If I retire will my spouse, who is under age 65 and my dependents that are on my Group Health Plan, be offered COBRA? And if so for how long?

If the employer you work for has over 20 employees and is required to offer COBRA then Yes, they must be offered a minimum of 18 months of COBRA. However, there is a possibility that they could be offered up to 36 months of COBRA. Although, I did hear at a DOL meeting last summer that a group health plan can exclude this option if they write it into their plan documents (SPDs). The rules to take advantage of this extended time on COBRA are complicated but something worth knowing so keep reading.

Whether a spouse or dependent are offered 18 months or up to 36 months of COBRA depends on several things:

  1. Were you (as the employee) entitled for Medicare before you retired?

    • Were you entitled for Medicare up to 18 months before you left your job? According to the DOL publication AN EMPLOYER’S GUIDE TO GROUP HEALTH CONTINUATION COVERAGE UNDER COBRA (Found online at dol.gov HERE on page 9), “When the qualifying event is the end of employment or reduction of the employee’s hours, and the employee became entitled to Medicare less than 18 months before the qualifying event, COBRA coverage for the employee’s spouse and dependents must be available for up to 36 months after the date the employee becomes entitled to Medicare. For example, if a covered employee becomes entitled to Medicare 8 months before the date their employment ends (termination of employment is the COBRA qualifying event), COBRA coverage for their spouse and children must be available for up to 28 months (36 months minus 8 months)”.
    • In other words, did you become entitled for Medicare by turning 65 years old within 18 months, or less, from the time you are leaving your job? And you left your job before you signed up for Medicare part B meaning that the termination of your employment is the COBRA qualifying event and not signing up for Medicare part B. In that case, then count up those months and as long as you became entitled less than 18 months before you left your job then that many months could be added to the original 18 months your spouse/dependents would normally be given under gaining COBRA due to the employee leaving their job.

 

  1. Did you leave your job and then become entitled to Medicare within 18 months of the start of your COBRA?

    • According to that same DOL publication AN EMPLOYER’S GUIDE TO GROUP HEALTH CONTINUATION COVERAGE UNDER COBRA (Found online at dol.gov HERE on page 10), a Second Qualifying Event may give an extension of up to 18 month. “An 18-month extension may be available to a qualified beneficiary while receiving an 18-month maximum period of continuation coverage (giving a total maximum period of 36 months of continuation coverage) if the qualified beneficiary experiences a second qualifying event, for example, death of a covered employee, divorce or legal separation of the covered employee and spouse, Medicare entitlement (in certain circumstances), or loss of dependent child status under the plan. The second event can be a second qualifying event only if it would have caused the qualified beneficiary to lose coverage under the plan in the absence of the first qualifying event”.

If you are dealing with a situation like this please give us a call or send us an email! We would be happy to help you make sure you get everything correct!

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