An employee on medical leave of absence is eligible for subsidized health coverage as long as the premium is paid. If deliquent in their payments, they are sent several notifications warning of potential cancellation. We recently cancelled coverage for someone who went out on medical leave in 2000 after they fell behind over 2 months. This person contacted the TPA for our self-insured plan and was told she was eligible for COBRA. We disagree as we do not feel that this is a qualifying event. Are we wrong?

We regard failure to pay while on leave a voluntary cancellation that is not subject to COBRA.

Regs concerning FMLA leave state that if coverage is canceled for lack of payment while on leave, it is not an event to offer COBRA at the time coverage is canceled. The event to offer COBRA is when they do not return from FMLA leave. In your situation, I would say she is out of the protected FMLA period and COBRA does not have to be offered.

They've been out on medical leave for 8 years and you didn't put them on COBRA yet?

Any one on medical leave is considered in active status and eligible for the same subsidy for medical/dental and vision benefits as an active employee.