Medicare Can Affect COBRA Eligibility. Here’s How.

January 30, 2020

At some point in your life, you may become entitled to Medicare or become eligible for COBRA. While each of those events can be complex, they become even more complex when they occur at the same time. How does Medicare affect COBRA eligibility? We’ll answer four common questions you might have about how Medicare and COBRA co-exist.

COBRA eligibility and Medicare

Can I be enrolled in COBRA and Medicare simultaneously?

You can be enrolled in both COBRA and Medicare if you are entitled to Medicare before you elect COBRA. If you elect COBRA first and then become entitled to Medicare, then your medical coverage through COBRA must be terminated.

Mark Stember, who is an attorney at Kilpatrick Townsend & Stockton LLP and a longtime member of the Employers Council for Flexible Compensation’s Technical Advisory Council, said that it’s uncommon for someone to be enrolled in COBRA and Medicare at the same time.

“Typically, it’s not cost effective to do so,” Stember said. “But, from a legal standpoint, it’s legal to do so.”

Can I drop COBRA after becoming enrolled in Medicare?

You can drop COBRA at any time, whether you’re enrolled in Medicare or not. If you have COBRA through Discovery Benefits, you can do this by either submitting a Benefits Termination Form or by simply not paying your monthly premium within the payment grace period. 

Can my dependents be enrolled in COBRA even if I can’t be?

Yes. Your Medicare entitlement doesn’t affect the COBRA eligibility of any individuals who would otherwise be eligible for COBRA as a result of your loss of coverage within a group health plan.

“Each qualified beneficiary has the independent right to elect COBRA,” Stember said. “If, for example, a terminated employee is entitled to Medicare and decides to drop COBRA, his/her spouse and dependent children can stay on COBRA.”

Can my participation in my employer’s health plan be terminated because I’m entitled to Medicare?

No. If you remain an active employee after becoming entitled to Medicare, you may remain on your employer’s health plan. An employer would be in violation of the Age Discrimination in Employment Act (ADEA) for dropping someone from their group health plan at or after age 65.

 “That’s why you see individuals at age 65, 66, 67 and beyond still in the workplace who are entitled to Medicare and still maintain their health coverage,” Stember said.

Please note that Medicare entitlement is a COBRA qualifying event. However, Medicare entitlement doesn’t become a COBRA qualifying event until coverage within a group health plan is disrupted.

Would you like to learn how Medicare affects HSA eligibility? Check out this blog post. 

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