Denying and Terminating COBRA Coverage

Gross misconduct provides a basis for denying COBRA coverage to the employee and to the employee’s dependents. The only California case on this subject applied the same standard used to deny unemployment benefits under California law.¹ See Unemployment Insurance for more information on this standard.

Mere inefficiency, inability, ordinary negligence or bad judgment does not equal gross misconduct for COBRA purposes. You could face substantial consequences if disqualifying an employee due to gross misconduct.

Alert content: Be extremely careful in using the “gross misconduct” designation. You may want to avoid