Q. Are all employers subject to COBRA required to provide an election notice to qualified beneficiaries that experience a qualifying event?
In a hypothetical scenario, an employee is employed by a large business, Company A, is covered under their health plan, and leaves employment. Company A sends the employee a COBRA election notice.
The employee then takes a job at another large business, Company B, and is enrolled in the company’s health insurance. The employee is later terminated from Company B after a probation period for failing to satisfy the requirements of employment. Because the employee was on the health plan the day before the qualifying event that causes the loss of coverage, Company B sends a COBRA election notice.
In this situation, can the employee choose which employer’s COBRA plan to elect, as he is still within the election periods for both employer plans? Is there a requirement to choose the most recent employer’s plan?
A. Yes, any employee who experiences a qualifying event with an employer subject to COBRA, must receive a COBRA election form. There is no requirement for an employee to elect coverage under the most recent employer’s plan provided the election under the former employer’s plan is still timely. COBRA coverage can terminate early if a former employee enrolls in another employer’s plan, but that doesn’t apply here because the employee did not elect COBRA when they enrolled on the latter employer’s plan. Enrollment in another plan terminates COBRA early only if enrollment occurs AFTER electing COBRA.
Answers to the Question of the Week are provided by Kutak Rock LLP. Kutak Rock provides general compliance guidance through the UBA Compliance Help Desk, which does not constitute legal advice or create an attorney-client relationship. Please consult your legal advisor for specific legal advice.