6 Reasons Why Your Employer Denied Your COBRA Insurance Coverage

Man explaining insurance coverage to a woman

The Consolidated Omnibus Budget Reconciliation Act (COBRA) generally requires employers to allow terminated or laid-off employees to continue taking advantage of health benefits after termination at their own expense. However, there are instances when an employer might deny COBRA insurance coverage eligibility. Sometimes these reasons are legal, and sometimes not. You need to coordinate with a COBRA attorney who knows employment law if you believe you were denied coverage for an illegal or improper reason.

In the meantime, it helps to familiarize yourself with some of the more common reasons COBRA may be denied. They include:

Being Terminated for Gross Misconduct

Being Terminated for Gross Misconduct

Under COBRA, employers can legally deny coverage if an employee was fired for “gross misconduct.”

You might wonder what the legal definition of “gross misconduct”is.. The COBRA statute doesn’t actually provide a clear definition. However, another Federal agency, the Office of Personnel Management (OPM) does :

“[A] flagrant and extreme transgression of law or established rule of action for which you are separated from service and for which a judicial or administrative finding of gross misconduct has been made.”

This does not mean you are not entitled to receive a COBRA notice from simply because your former employer arbitrarily decided you were terminated for gross misconduct. If you believe the reason for your termination does not qualify as gross misconduct, despite your employer characterizing it as such, you may be able to fight the decision. When establishing whether or not an employee was terminated for gross misconduct, the burden of proof is on the employer, not the employee.

Be sure to work with a COBRA attorney if you decide to fight your employer on this issue. Because the definition of gross misconduct is not entirely clear under COBRA, you need help from an attorney who understands the topic thoroughly.

cobra insurance health care rights

Not Originally Being Enrolled in Employer’s Health Plan

COBRA insurance essentially allows terminated employees to continue receiving coverage from their employer’s health plan despite no longer working for the organization. However, employees not enrolled in their employer’s plan when fired are not eligible for COBRA coverage. This is another instance in which an employer can legally deny coverage. If you were not enrolled in their plan on the date you were terminated, there is typically little you can do to fight this.

It is also worth noting that sometimes employers stop offering health coverage to their workers. When this happens, COBRA coverage may end as well. Even if you weren’t initially denied coverage, if none of the organization’s current employees receive health benefits any longer, neither will you.

The Company Has Fewer Than 20 Employees

Employers may also deny COBRA coverage if the company has fewer than 20 employees. That said, it is essential to understand that in Florida, you may still be eligible for a continuation of your health benefits due to the Florida Health Insurance Coverage Continuation Act. Unlike COBRA, which outlines federal requirements, this state law, sometimes referred to as a “mini-COBRA” law, does apply to companies that, due to their size, are not bound by the COBRA requirement.

The Company Has Fewer Than 20 Employees

Thus, you may want to coordinate with a Florida employment law attorney if you suspect you have been denied coverage in which you are entitled to under state law. They will help you better understand whether you have a strong case.

The Company Goes Bankrupt

Declaring bankruptcy often gives companies the right to reject certain contracts they otherwise would have been required to honor. Meaning, a company can deny (or stop providing) COBRA insurance coverage if it goes bankrupt.

Florida Healthcare COBRA Insurance

You Move Out of State

To be eligible for COBRA coverage, you need to reside in a state where your employer’s health insurer conducts business. If you move to a state where it does not, the insurer cannot provide you with coverage, even if you previously received it as an employee.

You Missed the Deadline

To qualify for federal COBRA, employees must elect to receive COBRA benefits within 60 days of the day when they were terminated. In instances where state COBRA applies, the deadline will be listed on the relevant COBRA notice.

It is important to act fast if you want to receive COBRA insurance. Your employer can legally deny continuation of coverage if you miss the deadline. That said, it is possible an employer might try to claim you missed the deadline when you, in fact, did not. Although you should not expect an employer to try this, it is a possibility. Contact an attorney if you suspect this has occurred.

You Missed the Deadline

That is the most important point to remember. While these examples illustrate a few reasons an employer may deny coverage, they don’t cover every single excuse an employer might use.

Knowing whether your rights have been denied when an employer refuses to provide COBRA insurance is difficult. A Florida COBRA attorney can help you better understand the issue. If it is determined that you were unfairly denied coverage, they will also help you pursue what you’re owed.

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