COBRA

seaclusion

Could you please verify that if an employee voluntarily drops insurance due to a qualifying event but continues employment, such an action does not trigger COBRA?

Pearce

I am assuming that you mean a change due to a Section 125 qualifying event, such as a spouse's open enrollment or new job. These 125 qualifying change events would not trigger COBRA. The plan would be required to provide the HIPAA certificate of creditable coverage. Also, be aware that even events that do not trigger COBRA might make someone COBRA eligible at a later date. An example would be an employee dropping a spouse at open enrollment (not a COBRA event). If the employee took this action because of a pending divorce then the dropped spouse would be COBRA eligible at the date of the divorce if the plan is timely notified of the divorce. The period between dropping the spouse and the divorce would not be subject to COBRA coverage - thus there would be a gap in coverage.

Moria

Can I take this question down a bit of a different path. The scenario is that as the employer we offer a voluntary dental plan (100% employee paid). We have an employee who has terminated. The dental plan says that we can continue to cover the employee, the employee pays us and we keep her on the billing. Do we have to do that under COBRA?