Q- We are an employer located in Pennsylvania. Our employee is covered under a Pennsylvania-specific HMO, but the employee is terminating employment and moving to California. The termination is a COBRA qualifying event. Do we have to offer the individual a COBRA election since his coverage will no longer be useful for him?
A- Yes. The individual has to be offered coverage under the plan in which he was covered on the day before the qualifying event. This rule applies even if the coverage is no longer useful to him. If the employer has another plan that would be of value to the qualified beneficiary, that other option must also be made available, upon the qualified beneficiary's request, if the employer would not incur "extraordinary costs" in extending the other coverage.