04.07.09
COBRA Involuntary Termination Defined
**An employee’s layoff, furlough or other suspensions of employment resulting in a loss of health coverage
**An employee’s termination resulting from his/her absence from work due to illness or disability
**An employee’s reduction of hours followed by his/her voluntary termination
**An employee’s voluntary termination, if he/she had reasonable knowledge he/she would be terminated
COBRA Involuntary Termination Defined
The IRS has released its definition of Involuntary Termination.
Events that would be considered an involuntary termination: Any event will qualify as an involuntary termination if it causes an individual to lose his/her job as a result of "an independent exercise of the unilateral authority of the employer." Such termination must not be the result of an employee's implicit or explicit request. The determination of whether a termination is involuntary is based on all facts and circumstances. The following events will be considered to be an involuntary termination:
** An employer's failure to renew an employee's contract for service at the end of the contract term
**An employee's termination for good reason or cause
Events that would be considered an involuntary termination: Any event will qualify as an involuntary termination if it causes an individual to lose his/her job as a result of "an independent exercise of the unilateral authority of the employer." Such termination must not be the result of an employee's implicit or explicit request. The determination of whether a termination is involuntary is based on all facts and circumstances. The following events will be considered to be an involuntary termination:
** An employer's failure to renew an employee's contract for service at the end of the contract term
**An employee's termination for good reason or cause
**An employee’s layoff, furlough or other suspensions of employment resulting in a loss of health coverage
**An employee’s termination resulting from his/her absence from work due to illness or disability
**An employee’s reduction of hours followed by his/her voluntary termination
**An employee’s retirement if he/she left with the understanding he/she would be terminated
**An employee’s voluntary termination, if he/she had reasonable knowledge he/she would be terminated
**A lockout initiated by the employer
**An employee’s termination in return for a severance package where the employer indicates after the offer period a number of employees will be terminated
**An employee’s resignation as a result of a material change in the geographic location of employment for him/her.
Events that will not be considered an involuntary termination:
**Any event that cause a loss in coverage and eligibility for COBRA but does not result in an employee’s termination of employment. These events include a divorce or a dependent child ceasing to be a dependent child or the death of an employee or absence from work due to illness or disability.
**Work stoppage resulting from a strike initiated by employees or their representatives
**An employee’s reduction of hours without a voluntary termination of employment.
