Who is eligible for COBRA coverage?

Continuation coverage is available to each qualified beneficiary who would lose coverage under the plan as a result of a qualifying event. Thus, eligibility for COBRA coverage involves three components:

1. a qualified beneficiary;

2. a qualifying event; and

3. loss of coverage.

Qualified beneficiaries. COBRA coverage is available only for qualified beneficiaries. For COBRA purposes, a qualified beneficiary is generally anyone who is covered under a group health plan on the day before a qualifying event, including the spouse and dependent children of a covered employee. Domestic partners are not covered, although employers may choose to offer continuation coverage.

Covered employees.Covered employee also includes self-employed persons, agents and independent contractors, and corporate directors. A person who is merely eligible for coverage under a group health plan but has not actually been covered is not a covered employee. Other classes of employees are covered employees under COBRA by virtue of the qualifying event that gives rise to their coverage-such as laid-off or striking employees or Medicare-eligible employees.

Newborn or adopted children. Children born to or placed for adoption with a covered employee are qualified beneficiaries. Also, children born to or placed for adoption with a covered employee during the continuation period are qualified beneficiaries. COBRA participants are also allowed to change their coverage status upon the birth or adoption of a child.

Remember that the addition of newborn or adopted children creates a new group of qualified beneficiaries that will need to be tracked in the event of a secondary qualifying event. The maximum coverage period for a newborn or adopted child runs from the date of the qualifying event rather than from the date of birth or placement for adoption. Placement for adoption includes situations in which a child is adopted at birth by a covered employee without a preceding adoption placement.

Part-time employees. Part-time employees are eligible for COBRA coverage if they were covered by the group health care plan and lose coverage due to one of the qualifying events. If part-time employees' families are covered by the group health care plan and lose coverage due to a qualifying event, they may also be eligible for COBRA coverage.

Persons denied coverage. A person who is wrongfully denied group health insurance coverage in violation of an applicable law and who experiences a qualifying event is considered a qualified beneficiary.

Nonresident aliens. The term qualified beneficiary does not include an individual whose status as a covered employee is attributable to a period when he or she was a nonresident alien who received no earned US. source income from an employer. If the individual is not a qualified beneficiary as a result of this nonresident alien rule, the nonresident alien's spouse or dependent child is also not considered to be a qualified beneficiary.

Open enrollment period. Under the 1999 final regulations, if an employer makes an open enrollment period is available to non-COBRA employees (who have not experienced a qualifying event), the same open enrollment period rights must be available to each qualified beneficiary receiving COBRA continuation coverage. An open enrollment period is a period during which an employee covered under a plan can choose to add or eliminate coverage of family members or can choose to be covered under another group health plan.

In addition to open enrollment periods, if the plan provides that new family members of active employees may become covered prior to the next open enrollment period, then the same right must be extended to a new family member of a COBRA beneficiary who joins the qualified beneficiary's family on or after the date of the qualifying event.