This is a question I hear a lot. And the answer is, “It depends.” According to COBRA law, the terminated employee has a right to coverage under COBRA as long as the termination wasn’t for “gross misconduct”. Unfortunately, the law doesn’t define “gross misconduct”. The Employee Benefits Legal Blog has a very good post on this very important topic. If you have doubts as to whether your conduct rises to “gross misconduct”, give it a read.
Either way, though, your former employer must notify you of your COBRA eligibility. If they are claiming you are not eligible due to gross misconduct, they must inform you of that as well.
If your company has more than 20 employees, they are legally obligated to offer you coverage under COBRA. The only exception, besides the aforementioned gross misconduct, is if they cancel all group coverage for their employees. So, if they cancel your particular plan, but are still offering a different plan to employees, you have a right to buy coverage under that plan. Only if they cancel all group insurance coverage do you lose your coverage under COBRA.
While employers are required to give a 30 day grace period for subsequent COBRA payments due, the 45 day deadline after election of benefits is a hard deadline. There is no grace period. So if you don’t pay your first premium, retroactive to the beginning of COBRA eligibility, within 45 days of mailing your election form, then you will lose all rights to COBRA coverage.
Employers are not required to send you notices of payments due for COBRA payments, so be sure to keep track of your due dates.
Anyone else out there have questions about COBRA coverage? Leave your questions in the comments, and I’ll try to answer them. What I don’t know, I can usually find an answer for fairly quickly.