Q.- We have an employee who expects to be divorced soon, but not until after the new year. Our open enrollment is happening now and new coverage starts January 1. Our employee wants to drop his spouse from coverage for the next plan year. Are we allowed to let him do this and if he does, do we have to offer the spouse COBRA coverage?
A.- Voluntarily dropping a dependent from coverage is not a COBRA qualifying event for that dependent but losing coverage due to divorce is a qualifying event. It seems like your employee is not enrolling his spouse in coverage for the upcoming plan year in anticipation of getting divorced.
An offer of COBRA coverage would not have to be made when the spouse is dropped from coverage at open enrollment. However, the COBRA “anticipation of divorce” rule requires that COBRA coverage be made available to an ex-spouse not covered under the plan following a divorce if the spouse was dropped from coverage “in anticipation” of the divorce. Your employee may certainly drop his spouse from coverage at open enrollment but be aware that the spouse may be entitled to COBRA continuation coverage when the divorce is finalized. You should advise your employee of this and have him notify you upon the divorce so you can send the COBRA notice.
