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Question: During an open enrollment election period, if an employee drops spousal coverage, would this be a COBRA-qualifying event for the dropped spouse?

Our Response:  A group health plan is required to offer COBRA continuation coverage only to a qualified beneficiary after a “qualifying event” occurs.   A qualifying event is a certain event that would cause an individual to lose health coverage.

Under the COBRA Continuation Health Coverage rules, qualifying events for spouses are:

  1. Voluntary or involuntary termination of the covered employee’s employment for any reason other than gross misconduct;
  2. Reduction in the hours worked by the covered employee;
  3. Covered employee’s becoming entitled to Medicare;
  4. Divorce or legal separation of the covered employee; and
  5. Death of the covered employee.

Given the fact that the loss of health coverage for this employee’s spouse was initiated by the employee’s voluntary change in spouse/dependent coverage during open enrollment, this would not be a qualifying event. However, this may be a qualifying event if one of the events above was the reason for the change in coverage.

Reference Link(s) and Resource(s):
U.S. DOL, FAQs for Employers About COBRA Continuation Health Coverage:
http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html
An Employer’s Guide to Group Health Continuation Coverage Under COBRA:
http://www.dol.gov/ebsa/publications/cobraemployer.html#WhoIsEntitledtoContinuationCoverage