COBRA Benefits: Triggering Events

If you are a small business who is required to follow the requirements of COBRA, you should be familiar with and have an understanding of what constitutes a “triggering event”.  You should remember that these events may be in addition to the regulations regarding workers compensation that must legally be followed in your state.  Situations or events that trigger coverage are often referred to as qualifying events.  The list below identifies some such events.

• an employee’s voluntary or involuntary termination of employment, unless it is for gross misconduct. COBRA does not define misconduct, but some criteria to use if you are thinking of denying COBRA benefits on the basis of misconduct are:

1. There must be a connection between the offense and the employee’s job.
2. The employee must be able to understand the gravity of the misconduct.
3. The offense must be willful.
4. If the departing employee decides to challenge your determination, you’re probably going to end up in federal court. Balance the estimated costs of fighting the enforcement suit against the estimated costs of the COBRA coverage.

• an employee’s reduction in hours of employment (e.g., from full time to part time)
• a covered spouse’s divorce or legal separation from an employee
• an employee’s death
• an employee’s entitlement to Medicare
• a covered dependent’s change in status (for example, reaching an age that no longer qualifies the dependent for coverage under the parent’s health plan)
• active military duty when you don’t voluntarily maintain health coverage
• failure to return to work at the end of family and medical leave where coverage was in effect at the beginning of the leave but was lost during the leave
• your business’s bankruptcy