How Does Eligibility for Medicare Impact my Eligibility for COBRA Coverage?

Monday, June 21, 2021

Eligibility for COBRA coverage may be affected if an individual is entitled to Medicare benefits.  an individual is considered to be “entitled” to Medicare upon the effective date of actual enrollment in either Part A or B. Merely being eligible to enroll in Medicare does not constitute being “entitled” to Medicare benefits. (Note that, while mere eligibility for Medicare does not service to terminate your COBRA coverage rights, it may impact your ability to qualify for ARPA Subsidized COBRA.  Please see the section of our FAQs entitled “COVID-19 National Emergency Relief” for more information).

The following situations demonstrate the interaction between Medicare entitlement and eligibility for COBRA coverage:

  1. COBRA Election Made AFTER Medicare Entitlement. When a COBRA-eligible individual elects COBRA after enrolling in Medicare Part A or B, his or her rights to COBRA coverage are not impacted.  COBRA coverage may not be terminated early by the group health plan because of prior Medicare entitlement.

Example:  Employee A is covered under MIT’s group health plan. In April of Year 1, she applies for and enrolls in Medicare Part A. On July 18 of Year 1, she retires. As a result, she loses MIT plan coverage on July 31 of Year 1. She elects COBRA, which begins on August 1 of Year 1. She is entitled to COBRA for a maximum coverage period of 18 months even though she is already entitled to Medicare

  1. COBRA Election Made PRIOR to Medicare Entitlement. When a COBRA-eligible individual elects COBRA prior to enrolling in Medicare Part A or B, his or her COBRA coverage may be terminated early by the group health plan upon subsequent enrollment in Medicare Part A or B.

Example:  Same facts as above, except Employee A does not apply for and enroll in Medicare Part A until November 1 of Year 1.  Since Medicare entitlement occurred after COBRA began, her COBRA coverage terminates effective November 1 of Year 1, due to Medicare entitlement.

  1. Application to Employee’s Covered Spouse or Other Covered Dependent. The covered spouse and other covered dependent(s) of the employee are eligible for COBRA coverage upon the employee’s loss of MIT coverage due to retirement.  The length of COBRA coverage for the covered spouse and covered dependent will vary, however, based on the timing of the employee’s Medicare entitlement (if any).  When a covered employee’s Qualifying Event (for purposes of COBRA coverage) occurs within the 18-month period following the employee’s entitlement to Medicare, the employee’s covered spouse and covered dependent(s) are entitled to COBRA coverage for a maximum period of 36 months from the date that the employee became entitled to Medicare.  If the employee retires prior to Medicare entitlement, there is no extension of COBRA coverage available to the spouse and covered dependent(s) (they will be entitled to the normal 18 months).

Example: Employee B becomes entitled to Medicare on May 1 of Year 1. Employee B retires on May 1 of Year 2. Employee B elects COBRA for himself and his wife. Employee B is entitled to up to 18 months of COBRA from the date he retired.  Since Employee B’s retirement occurred less than 18 months after his Medicare entitlement, his wife is entitled to up to 36 months of COBRA coverage from the date of Employee B’s Medicare entitlement, or until April 30, Year 4.