An employee’s divorce decree stated that they must cover the ex-spouse and child on the health insurance until the child graduates. The child graduates this month, so the ex-spouse reached out to the employer and submitted a signed cancellation form requesting that the coverage end for both her and the child. Does the employer need to offer COBRA in this situation?
COBRA must be offered when there is a triggering event that causes a loss of plan coverage within the maximum COBRA coverage period.
Divorce is a triggering event for the ex-spouse because an ex-spouse cannot stay covered under the former spouse’s employer’s health plan following a divorce. The employer must offer COBRA coverage after being notified by the employee or ex-spouse. If the divorce occurred more than 36 months ago, the employer is not required to offer COBRA coverage to the ex-spouse because she is outside the maximum COBRA period. If the divorce was more recent, the employer must offer COBRA coverage for the remainder of the 36 month period.
For the child, the divorce was not a triggering event because the child did not lose plan coverage as a result of the divorce. However, if this is within 36 months of the divorce, the divorce could still be a triggering event and the employer is required to offer COBRA. Alternatively, a dependent child losing coverage because the child ceases to be dependent under the plan is also a triggering event. This typically happens when a dependent child loses coverage at age 26. If the child in this case is still eligible for coverage under the plan, the employer is not required to offer COBRA coverage.