A qualifying event is a life event resulting in a loss of group coverage. The most common COBRA Qualifying Events include the following:

• Termination of Employment: voluntary or involuntary.
• Ineligible dependent: Child who turns 26 and ages off the active insurance coverage; the dependent is the QB, NOT the parent/employee.
• Loss of coverage: Death or divorce/legal separation; the dependent(s) become the QB.
• Entitlement to Medicare: This event is only for the spouse or children covered under the group health plan. This typically only happens if the employer offers retirees under 65 access to a retiree health plan.
• Reduction in hours that cause a loss of coverage.
• Employer Bankruptcy.

• COBRA qualifying events trigger the employer to notify the third-party administrator (TPA) with specific required information within 30 days of the event so that TPA can send the member paperwork and an election form (Specific Rights Notice).
• By federal law, the initial election notification process (notifying the former employee and qualified beneficiaries) can take up to 44 days from the event date.
• COBRA Qualified Beneficiaries have up to 60 days from the date of the Specific Rights Notice or the Qualifying Event date, whichever is later, to elect coverage.
• Upon receiving the COBRA election, the TPA will notify the applicable carrier(s) of the COBRA reinstatement once the initial payment is received and notify all other relevant parties about the reinstatement.
• The coverage is retroactive to the First Day of COBRA, and there cannot be a lapse.

Federal COBRA requires coverage extended from the qualifying event date for 18-36 months, depending on the reason/qualifying event.

• 18 months: termination, retirement, reduction in hours, employer bankruptcy
• 36 months: death of an employee, divorce, legal separation, ineligible dependent (turning 26), employee’s entitlement to Medicare

Note that state continuation may extend these coverage periods. 

In certain situations, coverage can be extended to the maximum allowed. Examples include:

• A spouse who is receiving COBRA coverage divorces the covered employee.
• A child who is receiving COBRA coverage ceases to be a dependent.
• A covered employee dies while one or more qualifying beneficiaries is receiving COBRA coverage.

COBRA regulations allow members to send payment any time during the Initial Premium Payment Grace Period, which lasts 45 days from the date the member elects COBRA coverage.

• The initial premium payment includes any premium due from the effective date of the plan(s) through the current month. The premium payments must be postmarked during the 45-day window, or the member’s coverage will be canceled.
• A QB receives a 45-day First Premium Month Paid letter when they submit the election form with a payment that covers only one month of their premium, but they owe for multiple months. This letter details the member’s payments to satisfy the initial premium payment requirement and avoid having their plan (s) canceled.
• A request to reinstate coverage is sent once the initial premium payment is paid in full.

Subsequent premiums are due on the 1st of each month and must be postmarked by the 30th. The insurance carrier has the right to suspend coverage between the 1st and 30th, reinstating benefits when premiums are received.

• Changed By QB: COBRA is continuation coverage. This means the individual is “continuing” the coverage they had before the qualifying event. However, they can change their coverage during an annual open enrollment period if they elect COBRA.
• Changed By Employer: If the employer’s insurance premium increases, the premium for those enrolled in COBRA will also increase.

COBRA continuation coverage can be terminated for any of the following reasons:

• The employer stops maintaining any group health plan.
• A QB begins coverage under another group health plan.
• Premiums are not paid in full on a timely basis.
• A QB becomes entitled to Medicare benefits.
• A QB engages in fraud or other conduct that would justify terminating coverage.

The plan must provide the QB with an early termination notice if continuation coverage is terminated early. If this coverage is terminated early, covered individuals generally can only enroll in a Marketplace plan during the open enrollment period.

Employers sometimes pay for all or a portion of a COBRA premium for several months as a part of a separation agreement. The employer should communicate this with their third-party administrator (TPA) so the TPA can generate a subsidy notice, updated rate tables, and coupons for payment. 

• If one or all plans are canceled, a refund may be due to the member, depending on the current date and premiums submitted. If all COBRA plans are canceled, a member can request a refund if they are paid to date through the end of their coverage period.
• Refunds can also occur/be requested if employer subsidies are applied after payment has been made.