Early termination of COBRA: When, why, and how?

COBRA coverage can terminate early in situations where a qualified beneficiary enrolled in COBRA obtains other group coverage after electing COBRA. This typically occurs when an employee secures coverage with a new employer or when a spouse gains coverage through their employer.

There is a rule permitting early termination of COBRA if the individual enrolls in other group health plan coverage. However, this cannot include exchange plans or individual coverage; it must be group coverage.

Employers looking to enforce this rule must establish procedures, primarily with COBRA notifications, to inform individuals to notify the plan upon enrollment in other group coverage. Upon notification, employers can terminate COBRA early but must send an early termination COBRA notification to the individual affected. This includes both the enrolled spouse and the spouse taking their partner's employer coverage.

Check out the video for more details.