To be eligible for COBRA continuation coverage, a qualified beneficiary must be enrolled in the employer’s group health plan on the day before the qualifying event takes place. Simply stated, if a person is not enrolled in a plan, there is no coverage to lose. But once a person is a qualified beneficiary, he or she may be able to enroll previously non-covered individuals. A “qualified beneficiary” can be one of the following:
- A “covered employee” defined as a current or former employee (including self-employed& persons, independent contractors and other nontraditional employees) covered under a group health plan
- The spouse of a covered employee
- The dependent child of a covered employee
Two groups of people who can never be qualified beneficiaries are (1) non-resident aliens with no U.S. source of income and (2) individuals who are not otherwise qualified beneficiaries who become covered under a group health plan because of another qualified beneficiary’s election. Any relative of these non-resident aliens also is not a qualified beneficiary solely because of the relationship to the non-resident alien.