Events that Trigger COBRA
Employers that are subject to COBRA are required to offer continuation of coverage to qualified beneficiaries when there is a COBRA qualifying event. The regulation states that a COBRA qualifying event is an event that is listed in the statute, causes the covered employee, spouse or dependent to lose coverage within the maximum coverage period and occurs while the plan is subject to COBRA.
Seven events meet the requirements of a COBRA qualifying event if they result in a loss of coverage:
- Voluntary or involuntary termination of the covered employee's employment (unless due to gross misconduct)
- Reduction of hours of the covered employee's employment
- Divorce or legal separation of the covered employee from the employee's spouse
- Death of the covered employee
- A dependent child ceases to be a dependent under the generally applicable requirements of the plan
- A covered employee becomes entitled to benefits under Medicare
- A bankruptcy of the employer
If the event does not cause loss of coverage, then there is no qualifying event and continuation of coverage does not need to be offered.