How does an individual qualify for the 11-month extension under COBRA for a total of 29 months maximum coverage period?

There are three conditions that must be satisfied for an individual to qualify for the 11-month COBRA coverage extension for a total maximum coverage period of 29 months.

The first condition is that the qualified beneficiary’s (QB’s) initial COBRA triggering event must be the employee’s termination of employment or reduction of hours.

The second condition is that the Social Security Administration must determine that the QB is disabled during the first 60 days of COBRA coverage. The QB can be the employee, spouse or child. The QB’s disability determination may have occurred before the COBRA effective date.

The third condition is that the QB or the employee must notify the plan administrator in a timely manner of their disability determination. They must do so within 60 days of any one or more of the following, whichever is later:

• The date of the disability determination.
• The COBRA triggering event date.
• The date that the QB lost coverage under the group plan due to the triggering event.
• The date in which the employee was notified of their obligation to provide notice either through a COBRA Initial Notice or SPD- whichever date is later. Note that the COBRA Initial Notice and SPD should have been provided to the employee when they were initially enrolled in coverage under the employer's plan. The COBRA Initial Notice must also be provided to covered spouses upon enrollment. This is one reason why the COBRA Initial Notice is so important.

Keep in mind, though, that the third condition is currently impacted by the extension of certain time frames relief that was provided due to the COVID-19 pandemic. Specifically, recent IRS guidance on the ARPA COBRA premium assistance clarifies that individuals who received a disability determination from March 2020 through now (and ongoing) will be entitled to a year and 60 days to notify the employer of their disability determination.

If all of these conditions are met, the maximum coverage period extends to 29 months. The extension applies to all QB family members. The employer may charge up to 150% of the premium or premium equivalent during the 11-month extension as opposed to the normal 102%.

The ARPA does not extend a QB’s maximum coverage period, but does provide a subsidy for the premiums if they lost coverage due to reduction of hours or involuntary termination of employment. You can find more information about this in our article in the May 27, 2021, edition of Compliance Corner.