What COBRA compliance considerations exist when an employee’s domestic partnership ends?

When eligibility for coverage is lost due to a change in relationship status, employees and employers may assume COBRA is always offered to the individual losing coverage. However, when a domestic partnership ends that is not necessarily the case.

Federal COBRA requires most employers to offer qualified beneficiaries who lose coverage as a result of a COBRA qualifying event (e.g., termination of employment, reduction of hours, divorce) the opportunity to continue health coverage for a specified time period. Unlike spouses and dependent children, domestic partners are not considered qualified beneficiaries under COBRA and therefore do not have independent election rights. In the event a domestic partnership ends, the nonemployee domestic partner does not have continuation rights under COBRA.

However, children of the domestic partnership who were considered dependents under the plan terms may have COBRA continuation rights. (Termination of a domestic partnership that causes a domestic partner's child to lose coverage under the plan is likely a qualifying event for the child, if the child will have ceased to be a dependent under the terms of the plan).

Some states have their own continuation of coverage laws (often known as “mini-COBRA”) which may apply to domestic partnerships. Employers should review state continuation laws to determine whether mandatory coverage continuation rules apply.

Additionally, employers that offer domestic partner coverage can design their health plans to provide domestic partners with COBRA-like continuation coverage. Employers interested in adding continuation coverage need to work with their insurance carrier or TPA and stop-loss provider prior to implementing continuation of coverage. Any addition to continuation coverage rights beyond what COBRA requires should be drafted in clear terms with the assistance of legal counsel.

PPI has a whitepaper that can assist you in addressing benefits issues involving domestic partners: download a copy of Domestic Partner Benefits: A Guide for Employers.