We have a union contract that allows certain non-benefits eligible employees to buy-in to our group health plan at full cost. One of our "buy-ins" has sent us correspondence that he is now "covered by Medicare" and will discontinue his coverage. I do not know if "covered by Medicare" means both parts A and B.

The question is: are we responsible for sending a COBRA letter due to his Medicare entitlement? My initial thought is no, since he could have continued the coverage (with his Medicare becoming secondary) as long as he remained an eligible employee. If he then became an ineligible employee at that time he could be offered COBRA due to termination or reduction in hours, correct?

Thank you for feedback.

COBRA is not triggered. Voluntarily dropping coverage is not a COBRA event under any circumstances. For an employee to be eligible for COBRA, they must experience a COBRA event that results in loss of coverage. The only qualifying events for an employee are termination of employment and reduction in work hours. Employees are not eligible for COBRA under any other situations (unless they are retirees).

And the dependents will not be eligible for COBRA either becuase their coverage would not have terminated because of the Medicare entitlement of the employee. See recent IRS Revenue Ruling 2004-22.