Continuation of COBRA past maximum

Health plans and COBRA are not my area of experience. A question has arisen regarding the continuation of COBRA.

Can an employer elect can to extend the COBRA coverage past the maximum length of time for certain terminated employees/dependents?

Found this on the DOL website. It appears it can be but.....

Q11: How long does COBRA coverage last?

COBRA requires that continuation coverage extend from the date of the qualifying event for a limited period of 18 or 36 months. The length of time depends on the type of qualifying event that gave rise to the COBRA rights. A plan, however, may provide longer periods of coverage beyond the maximum period required by law.

When the qualifying event is the covered employee's termination of employment or reduction in hours of employment, qualified beneficiaries are entitled to 18 months of continuation coverage.

When the qualifying event is the end of employment or reduction of the employee's hours, and the employee became entitled to Medicare less than 18 months before the qualifying event, COBRA coverage for the employee's spouse and dependents can last until 36 months after the date the employee becomes entitled to Medicare. For example, if a covered employee becomes entitled to Medicare 8 months before the date his/her employment ends (termination of employment is the COBRA qualifying
event), COBRA coverage for his/her spouse and children would last 28 months (36 months minus 8 months).

For more information on how entitlement to Medicare impacts the length of COBRA coverage, contact the Department of Labor's Employee Benefits Security Administration at askebsa.dol.gov or by calling 1-866-444-3272.

For other qualifying events, qualified beneficiaries must be provided 36 months of continuation coverage.

Appreciate any information.  Thank you!

Even if ERISA’s title I does not preclude an appropriately documented health plan from providing more continuation coverage than applicable law requires, an employer, with its lawyers’ help, might consider:

Will the extended coverage meet Federal, State, and local laws about civil-rights nondiscrimination?

Will the extended coverage meet whichever tax law nondiscrimination rules apply?

What Federal, State, and local income tax treatments apply to the extended coverage?

Will the employer’s extended coverage be not covered by a group health insurance contract (if the plan has any)?

Will the employer’s extended coverage be not covered by a stop-loss insurance contract?

What might happen when a continuee fails to pay a continuation premium?

Beyond those points, has the employer evaluated the financial and other risks of making continuation coverage more attractive?

In theory it can be done, but in reality it generally does not occur for a number of practical reasons:

• If fully insured, the insurance carrier won't allow it.
• If self-insured, they likely have stop-loss that won't allow it.
• ERISA requires the plan be administered pursuant to its written terms.  An employer using its ability to interpret plan terms to allow an individual to continue coverage beyond the plan's standard COBRA terms would create a plan precedent that must be applied to other similarly situated individuals.
• COBRA has inherent adverse selection issues.  Even if the employer could get through all those issues (very unlikely), it would simply be quite expensive to expand beyond the required timeframes.

These are generally the same reason employers do not allow extensions on election/payment deadlines.

• More details: https://www.newfront.com/blog/addressing-employee-health-plan-exception-requests-part-x

Slide summary:

2024 Newfront COBRA for Employers Guide

Brian is correct.  I work on the carrier side, highly unlikely any fully insured carrier will allow it, and same for any self-funded group.  

Is an employer's offer of beyond-COBRA continuation coverage merely not covered by stop-loss insurance?

Or is an employer's offer of beyond-COBRA continuation coverage a failure of a condition that voids the whole stop-loss insurance contract?

1 hour ago, Peter Gulia said:

Is an employer's offer of beyond-COBRA continuation coverage merely not covered by stop-loss insurance?

Or is an employer's offer of beyond-COBRA continuation coverage a failure of a condition that voids the whole stop-loss insurance contract?

I am in my 42nd year and have never seen a fully insured or stop-loss carrier approve an extension of COBRA.  Not saying that they have not, just never seen it before.  The risk is not worth it to the carrier.

Thank you for all the information!  Very helpful!