While minimum coverage periods are set by COBRA statute, employers are permitted to terminate a participant’s coverage before the expiration of an applicable 18-, 29- or 36-month period upon the occurrence of certain specified events.

• Termination of all group health plans. COBRA coverage may be terminated if an employer ceases to maintain any group health plan, including any successor plans. However, if the employer continues to maintain at least one other health plan for similarly situated employees, the employer must allow the participant to continue his or her coverage under one of those health plans.
   
• Failure to pay premiums. When a participant fails to make a timely payment of any required COBRA premium, the employer may terminate the COBRA coverage. Employers must provide participants with at least a 30-day grace period for payment of any late premiums before terminating the coverage.
   
• Coverage under another plan. Coverage may be terminated when a qualified participant becomes covered under any other group health plan, provided the alternate plan contains no limitations for coverage of any “pre-existing conditions.”
   
• Loss of Social Security Disability Status. Participants who are granted the 11-month extension for disability and who are no longer determined to be disabled by the Social Security Administration may have their coverage terminated as of the month that begins more than 30 days after such determination has been made.
   
• Entitlement to Medicare. In general, continuation coverage may be terminated on the date a qualified participant becomes entitled to (not just eligible for) Medicare benefits. However, employers should note that a participant generally becomes eligible for Medicare at age 65 but may become entitled to Medicare only after enrolling in the program.

While COBRA permits early termination of coverage for these events, it is important to remember that it does not mandate termination.

Please Note: This material is provided as general information and is not a substitute for legal or other professional advice. Contact the Knowledge Center for more information.
 

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