COBRA rights of dependent of qualified beneficiary

[Guest Meg H]

An employee's dependent loses full-time student status and elects to continue her coverage under COBRA. While on COBRA, the dependent has a baby who is enrolled as a COBRA participant. Subsequently, the employee's dependent elects to return to school on a full-time basis and becomes eligible to be covered by the employee as an active participant. The employee wishes to add the dependent back on to her coverage and to continue COBRA coverage for the grandchild.

My understanding is that the newborn (employee's grandchild) is not a qualified beneficiary under COBRA, and that coverage is tied to the parent's status (employee's child). Does this mean that if the child is no longer a COBRA participant the grandchild loses COBRA continuation rights? Any help would be appreciated - thanks!

[KIP KRAUS]

It is my understanding that a child born to a COBRA eligible person is also a COBRA eligible person and therefore has the option to independently elect COBRA coverage on his/her behalf. I the case of the grand child, the mother should be allowed to make the election for the child. I believe Q&A 6 in Section 54.4980B-6 addresses this cituation.

[Kirk Maldonado]

Kip:

The newborn must be a child of the employee (not a grandchild of the employee). IRC § 4980B(g)(1)(A)).

[KIP KRAUS]

You are absolutely right Kirk. In fact I believe 54.4980B-7 Q&A 1 © specifically would exclude the grandchild, because the grandchild is not a qualified beneficiary just by virtue that he/she was born to a qualified beneficiary.

Thanks for clearing this up, and God bless the politicians for making COBRA and FMLA so easy to figure out.

[Kirk Maldonado]

If it wasn't for that complexity, a lot of us wouldn't have jobs.

[Guest Meg H]

Thanks so much for your responses.

[gc@chimentowebb.com]

It’s now 2018, and if any of you are around, here’s a different version of the same question. A 16 year old dependent daughter has a child out of wedlock. Still an infant.  Under state law (Massachusetts) dependent grandchildren must be covered.  The employer intends to switch to self insurance and to discontinue dependent grandchildren coverage, even in immediate post-natal stage.  I do not see any COBRA rights for or on behalf of the dependent grandchild, who now must get healthcare elsewhere.  This cutback in coverage also seems to be legal, subject to appropriate advance ERISA Notification. Anyone have a dofferent opinion?