Interaction of COBRA and Medicare: An Information Letter

From ChamberChoice

Information letters are furnished by the Internal Revenue Service’s (IRS) National Office in response to requests for general information by taxpayers, by congresspersons on behalf of constituents, or by congress-persons on their own behalf. The release of information letters has increased and is intended to increase public confidence that the tax system operates fairly and in an even-handed manner with respect to all taxpayers.

A recently released information letter addresses the interaction of COBRA and Medicare. Specifically, the information letter addressed the circumstances under which a covered spouse is entitled to extended COBRA continuation due to the covered employee’s Medicare entitlement prior to termination of employment. The letter provides that a covered employee becomes “entitled to Medicare benefits upon the effective date of enrollment in either part A or B, whichever occurs earlier.”

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA) a qualified beneficiary who loses group health plan coverage due to a qualifying event can be eligible to continue that coverage for a specific period of time.

A qualified beneficiary is an employee, the employee’s spouse and/or dependent. There are six events that if their occurrence causes a loss of coverage will trigger COBRA continuation. They are: termination of employment, a reduction in hours, death, divorce, loss of dependent status, and entitlement to Medicare. The general rule is that continuation coverage, which is paid for by the qualified beneficiary, is available for a period of 18 months. However, there are limited situations where coverage may be extended for up to 29 or 36 months.

Medicare and COBRA
Even though the rules provide that “entitlement to Medicare” is a reason for continuation coverage, this language often causes confusion. As a reminder, the Medicare entitlement must cause a loss of coverage. An employer that is subject to COBRA continuation, i.e. one that has 20 or more employees in the current or preceding calendar year, is also subject to another federal law governing a health care plan, and that is the Medicare Secondary Payer rules (MSP). The MSP rules provide that an employee (or spouse) that becomes entitled to Medicare cannot be terminated from the plan due to that entitlement. Therefore, just becoming Medicare eligible, such as by turning 65 years old, is not a reason for terminating an employee’s or spouse’s health care coverage.

However, Medicare entitlement will become an issue if there is a loss of coverage for an employee due to the qualifying event of a reduction in hours or termination of employment. The issue will be whether the employee becomes Medicare entitled before the qualifying event or after the qualifying event.

The information letter explains that the covered spouse of an employee can receive COBRA continuation coverage for 36 months if that employee became entitled to Medicare benefits before termination of employment or a reduction in hours. The 36-month period begins to run after the date the covered employee became entitled to Medicare coverage. If the employee becomes entitled to Medicare after the termination of employment or reduction in hours, then the spouse will be limited to a maximum COBRA continuation period of 18 months.

As a reminder, an employee who experiences a loss of coverage due to a qualifying event is always limited to a maximum COBRA continuation period of 18 months.

The information letter is not breaking new ground but serves as a reminder of one of the ways the maximum period of COBRA continuation coverage can be affected by a covered employee’s Medicare entitlement. As noted, information letters are often released relating to requests on general information. As always, an employer should consult with its counsel and trusted advisors to ensure that it is complying with the various laws when providing employee benefits.

New Legislation Makes $30 Million Available in Grants for Businesses in Solar Energy Field

From Chambers for Innovation and Clean Energy

In an effort to help develop and maintain solar jobs and manufacturing in Pennsylvania, new bipartisan legislation was recently passed and signed into law to do just that. Act 40 is designed to keep solar energy jobs within the Keystone State instead of sourcing them to neighboring states, as has been practice in recent years.

Additionally, $30 million in grants and loans is now available through the Solar Energy Program (SEP) to businesses that manufacture solar equipment, or generate or distribute solar power. The goal is to support Pennsylvania’s efforts to strengthen its position in the clean energy space.

“The Solar Energy Program is vital in our efforts to make Pennsylvania a leader in clean energy,” Governor Tom Wolf said. “Developing new renewable energy sources including solar is critical to ensuring Pennsylvania has a balanced and diverse energy mix that maintains our position as a major energy producing state.”

