Employee Can’t Claim COBRA if Not Enrolled in Plan

Q. We offer insurance benefits that begin six months after hire. Due to changing business conditions, we had to terminate an employee after only 10 months on the job. But the worker wasn’t signed up for the health plan on his termination date. Does he now have any claim to COBRA? —M.R., South Carolina

A. Probably not. As a general rule, only employees, their spouses and dependent children who are covered by a group health plan on the day before a COBRA qualifying event (such as a termination or reduction in hours) are entitled to COBRA coverage. Because your employee was never covered by the plan, he’s likely not entitled to COBRA coverage.

Key point: This doesn’t mean you’re 100 percent in the clear. If the employee wasn’t enrolled because your company neglected to sign him up in time, you’d be wise to offer COBRA coverage. But if he simply chose not to enroll after the six-month waiting period, you don’t have to offer COBRA.