What is the interaction between FMLA and COBRA?

COBRA coverage is often triggered when an employee fails to return to work at the end of an FMLA leave, resulting in the loss of group health coverage. In these circumstances, the COBRA qualifying event occurs on the last day of the FMLA leave period. If the employee on FMLA leave notifies the employer prior to the expiration of the 12-week FMLA period that he or she will not be returning to work, the group health coverage ends and the COBRA qualifying event occurs on the date of that notification.

If an employer's health plan voluntarily extends coverage beyond the COBRA qualifying event dates, COBRA coverage does not begin until group health coverage is actually lost. If an employer eliminates group health coverage for all similarly situated active employees on or before the end of an employee's FMLA leave, no COBRA qualifying event can occur.

An employee may have a COBRA qualifying event, such as a reduction in hours, that results in the loss of group health coverage and enrollment in COBRA before the employee takes FMLA leave. In this case, COBRA coverage will continue during FMLA leave unless the employee fails to pay the required premiums or exhausts the coverage altogether. When COBRA coverage ends, an employer is not obligated to offer group health coverage until the employee meets the plan's eligibility requirements again; for example, by returning to a full-time position.

The Internal Revenue Service (IRS) Q&A's on the interaction of FMLA and COBRA are found in the regulations.

Some states and local governments have laws that provide more generous medical leave benefits than those required under federal FMLA. Employers that are subject to both federal and state laws must comply with the federal or state provision that provides the greater benefit to their employees.