Learn how COBRA applies when an employee with a temporary disability is reclassified from full-time to part-time due to poor company performance. Understand the details of the 29-month coverage extension.
Table of Contents
Question
A company is forced to change the status of some full-time employees to part-time following poor annual performance. The company intends to change the status of the affected employees back to full-time as soon as sales allow. One affected employee is away from work at the time of the reclassification due to a temporary disability. How does COBRA coverage apply to the employee?
Answer
The employee is able to continue benefits for up to 29 months.
Explanation
The answer that the employee is able to continue benefits for up to 29 months under COBRA is correct.
When an employee experiences a qualifying event that causes them to lose health insurance coverage, such as a reduction in hours that makes them ineligible for the employer’s health plan, they are entitled to continue their health benefits through COBRA. The standard maximum COBRA coverage period is 18 months.
However, if the employee is deemed disabled by the Social Security Administration (SSA) at the time of the COBRA qualifying event or within the first 60 days of COBRA coverage, they are eligible for an 11-month extension of COBRA, allowing them to maintain coverage for up to 29 months total. The disability extension applies even if the disability is temporary.
In this scenario, the employee was away from work due to a temporary disability at the time their status was changed to part-time, triggering a loss of health coverage. Assuming the employee’s disability qualifies under SSA rules, they would be entitled to up to 29 months of COBRA continuation coverage – the standard 18 months plus the 11-month disability extension.
The company’s intent to restore the employee to full-time status when sales allow does not impact the employee’s COBRA rights. Even if the employee regains eligibility for the employer’s health plan in the future, they are still entitled to exhaust the full COBRA continuation period if they choose.
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