367 / Who is a covered employee for purposes of the COBRA continuation coverage requirements? Who is a similarly situated non-COBRA beneficiary?
In addition, the following persons are employees if their relationship to the employer maintaining the plan makes them eligible to be covered under the plan: self-employed individuals, independent contractors and their agents and independent contractors, and corporate directors.2
A person eligible for coverage but not actually covered is not a covered employee.
Final COBRA regulations introduce the term similarly situated non-COBRA beneficiaries, defined as a group of covered employees, their spouses, or their dependent children receiving coverage under an employer’s or employee organization’s group health plan for a reason other than the rights provided under the COBRA requirements and who most similarly are situated to the qualified beneficiary just before the qualifying event, based on all the facts and circumstances.3 COBRA beneficiaries are accorded the same rights and coverage as similarly situated non-COBRA beneficiaries.
1. IRC § 4980B(f)(7); Treas. Reg. § 54.4980B-3, A-2.