Q: An employee is going to drop her spouse from coverage at open enrollment. We know they are in the process of getting a divorce. The spouse contacted us and demands to be kept on the health plan. Do we have to cover him? Do we have to offer him COBRA when he loses coverage at OE?
A: An employer is not required to reinstate a spouse who was removed from coverage by an employee during open enrollment even if the divorce is not yet final. If, however, there is a court order requiring that the spouse be provided with health coverage, the situation may be different and should be reviewed with legal counsel.
Under federal COBRA rules, a loss of coverage by itself is generally not a qualifying event that requires a COBRA election to be offered unless the loss of coverage is connected to one of the defined triggering events, such as divorce or legal separation. When an employee removes a spouse during open enrollment, even in anticipation of a divorce, that alone typically does not create a right to elect COBRA continuation coverage.
There is an exception in the COBRA regulations called the “anticipation-of-divorce” rule. If it can be shown that the employee dropped the spouse in anticipation of a divorce, and the divorce later becomes final, at the time of the divorce the spouse could be entitled to elect COBRA coverage. This right only applies once the divorce is finalized and only if the removal from coverage was tied to an anticipated divorce.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.