Employee terminates while eligible spouse is confined in hospital. Can plan terminate spouse's coverage (subject to any COBRA rights) without violating HIPAA's rules against discrimination based on health status?

My understanding is that HIPAA regulations against discrimination based on health status apply to enrollment in a health plan, not when the employee terminates employment and ceases to be an eligible plan participant. Of course, the employee and COVERED (not eligible) spouse would have the right to receive a certificate of prior creditable coverage to reduce pre-existing condition exclusion periods in future coverage.

It would be wise to examine the plan or talk to the insurance carrier or plan administrator to find out if coverage terminates on the employee's termination date or at the end of the month in which termination occurs. And, as you stated, if the employer is subject to COBRA, continuation of coverage through COBRA for this employee and spouse would be the safety net.

Is pregnancy excluded from HIPAA? That is can you have a pre-existing condition statement that goes 12 months. This would stop people jumping due to pregnancy.

No -- HIPAA specifically provides that a group health plan or insurance issuer offering group health coverage may NOT apply a preexisting condition exclusion to pregnancy (see ERISA 701(d)(3)).