COBRA while on FMLA

Coordination issues involving COBRA and the Family and Medical Leave Act (FMLA) arise when determining whether a COBRA qualifying event has occurred. An employer’s obligation under COBRA to provide continued health coverage to a covered employee (or the spouse or employee’s covered dependent child) who does not return to work after a leave taken under the FMLA begins on the last day of FMLA leave.

Qualifying event. The taking of FMLA leave does not constitute a qualifying event that will trigger an employer’s obligations under COBRA. However, a qualifying event does occur if:

1. An employee (or the spouse or the employee’s dependent child) is covered under the employer’s group health plan on the day before the first day of FMLA leave (or becomes covered during the leave);
2. The employee does not return to work at the end of the FMLA leave; and
3. The employee (or the spouse or the employee’s dependent child) would lose coverage under the group health plan without the COBRA continuation coverage.
   Maximum coverage period. The maximum coverage period under COBRA (generally 18 months) is measured from the date of the qualifying event — the last day of FMLA leave. In most cases, a qualifying event occurs when an employee on leave chooses not to return to work, usually the last day of FMLA leave. Note that the qualifying event triggers COBRA coverage even if, for part or all of the FMLA leave, the employee has failed to pay the employee’s portion of health care premiums ( 15).
   

Furthermore, if the employer has paid premiums for coverage during FMLA leave, the employer may not condition COBRA continuation coverage on the reimbursement of those premiums ( 20). However, COBRA coverage is not triggered if, on or before the last day of the employee’s FMLA leave, the employer discontinues health coverage for a class of employees with whom the employee is similarly situated.

State family leave rules. Any state or local law that requires coverage under a group health plan to be maintained during a leave of absence for a period longer than that required under the FMLA ( e.g., for 16 weeks of leave rather than for the 12 weeks required under the FMLA) is disregarded for purposes of determining when a qualifying event occurs under COBRA ( 25).

COBRA notice requirement. If an employee experiences a qualifying event (that satisfies the conditions described above), then the employer generally must notify the plan administrator of the qualifying event within 30 days of the last day of FMLA leave ( 30).