Short answer: It can be. An absence due to disability, a temporary layoff or other unpaid absence (other than FMLA leave) counts as a reduction of hours, and it is a qualifying event if it causes a loss of coverage.
The COBRA regulation says a reduction of hours happens whenever the hours an employee is required to work or actually works decrease without an immediate termination. Its examples: an absence due to disability, a temporary layoff, or any other reason other than FMLA leave.
That reduction is a qualifying event only if it causes a loss of coverage. ‘Loss of coverage’ includes having to pay more for the same coverage because of the event. So:
- If the employer keeps the employee on the plan at the same cost during leave, there is no qualifying event yet.
- If coverage ends, or the employee’s cost goes up, because of the leave, COBRA notices are due (for employers with 20 or more employees).
- A plan that measures eligibility by hours worked in a period triggers the event when the employee falls short of the minimum.
For insured plans in Texas, state continuation may apply instead of or after COBRA (see the related card).