COBRA can be challenging to navigate. While many assume it only applies to job loss or loss of coverage, the regulations go far beyond that. Each case can involve different rules, and overlooking the fine print can lead to costly errors or lost coverage opportunities.

Why the Details Matter

COBRA is very fact-specific. Timing, eligibility, and the specifics of coverage all matter. Consider these examples:

• An employee quits but remains covered under a spouse’s health plan. The employer is still required to offer COBRA. In Geissal v. Moore Medical Group, the Supreme Court confirmed that existing coverage elsewhere doesn’t eliminate COBRA eligibility.
• An employee turns 65, enrolls in Medicare, and voluntarily drops their employer health plan. It may seem like the younger spouse is eligible for 36 months of COBRA, but that’s incorrect. COBRA requires both a qualifying event and an actual loss of coverage.

Common COBRA Missteps

• Domestic partners are not considered qualified beneficiaries under COBRA, even if they were enrolled in the health plan
• An offer of Retirement plans that mirror group health coverage still requires a COBRA offer if a qualifying event occurs and there are any payment changes or steps an employee must take to choose the coverage
• Spouses can’t immediately switch to a different plan after a qualifying event—they must wait for open enrollment

Employer Responsibilities

Even with a third-party administrator (TPA) managing your COBRA processes, ultimate responsibility lies with the employer. According to the Department of Labor and IRS, plan sponsors should:

• Review COBRA activity on a regular basis
• Verify the accuracy of file feeds and payment processing
• Monitor TPA reports for completeness and compliance

Termination and COBRA Eligibility

Termination for cause does not necessarily eliminate an employee’s COBRA rights. Unless the dismissal involves gross misconduct, which is not defined, COBRA coverage must still be offered. Always consult legal counsel before invoking gross misconduct.

How Medcom Can Support You

COBRA compliance can be complex, but you don’t have to handle it alone. Medcom offers comprehensive COBRA administration from timely notice delivery to payment tracking and compliance support. Our team is here to help you stay compliant and focused on your business.