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Qualified Beneficiaries - A qualified beneficiary is an employee who was covered by a group
health plan on the day before a qualifying event occurred or that employee's spouse, former
spouse, or dependent child. In certain cases involving employer bankruptcy, a retired employee
and their spouse, former spouse, or dependent children may be qualified beneficiaries. In
addition, any child born to or placed for adoption with a covered employee during a period of
continuation coverage is automatically considered a qualified beneficiary. An employer’s
agents, independent contractors, and directors who participate in the group health plan may
also be qualified beneficiaries.
Qualifying Events - Qualifying events are events that cause an individual to lose group health
coverage. The type of qualifying event determines who the qualified beneficiaries are and the
period of time that a plan must offer continuation coverage. COBRA establishes only the
minimum requirements for continuation coverage. A plan may always choose to provide longer
periods of continuation coverage and/or contribute toward the cost.
The following are qualifying events for a covered employee if they cause the covered employee
to lose coverage:
• Termination of the covered employee’s employment for any reason other than “gross
misconduct,” or
• Reduction in the covered employee’s hours of employment
The following are q
ualifying events for a spouse and dependent child of a covered employee if
they cause the spouse or dependent child to lose coverage:
• Termination of the covered employee's employment for any reason other than “gross
misconduct,”
• Reduction in hours worked by the covered employee,
• Covered employee becomes entitled to Medicare,
• Divorce or legal separation from the covered employee, or
• Death of the covered employee.
In addition to the above, the following is a qualifying event for a dependent child of a covered
employee if it causes the child to lose coverage:
• Loss of “dependent child” status under the plan rules. Under the Affordable Care Act,
plans that offer coverage to children on their parents’ plan must make coverage
available until the child reaches the age of 26.
Q5: Under COBRA, what benefits must be covered?
The continuation coverage must be identical to the coverage currently available under the plan
to similarly situated individuals who are not receiving continuation coverage. (Generally, this is
the same coverage that the qualified beneficiary had immediately before the qualifying event.)
A qualified beneficiary receiving continuation coverage must receive the same benefits, choices,
and services that a similarly situated participant or beneficiary currently receives under the
plan, such as the right during an open enrollment season to choose among available coverage
options. The qualified beneficiary is also subject to the same plan rules and limits that would
apply to a similarly situated participant or beneficiary, such as co-payment requirements,