Common COBRA Compliance Question, Answered

Larry Grudzien
July 27, 2011  

 

When any qualified beneficiary (including the covered employee) first becomes entitled to Medicare after electing COBRA coverage, his or her COBRA coverage can be terminated early (i.e., before the end of the maximum coverage period). This rule does not, however, affect the COBRA rights of other qualified beneficiaries in a family unit who are not entitled to Medicare (for example, the spouse and dependent children of a Medicare-entitled former employee). 

 

 For COBRA purposes, what does “entitlement to Medicare” mean?

Under COBRA, the term “entitlement” means that an individual who is eligible for Medicare has actually become enrolled in Medicare, as provided under Treas. Reg. § 54.4980B-7, Q/A-3(b)

In other words, an individual is entitled to Medicare only if he or she may currently receive benefits. If the individual must take additional steps to enroll in Medicare before receiving benefits, then that individual is not “entitled” to Medicare for purposes of the COBRA rules until the steps have been taken and the enrollment has become effective.

A qualified beneficiary becomes entitled to Medicare benefits upon the effective date of enrollment in either part A or B, whichever occurs earlier. 


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