Offer COBRA to dismissed employee?

System

Are you required to offer COBRA to an employee who was dismissed for gross misconduct?

Theresa Gegen TX

There is an exception to COBRA that can be triggered based on the reason for termination. However, any employer who wants to deny COBRA should tread very carefully. The downside, if you are wrong about the denial, can be a huge liability for medical bills. So before deciding whether to deny cobra, the company needs to review the regulations closely AND do a seperate cost/benefit analysis.

GOOD LUCK!

John Phillips TN

No, but it is very difficult to prove that an employee is guilty of misconduct
under COBRA. You need to get legal advice on the specific facts before making
the decision to not offer COBRA.




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To: John Phillips/M&M@MMIS
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Subject: COBRA



Are you required to offer COBRA to an employee who was dismissed for gross
misconduct?

CuriousG

COBRA does provide an exception to offering COBRA rights to an employee guilty of misconduct. There is a bit of urban legend about the strict regulations issued to implement this. The story has it that a Senate Aide working on the COBRA bill was asked by a Committee member what the definition of "gross misconduct" was.

Supposedly the answer went like this:

"Well Senator, it depends on the situation of the case. For instance, if an employee entered the headquaters of GM, and went to the office of the Chairman of the Board and shot the Chairman, GM could deny the employee COBRA rights only if the Chairman died!"

While it is a silly story, it does illustrate the very strict limits on "gross misconduct" that Congress, and the beaureaucrats considered when framing COBRA.