Q&A: How to Maximize COBRA Coverage for Your Spouse

Question:

We have a 64-year-old employee who will turn 65 in April 2025. His wife is only 61 years old. He would like to retire but wants to do whatever allows his wife to stay on COBRA the longest. Is there a scenario in which she could qualify for more than the regular 18-month COBRA period?

Answer:

It’s great that your employee is thinking and planning this far ahead. He’s right that how long his wife will be allowed to stay on COBRA depends on the timing of his retirement compared to when he enrolls in Medicare.

It looks like his best option is to enroll in Medicare while he is still working, then retire and elect COBRA for his wife and possibly even for himself. If he does this:

• His wife’s maximum COBRA coverage period will be 36 months after the employee enrolled in Medicare. He just needs to make sure he retires within 18 months after Medicare takes effect.
• In addition, the employee could elect COBRA for himself for up to 18 months after retirement, in which case he would have dual coverage (COBRA and Medicare).

Depending on the timing of when the employee enrolls in Medicare and when he retires, he might be able to plan it so that his wife can keep her COBRA until she turns 65 and goes on Medicare herself.

Note that if the employee were to retire first, elect COBRA for himself and his wife, and then enroll in Medicare, his COBRA coverage would be terminated and hers would be limited to 18 months. An extension of COBRA may also be available if the wife is or becomes disabled; however, that is a very complicated rule and beyond the scope of this newsletter.

One final clarification: Most Medicare rules and publications use the term “entitled to” Medicare, which basically means the same thing as enrolled.