Q.- We have a group that is comprised of 6 divisions. Two of those divisions are breaking off and forming their own entity. They will be offering coverage to their employees separately. The parent company is terming them from benefits as they are technically no longer employees of that parent company. Is this a COBRA event even though they will be getting coverage through the new entity?
A.- Yes. There is a loss of coverage in connection with a termination of employment. A COBRA election should be offered.