Massachusetts Health & Accident Insurance Practice Exam

What is one condition that allows continuation of group coverage under COBRA?

1. Termination of employment for misconduct

2. Employee's refusal to participate in health plans

3. Employer's closure of business

4. Employee's voluntary resignation

The correct answer is: Termination of employment for misconduct

Continuation of group coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees and their families to maintain their health insurance benefits in certain circumstances after a qualifying event. One primary condition for this continuation is job loss, which can occur due to several reasons, but not all separations from employment qualify for COBRA. In the case of termination of employment for misconduct, typically, COBRA coverage is not extended if the employee is fired for gross misconduct. However, if an employee has been terminated for reasons that do not fall under misconduct (such as layoffs or reductions in workforce), COBRA would apply, allowing the employee and their dependents to continue their health coverage for a specific period, generally up to 18 months. The options involving refusal to participate in health plans and voluntary resignation generally do not qualify for continuing coverage. Refusal stops the participation in the first place, and voluntary resignation entitles coverage under COBRA in only some circumstances depending on the situation. An employer's closure does provide grounds for a qualifying event, but that is distinct from misconduct-related terminations. To summarize, the condition of termination of employment not tied to misconduct can potentially allow for COBRA continuation coverage, making this aspect critical in understanding the application of