How Does Medicare Entitlement Affect COBRA Coverage?

As employees near retirement age, we inevitably get questions about the ways in which COBRA and Medicare affect each other.  Oftentimes, this is a topic where employees are uninformed or misinformed.  Most know the two interact.  One of the six qualifying events for COBRA is entitlement to Medicare after all.   But even the most well-known interaction is often misunderstood as it is a qualifying event only for the spouse and/or dependents, and it very rarely happens since most group health plans are prohibited from making Medicare entitlement an event that leads to loss of coverage.   We wanted to review some of the frequently asked questions we receive that both employers and employees should be aware of.

The next interaction is important for employers to know.  When any qualified beneficiary (including the employee) becomes entitled to Medicare BEFORE their qualifying event they may still elect COBRA and the minimum coverage period cannot be ended early due to Medicare entitlement.  COBRA must be offered in this situation. 

One interaction we’ve experienced with participants is Medicare entitlement as a second qualifying event for the spouse and dependents.  In this situation, the employee, spouse and dependents are on COBRA due to a termination or reduction of hours, and then sometime after electing COBRA, the employee becomes eligible for Medicare.  At this point, when the employee becomes covered by Medicare, the spouse and/or dependents coverage period may be extended to 36 months.   This information can be comforting knowing that the spouse and dependents will have access to comprehensive and continued healthcare coverage for an extended period.

What other questions do you have, or have you received about the effects of Medicare entitlement on COBRA?  Contact an Ally now at, and we’d be happy to talk through it with you.