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COBRA to New Hire Enrollment Question

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Mark asked 11 months ago
I have a new employee who under the terms of their previous employers severance package is being fully reimbursed for their Cobra medical benefits costs through 4/29/2022. Employee has been on this Cobra plan since 1/29/2021 and remains currently on the same plan.

Now, we have hired this employee effective 1/3/22 and he would like to defer enrollment in our company medical benefits (hence, so he won’t have any payroll deduction for the coverage) as he would like the new medical benefits to take effect 5/1.

Is this possible to do?

Is his election to discontinue his Cobra coverage at the end of April 2022 suffice as a “life event” making him eligible to enroll in the new company medical benefits in May 2022? Again, his election to discontinue Cobra coverage is only due to him losing the reimbursement from his previous employer. So, his Cobra benefits didn’t run out, he just wants to make the switch from one plan to the other for economic reasons.

Thanks for your input.

2 Answers
Jean replied 11 months ago
Hi Mark!

I want to start out by saying that Workest and Zenefits employees do not provide legal advice. While we strive to provide useful general information applicable to the majority of our community, we do not — and cannot — provide legal advice specific to your company and your situation. If you have specific legal questions or concerns, we encourage you to discuss them with your legal advisor.

Regarding your question about COBRA, here are some resources that may help:

https://www.benstrat.com/downloads/COBRA_FAQ-Employer.pdf

https://frostbrowntodd.com/cobra-subsidy-effects-on-severance-programs-and-employee-separations/

https://www.jdsupra.com/legalnews/employers-may-need-to-update-their-1884043/

Nadene Evans replied 10 months ago
looks amazing

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