for an ineligible individual who was mistakenly covered by the health plan is not a qualifying event for COBRA purposes.

To lose coverage means to cease to be covered under the same terms and conditions that were in effect immediately before the event. Often, there is a complete loss of coverage due to a qualifying event (for example, a complete loss of health plan coverage following an employee’s termination of employment). However, even a partial loss of coverage can trigger COBRA rights. For example, a loss of coverage includes an increase in employee premiums or contributions as a result of a qualifying event.

Plans Subject to COBRA

Almost all employers with group health plans must comply with COBRA, including corporations, partnerships and tax-exempt organizations.

There is a small employer exception to COBRA—an employer’s group health plan is not subject to COBRA if the employer normally employed fewer than 20 employees during the preceding calendar year.

Pennsylvania Mini-COBRA

Mini-COBRA, or Act 2 of 2009, is the law in Pennsylvania that gives employees of small businesses (2-19 employees) who receive health insurance from their employers the right to purchase continuation health insurance after they leave employment.  It allows eligible employees and dependents to purchase health insurance for nine months after their employment ends.

Pennsylvania’s Mini-COBRA is modeled after the federal COBRA law, but with some important differences. The federal COBRA law allows employees at larger businesses (20 or more employees) to purchase continuation health coverage after they leave employment for 18 months (or, in some cases, 36 months) after their employment ends. Pennsylvania’s Mini-COBRA applies to employees of smaller businesses (2-19 employees) and it is for a shorter length of time (nine months).

Qualified Beneficiaries

Under COBRA, a qualifying event triggers an obligation to offer COBRA coverage to qualified beneficiaries.

Qualified beneficiary: Any individual who is covered under a health plan on the day before the qualifying event because he or she is:

  • An employee;
  • The spouse of a covered employee;
  • The dependent child of the covered employee; or
  • Any child who is born to or placed for adoption with a covered employee during a period of COBRA continuation coverage.

Each qualified beneficiary has an independent right to elect COBRA. For example, if an employee and his or her spouse were covered under the health plan on the day before the qualifying event, the spouse may elect COBRA even if the employee declines coverage.

Maximum Coverage Period

The period of COBRA coverage offered to qualifying beneficiaries is known as the “maximum coverage period.” The length of the maximum coverage period depends on the type of qualifying event that has occurred. It is:

  • 18 months for a termination of employment or reduction in hours; and
  • 36 months for all other qualifying events.

There are situations where the maximum coverage period can be extended (due to disability or a second qualifying event) or terminated early (for example, when COBRA premiums are not paid).

For more information on Federal COBRA and PA Mini-COBRA contact Power Kunkle at 610-685-1790.


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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.