Many local Pennsylvania chamber member businesses can benefit from the SEP as it provides financial assistance in the form of grant and loan funds to promote the use of solar energy in Pennsylvania.

If your organization is interested in applying for a SEP loan or grant, please visit the PA Dept. of Community and Economic Development page.

PA Department of Labor Offers Free Workplace Safety Webinars During January

The Pennsylvania Department of Labor & Industry’s Bureau of Workers’ Compensation Health & Safety Division will offer a series of free webinars on workplace safety throughout the month of January.  Titled PATHS (PA Training for Health and Safety), these webinars will cover subjects such as safe driving in inclement weather, dealing with angry people, snowblower safety, safety incentive programs, mold awareness, ADA compliance, social media safety and much more. Each webinar lasts approximately one hour depending on course material and viewer participation. 

For more information, to register, and for a complete listing of each webinar, visit the PATHS training calendar

Early-Stage, Technology-Oriented Businesses and Entrepreneurs Benefit from Tax Credits Through Keystone Innovation Zone Program

Keystone Innovation Zone (KIZ) tax credits for 273 early-stage companies totaling $15 million were announced by Governor Tom Wolf on Dec. 28, 2017. Included are 11 companies located within the Greater Susquehanna Keystone Innovation Zone, which includes portions of Bloomsburg, Danville, Lewisburg, Sunbury, and Selinsgrove.

The Keystone Innovation Zone Program is designed to support and encourage entrepreneurship in and around Pennsylvania’s colleges and universities by providing young Pennsylvania companies with vital working capital to meet critical needs, including covering capital expenditures, workforce expansion, operational expenses, and making companies more attractive to venture investment.

Run out of the PA Department of Community & Economic Development, the program provides tax credits for companies that have been in operation for less than eight years, whose gross revenues have increased over the previous year, are located in a Keystone Innovation Zone, and are operating within a targeted industry sector such as information technology or advanced manufacturing/diversified materials.

“By providing these tax credits, we’re helping to reduce the burden placed on companies as they go through the early stages of growth, thereby helping new ideas take root while pushing both our economy and the thriving tech sector forward,” said Governor Wolf.

For more information about the KIZ program, contact the Rural Business Innovation office in Bloomsburg at 570-245-0096.

Geisinger Community Health Needs Assessment Community Partner Forums to be Held in January

In conjunction with the 2019 fiscal year Community Health Needs Assessment, Geisinger and its partners, Allied Services and Evangelical Community Hospital, invite you to join with other regional community partners for conversation about our research findings from the CHNA, the impact and challenges of health needs in our community and how we can increase collaboration to address community health needs.

Partner Forums will be held on six dates across the region. Please register for the session nearest to your community using the links below.

  • Register: Tues., Jan. 9, 8:30-11am in Camp Hill (Cumberland County)
  • Register: Wed., Jan. 10, 8:30-11am in Kulpmont (Northumberland County)
  • Register: Fri., Jan. 12, 8:30-11am in Lewistown (Mifflin County)
  • Register: Tues., Jan. 16, 8:30-11am in Lewisburg (Union County)
  • Register: Thurs., Jan. 25, 2-4:30pm in Dickson City (Lackawanna County)
  • Register: Wed., Jan. 31, 2-4:30pm in Wilkes-Barre (Luzerne County)


  • Welcome and refreshments
  • Presentation of research findings from the FY2019 CHNA, in progress
  • Large and small group facilitated dialogue to discuss asset mapping, high need populations, community health priorities and collaboration
  • Closing discussion: Making collective impact

Your participation and input will help guide regional community health improvement planning and identify opportunities for local collaboration.

We encourage you to share this invitation with your colleagues and others who may be interested in attending. There is no fee to attend, but registration is required.

We look forward to continued collaboration with our community partners in this essential work! For more information about the CHNA, please visit or contact Allison Clark, Geisinger Community Benefit Coordinator, at [email protected].