Category: COBRA

Special COBRA Coverage Terms for the Departing Executive: Pitfalls to Avoid

It is not uncommon for employers to provide special terms to departing executives regarding their group health coverage that they do not generally offer to rank and file employees.  Common examples include a period of remaining on active coverage status even after employment responsibilities have largely ceased (for instance during any period in which the executive receives severance compensation), or employer payment of COBRA premiums for some period of time after termination.  Generally the terms of the special coverage arrangement are set forth in a separation or severance agreement, and may vary from case to case.  Employers traditionally have exercised a significant degree of discretion in this area without a clear sense of the compliance issues that might arise.

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