Separate COBRA Elections

[DTH]

The plan allows married employees to choose a single rate or a family rate. The plan does not allow the employee to elect a single rate and the spouse to elect a single rate (not plan does that I know of). A married participant terminates and has no children. Each qualifying beneficiary has the right to make a separate COBRA election. Can the former employee choose single COBRA coverage and the spouse elect single COBRA coverage (i.e., two single coverages).

I looked at 4980B(f)(2)(A) and 4980B(f)(5)(B), and my answer would be no. The COBRA coverage must be the same as what was offered before the qualifying event (i.e., single for employee only or family rate). If there is one person requesting COBRA, the qualifying beneficiary may elect the single rate (i.e., if the former employee did not elect COBRA the spouse may spouse choose single COBRA coverage). If both the former employee and spouse elects COBRA it must be the family rate.

Please let me know your experience on this issue. If the former employee and spouse can both choose single coverage (two single coverages), can you please provide me with the basis with that conclusion (e.g., reg. code site, etc.)

Thanks!

[Guest OSU]

All qualified beneficiaries (QB's) have the right to elect single coverage. So, you could have a husband and wife each elect single coverage. When you say "The COBRA coverage must be the same as what was offered before the qualifying event", this means that if you have more than one plan option (ie: PPO and HMO), the QB's have to stay in their current plan option.

[Kirk Maldonado]

I seem to recall that there was a revenue ruling involving a related (but not identical) issue a few years ago. That ruling might provide some guidance. Sorry, but I don't have the cite handy.

[Guest Barbara Labinski]

Qualified beneficiaries do have separate election rights, however if there are 2 or more beneficiaries currently on the contract and they are both or all accepting COBRA they must continue as a family contract. The former employee could decline coverage for himself/herself and that would allow spouse or children an independent election. This is cited in the IRS Revenue ruling 96-8 (Jan 22 1996).