Answer: Taking FMLA leave, in itself, does not constitute a qualifying event under COBRA. However, a qualifying event does occur if:
- The employee is covered under the employer's group health plan on the day before the first day of the FMLA leave (or becomes covered during the leave);
- The employee does not return to work at the end of the FMLA leave; and
- The employee would lose coverage under the group health plan without the COBRA continuation coverage.
The maximum coverage period under COBRA (generally 18 months) is measured from the date of the qualifying event—which is the last day of FMLA leave. Because your employee loses coverage under the company's group health plan, she experiences a qualifying event on November 5, 1999. The maximum coverage period is measured from that date.
This is the case, even if for all or part of her FMLA leave, the employee fails to pay the "employee portion" of premiums for company group health plan coverage. Furthermore, if the company pays premiums for the employee’s coverage during her FMLA leave, it may not condition her COBRA coverage on the reimbursement of those premiums.
COBRA is not triggered, however, if on or before the last day of the employee's FMLA leave, the company discontinues its health coverage for the class of employees with whom the employee is similarly situated.
Cite: Proposed Reg. §54.4980B-10 and IRS Notice 94-103.
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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.