Legal Definitions - qualifying event

A qualifying event is a specific life change or circumstance that, under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), allows an individual to temporarily continue their health insurance coverage even after they would normally lose it.

COBRA is a federal law that provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. A qualifying event is the trigger that initiates this right. Without COBRA, these events would typically result in an immediate loss of health benefits for the covered individual or their dependents under an employer-sponsored plan.

Here are some examples of qualifying events:

• A dependent child reaching the maximum age for coverage: Many employer health plans cover children up to a certain age, often 26. When a child turns this age, they typically "age out" of their parent's plan.

  Illustration: Sarah's son, Michael, turns 26 and is automatically removed from her employer's health insurance plan. This age-out is a qualifying event, allowing Michael to elect COBRA coverage to continue his health benefits for a limited period while he seeks his own plan or employment with benefits.

• An employer discontinuing its group health plan entirely: Sometimes, a company decides to stop offering health insurance benefits to all its employees, perhaps due to financial restructuring or a change in business strategy, even if the company itself continues to operate.

  Illustration: Tech Solutions Inc. announces that, effective next quarter, it will no longer offer a group health insurance plan to any of its employees. For all employees and their covered dependents, this cessation of the company's health plan is a qualifying event, giving them the option to elect COBRA to maintain their health coverage temporarily.

• A dependent child being adopted or placed for adoption: The adoption of a child can be a qualifying event for the child to gain COBRA rights if they lose other coverage or need to continue existing coverage.

  Illustration: After a successful adoption, a child is covered under their adoptive parents' employer-sponsored health plan. If the adoptive parents later experience a qualifying event (like job loss), the adopted child's right to COBRA coverage is also triggered. Conversely, if a child is placed for adoption and loses coverage from their birth parents' plan, that placement can be a qualifying event for the child to elect COBRA.