Loss of coverage due to move to part-time

[Guest taylorjeff]

Employee loses health coverage due to employer moving him to part-time (reduction in hours). At first glance, I would think that the new COBRA subsidy would apply. It is a termination from or "involuntary loss" of coverage. In a sense, they are being termed from full time employment with health coverage and moved to a PT job without. But, does this really meet the definition of "involuntary terminition of employment"? After reviewing the DOL website, I can find no support for this interpretation. Has anybody seen anything related to this?

Thanks!

[jpod]

No; there must be a termination of employment. However, at the webcast last week the IRS said that future guidance will probably say that if an employee quits as a result of that type of action by the employer, the quit will be viewed as an "involuntary termination." I would wait for the guidance before acting on this, however.

[401 Chaos]

See the presentation around 1 hour and 14 minutes in for the general discussion jpod references. They are pretty clear that a reduction in hours in itself is not an involuntary termination of employment (unless it goes all the way to zero hours) and thus would not itself trigger the subsidy.

[Guest taylorjeff]

Thanks to both of you for your help!

[JanetM]

Q3 under involuntary term - page 6

n_09_27.pdf