Can domestic partner coverage continue under COBRA?

If you

offer employees the option of healthcare coverage for domestic partners you are

not alone. More than 35% percent of US private employers including 52%

percent of Fortune 500 companies allow their workers to choose healthcare

benefits that cover domestic partners.

While plans

have increasingly included domestic partner eligibility there is no federal

requirement to offer continuation of benefits when coverage ends. COBRA

legislation mandates that employers offer plan options to covered employees,

their spouses and covered dependent children when a qualifying event occurs.

Qualifying events include termination of employment, loss coverage due to a

change in status, death of the employee and divorce.

Employers

may choose to offer the option of continuing domestic partner benefits. Check

with the benefits provider before you do, they don’t have to extend coverage

that is not required by COBRA. As with any other benefit decision it’s

important to be consistent. Don’t decide to extend the option to one laid off

manager and not another.

Domestic

partners are not eligible for the 65% federal subsidy included as part of this

year’s economic stimulus package. The ARRA subsidy is only available to federally

eligible COBRA participants, former employees their spouse and dependent

children. So if you offer continuation of domestic partner benefits you will

have to figure out an entirely different premium rate, or multiple rates based

upon the choices made by the terminated or laid off employee.

Add this complication to the list of reasons to outsource COBRA administration!