Can COBRA qualified beneficiaries change coverage during open enrollment?

Yes. At the beginning of a COBRA continuation period, employers must offer qualified beneficiaries the opportunity to continue the same coverage in place on the day before the qualifying event. Following the initial COBRA election, when an open enrollment period is available for similarly situated employees under the plan, or when a qualified beneficiary experiences a HIPAA special enrollment event, the qualified beneficiary may make coverage changes. This means that qualified beneficiaries can enroll dependents because of marriage, birth, adoption, or loss of other health plan coverage. HIPAA special enrollment rights only arise for qualified beneficiaries receiving COBRA coverage, not for former qualified beneficiaries who failed to timely elect coverage following a qualifying event.

Generally, any family members added during open enrollment or HIPAA special enrollment do not become independent qualified beneficiaries. The one exception to this rule is children born to or placed for adoption with the covered employee during a period of COBRA continuation coverage. Those children are considered independent qualified beneficiaries, but the maximum duration of their COBRA continuation coverage is tied to their parent’s initial qualifying event (not the birthdate or adoption date).

During open enrollment, qualified beneficiaries must be able to drop or add family members and change coverage elections, just as if they were a non-COBRA enrolled employee. Each qualified beneficiary has independent open enrollment rights to change benefit coverage options as if each qualified beneficiary were an active employee. Importantly, plan administrators must notify COBRA qualified beneficiaries of any coverage changes ahead of open enrollment.

All coverage options available to similarly situated active employees during open enrollment must also be made available to qualified beneficiaries, including any coverage modifications. This means that qualified beneficiaries must be allowed to switch elections between plans of different types (e.g., add medical, even if only enrolled in dental as of the qualifying event) during open enrollment, assuming active employees are given that choice.

Example: A qualified beneficiary (QB) was a participant in her employer’s group dental plan when she terminated employment, but not the group medical plan. QB experienced a COBRA qualifying event following her employment termination and elected to continue her dental coverage under COBRA. Three months later, the employer held an open enrollment period for active employees. During open enrollment, active employees enrolled only in group dental coverage can enroll in group medical coverage. Can QB enroll in the employer’s group medical plan during open enrollment?

Yes. The COBRA regulations require employers to offer COBRA qualified beneficiaries the same open enrollment period rights available to similarly situated active employees. Therefore, QB can elect group medical coverage during open enrollment.